Many U.S. businesses have changed their management philosophies to become more c

Question

Many U.S. businesses have changed their management philosophies to become more competitive. These changes include:

Marketing strategies aimed at global markets.
Emphasis on customer satisfaction, including focus on product quality.
Large investments in new production technologies.
Creation of management teams with representatives from many functional areas.
Development of real-time business information systems.


How can managerial accounting support these changes so that businesses can compete successfully?

Explanation / Answer

It is important to keep the management accounting structure flexible. Management accounting is for the corporate to use, rather than for reporting to the government. Hence managers may choose their own format and frequency of reports. At times it is common to find a couple of managers at the same level seeking different kinds of reports. Certain information can have impact on the bottomline and hence needs to be tracked by the organization, though not reported to the regulators- eg. productivity, costing, etc.

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