Strategic Management Accounting: Adapting to Business Changes

This essay evaluates the impact of a changing business environment on management accounting practices. It highlights the shift from traditional accounting methods to more sophisticated approaches necessitated by competitive pressures and evolving manufacturing processes. The essay emphasizes the importance of environmental assessment, including PESTLE analysis (Political, Economic, Social, Technological, Environmental, and Legal factors), to identify potential risks and opportunities. It also discusses the significance of internal assessment using the VRIO framework (Value, Rarity, Imitability, Organization) to determine a company's strengths and weaknesses. The analysis covers various aspects such as political influences, economic factors like job growth and interest rates, technological advancements, societal elements, environmental concerns, and legal aspects. Ultimately, the essay underscores the need for businesses to adapt their management accounting strategies to effectively navigate the complexities of the modern business landscape, seize opportunities, and maintain a competitive edge by leveraging core competencies.

Strategic management
accounting

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Evaluate how a changing business environment impacts on management accounting...............1
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Managerial accountancy procedures occupy a prominent position in this society, exchanging
contemporary accountancy methods that are clearly presented by a variety of contingency
variables, both internally and externally (Altukhov, Predeus and Predeus, 2019). Organizations
had shifted business approach away from conventional accountancy techniques and toward the
application of sophisticated managerial accountancy in current history. Several firms encounter
numerous problems in today's competitive commercial environment in order to successfully
manage and fully participate. Some experts argue that conventional managerial accountancy is
no more appropriate for advanced manufacturing contexts, because the manufacturing processes
have evolved along with the firm's efficiency and detrimental output. Since conventional
administrations would not offer this data, those developments necessitate accurate and reliable
documentation to help executive for monitoring and scheduling functions. Monitoring the
movements of rivals is one place where firms may adjust appropriately.
MAIN BODY
Evaluate how a changing business environment impacts on management accounting
Environment assessment, also known as exterior evaluation, is a firm's goal to examine the
new paradigm where it operates, to be aware of advance indications, and to spot possible dangers
and possibilities. All enterprises and organizations exist in a dynamic environment and are
susceptible to its factors that are tremendous naturally occurring phenomena that necessitate
understanding. The dynamics of an organization's exterior economic atmosphere have an impact
on its activity. On the foundation of all of this, the organisation develops plans to compensate for
these kinds of elements, allowing businesses to seize chances and challenges and pave its road to
victory by matching core competencies (Bourmistrov, Grossi and Haldma, 2019).
PESTLE assessment is a competitive analytical method that is utilised as one of the most
effective scientific techniques for analysing the effects of a firm’s external concerns. It's a more
in-depth variant of the Pestle framework.
 Political factors- They would be the administration's impacts on firms' operations. This
included firm policy, firm security and volatility, corporate fraud, taxation regulations,
underage worker protections, conservation legislation, and protectionist regulations. Such
elements can often have a negative impact on a corporation. Furthermore, the

administration has a significant impact on the nation's schooling institutions. When
determining whether or not to engage a range of customers, all variables should be
considered.
 Economic Factors: In this epidemic condition, job expansion, bond yields, commodity
prices, and, most importantly, jobs rates have all been introduced. The business could
face in the near or longer run as a result of all this. This could lead to the firm's demise.
Factors influence an user's disposable income from a business and might potentially shift
requirement or supplies in the market. It may result in a significant shift in the firm's
merchandise prices. However, it might have a good effect on businesses, as the necessity
for and diversity of goods is rapidly expanding (Ejiogu and Ejiogu, 2018).
 Factors of Technology: Technique has been identified as the most significant changes in
the corporate industry. Innovation has benefitted a core operation by boosting provider
offerings revenues, as well as increasing workers' understanding of contemporary
technologies, which is the most important. This may have an impact on the launching of a
particular item.
 Societal Elements: Such variables have an influence on the firm since they involve
generational patterns such as demographic breakdown, monetary dispersal, living
attitudes, cultural problems, and security focus, among others. Businesses could more
frequently stimulate issues such as demographic breakdown, wealth dissemination, and
other issues that are more significant to the next population.
 Environmental Component: This aspect has suddenly gained prominence. It is
becoming increasingly important for businesses owing to a shortage of natural resources,
as well as increased emissions, which is harming mechanical properties of the product
and government-imposed carbon emissions goals. This encompasses natural and
atmospheric factors such as climate, carbon offsetting, and several others. It has become
more crucial than ever for businesses to raise consciousness about the effects of
environmental disruption. This has an impact on the sustainability of basic materials
(Giacomini, Sicilia and Steccolini, 2016).
 Legal Aspects: This component has merged with the geopolitical elements in various
ways. This encompasses legislation like racism, financial regulation, work, patents and

copyrights, workplace security rules, and so forth. Since every nation does have its own
set of laws and restrictions, commerce is extremely vital internationally.
Interior assessment aids a business in studying its inner surroundings in order to determine its
assets, competences, and strategic edge. The firm's advantages and disadvantages could be
identified through intrinsic assessment. Executives can use this tool to help them strategize their
choices for controlling and monitoring that will be performed out in the company and its
administrative processes. With this type of study, businesses could have a comprehensive
understanding of their capabilities and places where they fall short (Holzer and Schoenfeld,
2019).
VRIO assessment is an important concept which aids in the study of a company's inner
atmosphere, which includes elements like corporate ethos and hierarchy, workers, company
standards and policies, and so forth. The following are some of the most important company
tools for each organisation:
Useful assets are those which allow a company to effectively adopt and develop effective
plans, as well as assist in the exploration of possibilities and the mitigation of hazards. The assets
listed below have a massive effect on the relevant company and are beneficial to companies:
 Branding image as a result of a firm's worldwide integration, its trademark recognition is
reflected worldwide, making it a significant commodity for the organisation.
 Item Quality as the excellence of a firm's items is yet another important and valuable
asset.
 Transmission Network as the corporation possesses a worldwide supply chain which
assists to meeting consumer requirements and is viewed as a significant corporate asset.
 Monetary Assets as according to a VRIO study, money and assets are valued in regards
of each company(Isaac Roque and Cañizares Roig, 2019).