Evaluation of Management Accounting Systems in Modern Organizations

This report evaluates the management accounting systems used by contemporary organizations, focusing on their application in the hospitality, services, and IT industries. It analyzes the Balanced Scorecard, Value Chain Analysis, and Activity-Based Costing methods, highlighting their relevance in decision-making and achieving business goals. The report contrasts and compares these systems, emphasizing their importance in today's uncertain and competitive business environment. It also examines the impact of globalization and technological advancements on management accounting practices, with a specific focus on how organizations can adapt and implement new strategies to gain a competitive edge. The analysis includes two journal articles, discussing the practical use of management accounting systems by contemporary companies. The report concludes by emphasizing the need for modern accounting systems to stay competitive in the global market. The report is an individual assignment submitted by a student for the HI5017 Managerial Accounting course at Holmes Institute.

Running head: MANAGEMENT
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Name of the Student
Name of the University

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Abstract
In this report, we have described the management accounting system of the various
organizations along with the different practice system within the organization. Management
accounting system of an organization plays an important role in the decision-making process
of the organization. This report will depict regarding the implication and practice of the
management accounting system in the organization and how it helps the organizations to
improve their accounting system in this competitive world.

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Table of Contents
Introduction................................................................................................................................4
Examples of the Management accounting system.....................................................................4
Balanced scorecard.................................................................................................................4
Value Chain Analysis.............................................................................................................4
Activity Based Costing..........................................................................................................5
MAS relevant to the contemporary organizations.....................................................................5
Contrast and Comparison...........................................................................................................6
Importance of MAS in Today’s Uncertain and Competitive Business Environment................7
Specific Outcomes.....................................................................................................................8
Conclusion................................................................................................................................10
Reference..................................................................................................................................11

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Introduction
In this project, we are going to evaluate the management accounting system of two
different systems within the hospitality, services and IT industries. In order to analyse the
condition, two different studies are implied to analyse the impact of this accounting system
on these industries.
Examples of the Management accounting system
In the IT-based organization, there are various types and form of management accounting
system can be applied. There are various techniques and approaches described in the journal
articles. One of the techniques which have been mentioned is the Balanced score method,
Activity-based costing method (Akkermans and Van Oorschot 2018).
Balanced scorecard
Balanced score method is a method through which the organizations can implement their
strategies and plans for the betterment of the organization. The demand and operational
activities of the stakeholder as managed and reviewed by using the scorecard method for
increasing the productivity of the business. It helps the organization to gather the internal
information of the business. After analysing their methods, it will allow the organization to
implement the strategies and plans to increase the productivity of the business. balanced score
method is introduced by David Norton and Robert Kaplan in the nineteen centuries. This
method helps the organization to frame strategies and implement them in the best possible
way. this method is not only beneficial for the organization but also the stakeholders of the
organization by balancing the scorecard with other stakeholders (Chand and Ambardar 2013).
Value Chain Analysis
This method id the combination of different activities and services, which allows the
product introduced by the organization to get the physical existence in the market. With the
help of this method, it allows the product of the organization to get a physical existence in the
market. To introduce any product in the market, first the organization come up with various
ideas and plans, so with the help of Value chain Analysis method, it allows the organization
to convert the conceptual form of the product to a physically existing product (Chenhall and
Moers 2015). Value chain analysis helps the organization to make proper decisions. It allows
the organization to frame the strategies and plans for the organization for the betterment of
the organization. this method is also helpful in identifying determining the interrelationship
of the different departments of the organization for improving the performance of the
organization. this method will also help to increase the value of the product in the market.

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This method is very advantageous for the organizations who deal with the international level
such as multinational companies who has a huge grip in the market. This method act as one
of the important told for these organizations (Cooper 2017). The main purpose of Value chain
analysis is to determine the organization's operations which include the whole procedure of
bringing the conceptual thought of the product to a tangible product which has the physical
existence in the market. It is very important for the organization since it allows the
organizations to determine the value of the product and services in the market in the different
sectors which includes manufacturing, processing and supply of the product to the customers
(Watts et al., 2014).
Activity Based Costing
Activity-Based Costing is a method is recently developed in the marketing industry.
Activity-Based Costing is developed to meet the requirement of the modern organizations
since the industries are changing thus it requires not method and techniques for the operating
the organization. This method allows organizations to have better and accurate results for
framing the strategies and plans for increasing the organization's productivity. Under this
method of costing is dependent upon the operational cost of the organizations. The traditional
methods were most costly in comparison due to the use of the machine hours whereas under
Activity Based Costing method the cost is allocated according to the operating cost of the
firms. The fixed costs were allocated to the product in case of disbursement. It allows the
organization to use the cost for the operation of properties (Cooper 2017).
MAS relevant to the contemporary organizations
The management accounting system is the amalgamation of various designs which
includes the various accounting methods and techniques in the organization. Management
accounting systems helps the organizations to gather the various information of the
organization relating to their operations and plans which will allow them to frame new and
plans and strategies which will increase the value of the product along with the firm
(Valmohammadi and Ahmadi 2015). To implement the Management accounting technique, it
is important to gather the required information and data for decision-making and strategizing.
It allows the organization to maintain the proper balance between the workers of the firm and
supporting them to achieve the organizational goal with the help of the implication of various
methods and techniques within the organization. its major role is tom from the rules for the
employees in order to motivate the employees to work more efficiently and effectively
(Curtis et al., 2017).

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In today's modern marketing environment, globalization has changed the industrial sector. To
match the rapid growth in the marketing sectors the organizations need to utilize the new
strategies and methods for the betterment of the organization. however, there are still many
organizations who use traditional methods for operating this business, but they have to
change their accounting methods and try to adopt the new methods and techniques if they
want the competitive advantage over other organizations (Fiadjoe et al., 2016).
Contrast and Comparison
The article "Management Accounting Practices in Hospitality and Service
Enterprises: A Comparative Research", Journal of Commerce and Accounting Research,
vol. 2, no. 3, pp. 1-9.” Talks about the performance and approaches of modern accounting
that are applied and put into practice the hospitality sectors and service in Accounting. Two
different articles are compared, it talks about the new technologies that are growing and
expanding rapidly that have completely changed the operations of the modern business. In
this project, it talks about the new modern accounting systems that work efficiently with high
technology in the organization that consents the organization to perform at the international
level by flowing different strategic decisions (Goretzki and Strauss 2017). Organizations need
to be efficient and should have a modern accounting system to step on the market both
regionally and on a global basis. This article talks about the advanced technologies along
with the Accounting system inside the organization that is affecting the business immensely
helps to compete in the international market. The world is changing so rapidly, various new
technology and modification have bought the organization competes globally.
The article “The Case of a Newly Implemented Modern Management Accounting
System in a Multinational Manufacturing Company”, Australasian Accounting, Business
and Finance Journal, 8 (2), p. 121-137 talks about the effectiveness and efficiency of the
management accounting system in the existing global environments that allow the business to
accomplish the organizational strategies and plan and to make a decision. It represents the
accounting system to facilitate a different process and approach that includes analysis of the
value chain, Activity-based costing, and a well-balanced scorecard that is very important and
essential for the management of accounting. After the analysis, this article talks about the
necessities and needs of different organization to apply new technologies for the modern
accounting system. If it is not implemented properly, it can cause a very big problem in the
accounting system that can damage the whole system of management that can bring a very

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huge loss to the organization. This article talks about the needs of an organization that is
supposed to grow as per the current global environment (Granlund and Lukka 2017).
After reviewing and examining both of the articles, it can be stated that the meaning
and finding of both the articles are similar after studying it as a whole. Both of the articles
hold the same meaning that talks about the rapid growth and advance globalization that is
going on in this modern world. It talks about the competition that is going on in the market
and the performance of the technology so advanced that it has compelled different
organizations to bring a change and modify their systems and operations. That is the reason
why the organization should try to bring a new advance technology accounting system. New
organizations should try to modify and alter their accounting systems and should rather adopt
the new advance accounting system (Ismail et al., 2018). To stay in the competition the
organization needs to adapt invent and apply new strategies so that it does not lack behind. In
this very competitive world if the organization fails to adapt and implement such new
technologies than it can result in a huge loss for the organization in terms of profitability.
They need to adopt different accounting techniques that are based on IT and the various
practices and approaches that are within the organization's accounting system that will help
them to compete in the market (Kamal 2015).
Importance of MAS in Today’s Uncertain and Competitive Business
Environment
There is much organization that is competing in the national as well as the
international levels that set up an example of how the bookkeeping guidelines are supposed to
be maintained, it is supposed to be fascinating and appropriate for the organization to
implement in the international market. The operation of the business organization has
changed rapidly due to innovation and globalization of various new technologies (Kaplan and
Atkinson 2015). The system of management accounting that is applied by various
organizations is interconnected to the technologies that are used by various organizations. As
per the article, it talks about the various new and modern new organizations that influenced
the new accounting system caused by the introduction of new technologies in the market and
globalization. It has examined that the use of the new technologies and accounting system by
maintaining the bookkeeping frameworks, as low maintenance will affect the whole
organization and can lead to a very huge loss. The accounting method as values chain
analysis, activity-based costing and balanced scorecards and various other methods that are
included in the innovative bookkeeping framework; it is also one of the most important

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factors for the organization. In this article, it has been stated that all these frameworks allow
the organizations to connect with leadership that is better and implements the methodology in
the organization (Maas et all., 2015). Due to the rapid growth in the modern world, it is very
necessary to adopt new technologies and structure in the organization because there are so
many competitions growing in the world.
Contemporary organizations are still implementing the bookkeeping within the
organization. For that reason, the organization needs to modify and change the
implementation methods of the bookkeeping system (Nielsen et al., 2015). The organization
and its process have changed a lot because of the innovation and globalization innovation in
the marketing sectors. To compete in the market the new and contemporary organizations
need to apply a different and innovative method. It also provides a benefit for the competition
over rivals in the marketing sector. If the cooperate organization will implement the
bookkeeping system inside their organization properly it will help them to make a decision
that is future along with better productivity within the organization. Various organizations
require implementing an effective and very efficient process using this bookkeeping system
inside the organization to get a competitive advantage over their competitors. The new and
modern organization can innovate and create bookkeeping strategies technology that is based
on IT, it will help the organization to compete with various other organizations in the market
that is full of competition (Novas et al., 2017).
Specific Outcomes
There are four types of specific outcomes after going through the two articles that are
mentioned above:
 The new technologies, techniques, and accounting methods have compelled the
organization to change and modify its operational processes and methods within the
organization. It has brought huge advancement in globalization and competition in the
sector of marketing because of the implementation and innovation of the new
techniques and accounting method. If the cooperate organization will implement the
bookkeeping system inside their organization properly it will help them to make a
decision that is future along with better productivity within the organization (otley
2016). It has forced the organization to implement the new organizational procedure
and process within the organization. To compete in the market the new and
contemporary organizations need to apply a different and innovative method. It also

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provides a benefit for the competition over rivals in the marketing sector. Various
organizations require implementing an effective and very efficient process using this
bookkeeping system inside the organization to get a competitive advantage over their
competitors. These frameworks allow organizations to connect with leadership that is
better and implements the methodology in the organization (Schaltegger and Burritt
2017).
 Exclusive bookkeeping legislation comprises of different fixed framework and
strategy to the organization that is along with the employees to accomplish the
objectives and goals of the business by implementing and adopting the new and
innovative methods to bring out the leadership in the organization. Exclusive
bookkeeping refers to the constitution and performance of different bookkeeping
strategies, techniques, and plans that are inside the organization. The information
concerning the budgetary organizing and the operations of the organization that
allows the organizations to create esteems that will help the organization to reach their
goal (Usenko et al., 2018). These implementations will help the organization to
determine through the implementation of the board bookkeeping system in the
organization. The exact and relevant information is applied for the administrative
bookkeeping system inside the organization, as it will permit the organization to have
a transparent view concerning the activity of the customers, methods for future tasks
and projects.
 Organization is still practicing, performing and innovating various new techniques
and procedures inside the organization for implementing the bookkeeping system.
There is a lot of change due to globalization and innovation in the marketing sector of
the organization. To compete in the market the new and contemporary organizations
need to apply a different and innovative method. It also provides a benefit for the
competition over rivals in the marketing sector (Uyar and Kuzey 2016). With the help
of innovations, their accounting methods have allowed organizations to connect with
leadership that is better and implements the methodology in the organization. In this
modern world, the organization should be very efficient and reflective otherwise it
can affect the organization in a very bad way and leave a negative impact.

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Conclusion
In this report, we have discussed how the Management Accounting system has helped
the organization to improve its performance by implementing new techniques in the
organization. It allows the organizations to improve their marketing strategies and plans
regarding the financing and other organization’s operational activities. This method also
helps the organization in decision-making. In this report, we have also discussed two articles
which helped us to understand the importance and requirement of the Management
accounting system within the organization. we have also explained about the specific
outcomes from those two articles.

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