Diagnostic Control Systems: Implementing Intended Strategies

Topics: Management, Control theory, Control Pages: 2 (618 words) Published: October 5, 2012
Article Summaries:
Diagnostic Control Systems: Implementing Intended Strategies The Rise & Fall of Management Accounting

The Rise & Fall of Management Accounting
The article authors, Johnson and Kaplan looks at how management accounting has evolved over the years and within different industries and how those management accounting reports have failed to help mangers make decisions to reduce costs and improve productivity. The authors state that contemporary trends in competition, technology, and management demand major changes in the way organizations measure and manage costs and how they evaluate short- and long-term performance. The article takes a look at management accounting over varies periods of times and specific industries and discusses how at each period of time the management reports were used. For example, in the 19th century after the Industrial Revolution it was observed that gains could be earned by managing a hierarchical organization. The management system at the time focused on conversion costs and produced only summary results. Fast-forward a several years to roughly around 1925, we see that the management accounting practices that are practiced today had been developed by that time. They had been evolved to serve the control and informational needs of managers of increasingly complex and diverse organizations. As time progressed it is not until after the 1920s that the authors believe that evolution of management accounting did not keep the pace with the improvement in corporations’ product and process technologies. It is stated that the systems today provide misleading targets for managerial review. They fail to provide the relevant set of measures that reflect the technology, products, processes and competitive environments. Which has resulted in what they consider as today’s problems: distorted product costs, delayed and overly aggregated process control information, and short-term performance measures that do not reflect the...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Management Control System Research Paper
  • Implementing Strategies Essay
  • control Essay
  • Essay on implementing a sustainable csr strategy
  • Strategy Essay
  • Essay on Mangement Control Systems
  • Management Control Systems Essay

Become a StudyMode Member

Sign Up - It's Free