Management accounting and the challenge of strategic focus

The paper presents a case study of management accounting in a company that had been a highly diversified conglomerate but was implementing a new strategy of product market focus combined with a more multinational scope. Formerly subject to a simple but rigorous form of financial control, the new org...

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Bibliographic Details
Published in:Management accounting research 2001-12, Vol.12 (4), p.487-506
Main Author: Seal, Willie
Format: Article
Language:English
Subjects:
Accounting
autopoiesis
Business accounting
Case studies
Diversified companies
Enterprises
Epistemology
Management
Management accounting
Organizational change
Strategic planning
system differentiation
System theory
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Summary:The paper presents a case study of management accounting in a company that had been a highly diversified conglomerate but was implementing a new strategy of product market focus combined with a more multinational scope. Formerly subject to a simple but rigorous form of financial control, the new organizational identity of becoming a high-growth, high-technology company posed fresh challenges for its control style and, in particular, for the role of management accounting. The paper draws on self-referential systems theory in order to analyse the paradox that while an organization can become more focused on particular markets and technologies, its management accounting seems to become more diffuse and differentiated. As the company sought to develop a different corporate epistemology through the reproduction of a fresh identity, it established new forms of corporate communication through its quality and performance management systems. Autopoietic theory would acknowledge that management accounting should provide some system guidance but would warn against the possible danger that some forms of performance control may damage company self-production.
ISSN:1044-5005
1096-1224
DOI:10.1006/mare.2001.0167