Premium
T he A lignment O f M anagement A ccounting W ith M anufacturing P riorities : A S trategic P erspective
Author(s) -
Samson Daniel A.,
LangfieldSmith Kim,
McBride Patricia
Publication year - 1991
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/j.1835-2561.1991.tb00123.x
Subject(s) - flexibility (engineering) , management accounting , business , function (biology) , cost accounting , quality (philosophy) , management control system , performance measurement , control (management) , product (mathematics) , industrial organization , competitive advantage , strategic management , investment (military) , balanced scorecard , process management , perspective (graphical) , accounting , computer science , marketing , economics , management , biology , philosophy , geometry , epistemology , mathematics , evolutionary biology , politics , political science , law , artificial intelligence
This paper proposes that traditional cost‐based management accounting systems (MAS) are inappropriate for controlling a manufacturing organisation's performance in cases where non‐cost factors are important aspects of the firm's competitive strategy. Manufacturing organisations in Australia are under increasing pressure to increase their competitiveness. This can be achieved by giving the manufacturing function strategic status in the organisation and by designing the MAS to support those strategies directly. The MAS should measure operational performance, control investment and report in terms of the factors which determine the organisation's competitive advantage, whether they be high product quality, manufacturing flexibility, low cost or other influences. The paper provides two applications of the concept of strategy‐driven management systems: capital investment evaluation systems, and operational performance measurement and reporting systems.