Management AccountingQuestion 1According to Emsley (2006 p. 87), management accounting innovation is one of the core themes driving modern organizations since it has a big role to play as far as development in organization is concerned. At all costs innovativeness in management accounting should be encouraged in all of the organizations. Emsley (2005 p. 45-6) argues that innovativeness gives an absolute consideration of the degree at which a management accountant is expected to innovate as opposed to examining just a single innovation. This is particularly good where the theory dwells on the reasons that propel the management accountants to innovate.
Radical innovations have resulted into new practices that have encouraged the doing of things in a different manner. Through it such practices such as the introduction customer profitability analysis have proved to be very essential in the organization profitability (Drury, 2007 p. 7). Howells (2005) says that non-radical innovations resulted into changes on the management accounting techniques that is geared to making or carrying out assignments in better ways than the existing manner. It has prompted the prevailing system of variance analysis to be improved upon.
On his part Drury (2007) notes that to a large extent innovativeness has been used as an explanatory variable. The multitasking of the management accountants that include problem solving, attention directing and scorekeeping have been greatly embraced in the management of the organizations. The management accountants are the one to provide the much needed direction as far as strategic management is concerned. Their roles of being score keepers make them to be in a better position in understanding the various challenges that the organization has gone through (Emsley, 2005 p. 71-2).
The performance of the organization has to be greatly examined in order to discover the underlying strength and weakness of the organization in terms of performance. As the organization put in place the targets that it has to meet, it uses the information provided by the management accountants. According to Howells (2005 p. 45), innovation in management accounting will also make the shortcomings to be quickly identified and immediate solution sought for. Innovation therefore in management accounting will make it possible for the management to know which direction to follow since the management accountant also plays the part of attention direction.
If innovativeness in management accounting is embraced, the feedback system will also be improved making the concerns of the clients to be adequately addressed before they precipitate into a major problem (Emsley, 2006 p. 104). Limberg (2008) reveals that more involvement by the user brought about by innovativeness will help in making the clients to be more loyal and participate in any enhancement programs proposed by the company. Management accounting innovativeness ensures that there is efficiency and accountability as far as management of organization is concerned for the realization of the optimal result.
Hopwood & Chapman (2008) argue that the core themes of modern organizations are better realized where management accounting has been incorporated with in the management of the business. There is assurance that the business units within the organization will work well with each other and there will be grater coordination and cooperation in the departments that has taken up management accounting innovativeness. An idea such as activity based costing (ABC) has been extensively used as one of the practices of innovativeness in the advancement of management of business organizations (Emsley, 2005 p. 56-8).