Global Competition : Challenges for Management Accounting and Control

Innovation, Marketing, Organizational architecture

Management Accounting Research , 1996, 7, 247 – 269

Global competition: challenges for management accounting and control Jeremy F. Dent*

The success of Japanese and south-east Asian firms in world markets over recent decades is well known. Playing by ‘new’ rules, these firms have pursued global strategies which many Western firms have found difficult to confront. Moreover, the rules are continually evolving. This paper analyses some issues arising for management accounting. By way of introduction, the paper firstly reviews the analytics of global competition and discusses emerging issues for the 1990s and beyond. Thereafter, five challenges are identified for management accounting, and in particular for planning and control. The first is to foster multiple perspectives, the second is the coordination of complexity, the third concerns competitor analysis and a fourth concerns resource allocation. The fifth is to overcome centrifugal tendencies, developing a clarity of strategic intent, binding managers together worldwide and rewarding behaviour in the corporate, as opposed to local, interest. ÷ 1996 Academic Press Limited

Key words: global competition; transnational organizations; planning and control in complex organizations.

1. Introduction The considerable success of many Japanese firms in world markets over recent decades, and of those from the newly industralised countries of south-east Asia, is quite apparent. In industries ranging from shipbuilding to electronics, and from automobiles to banking and financial services, they have achieved the most remarkable and rapid international expansion. Often proceeding from a pitifully small resource base just a few years ago, some have emerged to rival or dominate their leading Western counterparts (Figure 1). To some extent this reversal in Western fortunes is ironic, for Western firms have a much longer tradition in managing international businesses1. The overseas * London School of Economics and Political Science....
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