Implementing Management Accounting in Organisations

• When implementing a new management accounting system, the management should consider the system design, implementation procedure, technical problems and the organisational context.
• The economic reality of the firm is captured by analysing organisational processes through site visits, expert interviews or document analysis.
• System design involves managers assigning responsibilities and capturing the economic reality of the firm.
• During the implementation procedure, the time horizon, flexibility, bottom-up vs top-down approach and the number of required teams are considered.
• During the implementation procedure, external involvement, parallel vs stand-alone system, and replacement vs aligning of culture are evaluated.
• A technical problem of implementation is the complexity for users and the cost of implementation, which questions whether SMA tools are required.
• A technical problem of implementation is alignment with strategy - will the SMA focus on reducing costs or adding value
• A technical problem of implementation is selective visibilities - all SMA tools come with a set of assumptions, meaning they can create “invisibles”
• A technical problem of implementation is employee involvement - SMA tools are often implemented by external consultants with a top-down approach, meaning those who will be using the new techniques may be left in the dark
• A technical problem of implementation is internal politics - SMA is frequently considered in times of organisational crisis as a justification to achieve unpopular goals such as reducing the workforce or replacing management
• SMA can bring about organisational resistance:

  • Lack of trust due to internal politics.
  • Improper Communication and feelings of exclusion
  • Lack of training
  • Self-interest to maintain the status quo and advance personal agendas
• Enacting dialogue is an efficient way to respond to organisational resistance.

  • Frequent communication in face-to-face situations
  • Provide multiple mechanisms for managing complaints, e.g. anonymous suggestion box
  • Sanctions (most prominent but least effective way)