Essay Example on In today's the fast changing in economic Situation









In today's the fast changing in economic situation and increase of the competitive that attributed to business innovations advancement in technology and the changing demand of customers may compel the management to develop business techniques and strategies that would guide an organization towards the maximization of profits to survive Friedl Biloslavo 2009 Stefanou Athanasaki 2012 The companies which have been adapting to this situation at too a slow pace found themselves in trouble or simply ceased to exist Afonina 2015 The main focus of managerial accounting has always been to improve the organizational performance and profitability by providing relevant information for planning controlling and decision making Over past three decades management accounting techniques has emerged as one of advanced issues in accounting that concerns the pursuit of shareholder value and aiding management in achieving organizational goals Alsoboa et al 2015 Alleyne and Marshall 2011 stated that in today s business environment manufacturing organizations are constantly encountering challenges namely that of performance improvement The aim of most managerial activities is to improve the performance of the organization The core measures of financial performance include market share return on assets return on investment sales margin and profit level capacity utilization Elbanna and Alhwarai 2012 and while the core measures of non financial performance includes employee attitude and moral personnel performance customer satisfaction product service quality Jusoh 2010 

Management accounting techniques can assist organizations to improve decision making by combination between using both financial and non financial measures this is considered as more effective in improve performance Khan et al 2011 Management accounting techniques act as the key for necessary information that plays a vital role at both operational and organizational level to face competition in the market and achieve goals organizations such as maximize profit going concern growth to and so on Oluwagbemiga et al 2014 So the responsibilities of the management accounting increased to maintain its relevance in organizations to adapt with the changing needs of managers to support them in the tasks of related to planning control performance evaluation and decision making in an organization Ashfaq et al 2014 Pavlatos Paggios 2008 where the traditional accounting techniques such as standard costing variance analysis budgeting and cost volume profit analysis are no longer adequate because of their inability to provide broad scope information to fit to the new dynamic and global environment thus would lead managers to limit their focus on operational issues Kaplan 1984 Sulaiman et al 2004 AlMaryani Sadik 2012 Yap et al 2013 With this transformation in business environment push the organizations toward to improve the management accounting techniques for improve organizational performance through implement many sophisticated techniques such as Balanced Scorecard BSC Activity Based Costing ABC Target Costing TC Total Quality Management TQM supply chain management and Just in Time JIT by focused on the concepts such as efficiency managerial development cost reduction customer focus quality and innovation which leads allows to effectively adapt internal and external environmental factors Watts et al 2014 Ahmad 2017 

Organizational performance is a key aspect in many studies in management literature as it plays a pivotal role in developing implementing and monitoring a strategic plan and setting the future direction Teeratansirikool et al 2013 Organizational growth and progress is achieved only through continuous performance improvement Gavrea et al 2011 Organizational performance is an indicator that measures how well an organization accomplishes its objectives Ho 2008 In today's competitive market organizations must be able to evaluate their objectives through performance measurement approaches such as unit cost profit and quality subjective e g quality satisfaction performances and set up appropriate strategies to reach their goals Many organizations have found that over reliance on financial indicators to measure performance will lead to short term results Johnson and Kaplan 1987 Johnson and Kaplan 1987 argued that economic value includes the value of both tangible assets and intangible assets The BSC was developed by Kaplan and Norton 1992 1996 to include non financial indicators as a part of a firm s reporting system

From the existing performance measurement tools BSC is one of the most popular management tools that is well known and understood as a comprehensive tool to evaluate performance in the management literature Molina et al 2014 Nazari 2014 Performance measures and strategies used in the BSC fall into four major groups of financial customer internal business processes and learning and growth Mehralian et al 2017 The financial indicators include traditional financial measures such as profitability risk and growth Mehralian et al 2017 The customer indicators entail the relationship that an organization has established with its desired customers such as market share and customer satisfaction Mehralian et al 2017 The internal business processes indicators are focused on the methods and practices used inside an organization to create value and how those processes can be improved Mehralian et al 2017 Finally the learning and growth indicators are concerned with priorities to create an environment that is conducive to organizational change innovation and growth Mehralian et al 2017 The BSC framework can enable organizations in monitoring measuring keeping track of their financial and non financial performance in line with their strategy and vision Mehralian et al 2017 Kartalis et al 2013

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