Accounting Question

Using the GCU Library, locate a journal article about how managerial accounting helps businesses make decisions. In the subject line of your post, include the name of the article you read. Then, in your initial post, provide a link to the article and a summary followed by your reaction to the article. The summary should be approximately 250 words and the reaction should be approximately 150 words. The summary should describe the major points of the article, while the reaction should demonstrate your interpretation of the article and how you can apply that knowledge. Do not choose an article that one of your classmates has already posted. To participate in follow-up discussion, choose one of the articles that a classmate has posted and provide your own reaction to it. Note: It may be challenging to find a relevant article if you do not use the library.

Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.

Dawn Hall

Feb 9, 2024, 1:43 PM(edited)

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ROLE OF THE MANAGERIAL ACCOUNTING IN DIFFERENT PHASES OF THE CORPORATE LIFE-CYCLE

Summary

The introduction discusses the significant changes observed in corporate environments over the last two decades, emphasizing factors such as the shift to market economy conditions, evolving business forms, and changes in ownership relations. It highlights the importance of sustainable competitive advantage for long-term success and the need for corporations to adapt to environmental changes promptly. The text mentions the complexity of modeling corporate life cycles due to various factors and properties that are challenging to quantify.

The subsequent section delves into corporate life-cycle models and their relevance in light of economic crises and market challenges. It discusses several models developed over the past half-century, emphasizing their features, characteristics, and applicability in assessing corporate life phases. The text suggests that evaluating multiple models can provide a comprehensive understanding and aid in formulating development strategies for companies.

The treatise identifies a gap in existing life-cycle models concerning the declining phase of corporations. It explores different perspectives on the inevitability of decline and cessation, contrasting with views that leave room for further development phases. It highlights the Adizes model as one of the most recognized, focusing on internal changes and managerial skills throughout different life-cycle phases.

The subsequent section discusses various phases of the corporate life cycle, including infancy, adolescence, adulthood, and aristocracy, detailing their characteristics, challenges, and management implications. It emphasizes the role of managerial accounting in guiding corporations through different life-cycle stages, facilitating effective decision-making, and ensuring financial stability and growth.

Finally, the text concludes by underlining the increasing importance of managerial accounting and controlling in contemporary corporate environments. It stresses the need for accounting systems that prioritize management needs while complying with statutory requirements. The text advocates for a forward-looking approach in managerial accounting, focusing on future-oriented decision-making and providing crucial information support to managers.

Reaction

This article demonstrates the critical role of managerial accounting in informing decision-making processes within businesses. Here’s a few examples of how the article showcases this relationship. First up would be information auuport;Managerial accounting provides essential information and data to support decision-making at various levels of the organization. By analyzing financial data, cost structures, and performance metrics, managers can make informed decisions about resource allocation, pricing strategies, and operational efficiency. Strategic planning the article emphasizes the importance of managerial accounting in strategic planning and organizational development. By utilizing accounting information, managers can assess the current state of the business, identify growth opportunities, and formulate strategic initiatives to capitalize on market trends and competitive advantages. It also provides us with a life cycle analysis. Through the discussion of corporate life-cycle models, the article illustrates how managerial accounting aids in assessing the developmental stages of businesses. Managers can use accounting information to evaluate the financial health of the organization, identify growth barriers, and prioritize strategic actions to navigate through different life-cycle phases effectively. It explains how performance management is effected. Managerial accounting facilitates performance evaluation by providing metrics and benchmarks to measure organizational effectiveness. Managers can compare actual performance against budgeted targets, assess variance analysis, and identify areas for improvement to enhance overall business performance.

Finally it speak to cost and risk management. The article highlights the role of managerial accounting in risk management and decision support. By analyzing financial data and conducting scenario analysis, managers can identify potential risks, evaluate their impact on business operations, and develop strategies to mitigate risks effectively while when considering risk management managerial accounting enables businesses to manage costs efficiently by identifying cost drivers, analyzing cost behavior, and implementing cost control measures. Managers can make decisions about cost reduction initiatives, product pricing, and resource allocation to optimize profitability and competitiveness.

Overall, the article underscores the integral relationship between managerial accounting and decision-making processes in businesses. It demonstrates how accounting information serves as a critical tool for managers to assess performance, formulate strategies, manage risks, and drive organizational success.

References

Fenyves, V., Böcskei, E., & Sütő, D. (2015). Role of the Managerial Accounting in Different Phases of the Corporate Life-Cycle. Annals of the

University of Oradea, Economic Science Series, 24(2), 463–470.