“…management control is a critical function in organisations. Management control problems can lead to large financial losses, reputation damage, and possibly even to organisational failure…to have a high probability of success, organisations must maintain good management control…organisations that have not achieved good control, either because they have not implemented an MCS or because they have not implemented one well, are likely to face severe repercussions…”
Merchant & Van der Stede (2007) Management Control Systems: Performance Measurement, Evaluation and Incentives
As the above statement indicates, achieving good management control – which includes utilising an organisation's management accounting systems – is a vital element in 'successful' entities. We can all, I'm sure, think of recent instances where an organisation's management (accounting) controls have proved to be 'weak'. Barings Bank? Enron? World-Com? Farepak? Northern Rock? XL.Com? Lehman Bros? Woolworths? Setanta? Toyota? British Airways? BP? Goldtrail-Sun4U-Kiss Flights….? Achieving such effective control in today's complex and volatile economic environment, however, means that management accountants are faced by some considerable challenges and, it can also be argued, by some significant opportunities too (see Poundland, for example!).
With this situation in mind, the overall approach taken by this course is to identify some of the most notable performance issues faced by organisations. Then, by drawing on both conceptual and empirical [real-world!] perspectives, the means by which management accounting systems can be best developed to assist and support the management control of these operations is considered.
These are interesting and challenging times for management accountants. Indeed, a number of important new management accounting techniques have been developed in recent years, while the relevance and usefulness of some of the more 'traditional' management accounting tools are being increasingly questioned. It is certainly a field in which both students and practitioners alike are strongly advised to keep themselves up-to-date with current ideas and emerging developments – or risk being left 'dangerously' behind!
Welcome then to the somewhat 'unpredictable' world of Accounting for Accounting and Management Control Systems!
The primary aim of this course is to enable students to understand and critically evaluate the relevance and potential impact of key management accounting control systems within a range of topical organisational contexts. An essential prerequisite for this is an appreciation of the many ambiguities and difficulties associated both with the effective management of organisations as well as with the increasingly chaotic competitive environment within which such entities operate.
In order to achieve this aim then, a range of relevant theoretical and conceptual issues and developments will be identified, and their application to/significance for 'real-world' situations considered.
By the end of this course you should be able to:
The recommended text for this unit is:
This text, along with all other additional reading referenced throughout the learning unit, is available via the Manchester Metropolitan University digital library. Students enrolled on the programme will have access to this digital library and as such, do not need to purchase any text books.