The paper "Issues in Management Accounting" is a good example of a finance and accounting assignment. Emsley (2005) reiterates that innovation is an important topic for research because it enables firms to adapt and survive successfully in the volatile business environment. Management accountants also play a crucial role in the innovation process. They are responsible for ascertaining that the managers have the relevant information that will enable the smooth adjustment to the changing business environment (Emsley, 2005). Urbancova (2013) also states that innovation and knowledge are key prerequisites for gaining competitive advantage in an organization.
Towards enabling the organization to respond successfully to the changing business environment, there are particular characteristics of innovation that should come into play. For instance, innovation ensures that the existing relationship between the new products developed by the firm and the market performance is strong (Urbancova, 2013). Moreover, the development of new products from innovation enables the firm to maintain its market share thereby enhancing productivity. Innovation also stands out as an essential necessity for the growth of an organisation. The growth of the company manifests through non-price factors such as individualisation, quality and design.
Innovation also enables a firm to substitute out-of-the-market products thereby retaining its market share. In essence, innovation creates a pivotal role in shortening the lifecycles of the products for the best interest of the company. The inability of an organisation to develop innovative products places it at risk of lagging behind in the development of new products (Urbancova, 2013). Consequently, the competing firms will outperform it thereby leading to reduced market share and profitability that may result in the ultimate collapse of the company. Therefore, firms that intend to grow and survive in the current turbulent environment should embrace creativity and innovativeness in the development of products.
Innovation enables the organisation to develop products that meet customer needs thereby giving rise to customer satisfaction. The ability of the organisation to satisfy customer needs increases the chances of the customers to become loyal to the organisation. Management accountants that have a business unit orientation can determine whether an innovation is proper or not since they report to the business unit managers or work alongside them (Emsley, 2005). Task 2 Emsley also emphasises on the innovation role of a management accountant for theory development.
In the first section, Emsley explains how innovativeness is a dependent variable. To begin with, the author provides a definition of innovativeness by equating it to the act of an individual within the organisation to develop an idea, object or practise that is new to the department, organisation or individual. Being an employee that is responsible for evaluating the successful performance of innovative strategies, it is the role of the management accountant to devise innovative strategies that will enable the organisation to attain competitive advantage.
Emsley also states that the management accountant should be innovative since innovation manifests anywhere in the product or service development cycle from the inception of the idea through the entire implementation process. The incremental stages associated with the product development cycle are not independent. As a result, the input of the management accountant in the identification of alternative approaches to the innovative strategy is pertinent to the overall success of the underlying innovation.
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