Answer to Question #184257 in Economics for Astha

Question

Discuss the practical aspects of the management accounting function briefly in the context of the changing global management practices perspective. Student can take any example to build around the aspects needs to be discussed

Answer 1

The globalization processes taking place in the world system have a significant impact on the formation of various concepts, including the concepts of accounting. Due to the main objective and subjective factors, namely: liberalization and intensification of competition in the national markets of developed countries, improvement of technologies for financial accounting operations, the general growth of world production, the processes of economic globalization have become possible.

One of the paradoxes of our time is that in the context of globalization, it is more difficult to adapt those enterprises that have been improving their organization, structure, and functioning for a long time. They have everything provided, controlled, ordered, but this is what makes it difficult to adapt to the inconstancy of external factors. In an environment characterized by increasing volatility, business entities must learn to be flexible and manage change to the required degree. Therefore, an important task for them today is, on the one hand, the creation of such an organization, the products and services of which will allow them to respond flexibly to the needs of local customers, and on the other hand, the simultaneous development of a global organizational culture and global scope of activity.

To solve this problem, it is necessary to transform many elements of the enterprise management system. As already stated, the approach to the use of past experience should be changed. The stormy environment forces one to doubt the traditionally understood idea of ​​planning, and not only because it is impossible to project current trends into the future. All that can be planned is that atypical and exceptional events of an ever-increasing scale will take place. Therefore, strategic planning is being supplanted by strategic management.