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Comments on: A Practitioners Viewpoint on the Priorities for Management Accounting Education & Research by David A. J. Axson, Sonax Group Inc. Wim A. Van.

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Presentation on theme: "Comments on: A Practitioners Viewpoint on the Priorities for Management Accounting Education & Research by David A. J. Axson, Sonax Group Inc. Wim A. Van."— Presentation transcript:

1 Comments on: A Practitioners Viewpoint on the Priorities for Management Accounting Education & Research by David A. J. Axson, Sonax Group Inc. Wim A. Van der Stede University of Southern California AAA-MAS 2005 Conference, Scottsdale

2 - 2 - The world is very different … Then Manufacturing centric Local to national markets Demand exceeded supply Few competitors Long product life cycles Constrained capital Weak special interests Now Service centric Global markets Supply often exceeds demand Many competitors/alternatives Short product life cycles Easy access to capital Organized special interests (lawyers, environmentalists) Simplicity Predictability Stability Complexity Volatility Uncertainty

3 - 3 - Fact … most companies are fighting a tough battle Innovators & Leaders Stagnating Declining 15% 25% 60% Growth Time Source: Sonax Group Research

4 - 4 - Fact … after 5 years most stagnate Years in existence Profitability of New Market Entrants Relative to Industry Peers Source: Foster & Kaplan, Creative Destruction, Doubleday

5 - 5 - (e.g., Planning & Budgeting) Predicated on plan in detail and stick to it Multi-year strategic plans Detailed annual budgets Monthly performance reporting vis-à-vis preplanned performance targets And thus, Assuming high degree of predictability Likely mismatched with business cycles Emphasizing incremental improvement Riddled with sandbagging and conservatism Ceased to be an effective control mechanism ? Beyond Budgeting? Ahrens & Chapman (CAR 2004) What does this mean for management accounting?

6 - 6 - Conclusion Current, predominant focus Optimality (stagnation) Old industries Manufacturing function Coercive MCSs De-contextualized Desired, promising focus Change (growth/decline) Service/other industries Other business functions New organizational forms Enabling MCSs Context-based Event-triggered


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