Management accounting and control Coursework Example | Topics and Well Written Essays - 3750 words

Management accounting and control - Coursework Example This approach was developed by Kaplan and Norton through the development of a set of measures otherwise called by them as â€Å"a balance scorecard.† The approach has the ability of giving the managers of organization a fast and quick view of the organization in terms of measures and management of performance information which includes both process and results measures (Swain, Krumwiede and Eaton 1999). The balanced scorecard is compared to the dials and the indicators in an airplane cockpit due to its ability to give comprehensive information simultaneously about the current and the predicted environment needed by managers for effective and efficient management. Information from this approach is ought to be gathered using the four model approach as follows:- in the customers perspectives, the managers are required to know if they are able to satisfy their customers’ needs hence the need for them to respond to the question as to how the customers see them. Secondly, the model will allow the managers to focus on the critical internal operation which enables the organization satisfy the customer needs, this is known as the internal business perspective. Thirdly, the approach gives the innovation and learning perspective which shows the ability of the organization to innovate, improve and learn. ... Therefore, the balanced scorecard is an organizational framework used in the implementation and management strategy at all the levels of the organization. It does this by linking objectives, initiatives and measures to an organization’s strategy. Hence, the approach can be termed as a strategic management system as opposed to only a measurement system due to its ability to function in both ways (Lipe and Salterio 2000). In addition, the tool enables the organization to be able to clarify their vision and strategy while translating them into action. The full use of the balanced scorecard enables an organization to transform their strategic planning to merely an academic exercise into the nerve center of the organization and its operations through the provision of the overall performance of the organization. This is done through the integration of all the financial measures like ROI, RI and EPS with the other key performance indicators of the organization which are found around the customer’s perspective, internal business processes, organizational growth as well as learning and innovation (Swain, Krumwiede and Eaton 1999). As opposed to Kaplan and Norton, Robert Simons in the explanation of the levers of control and how they can be used in understanding the scope and practice of management control argues that management control systems are formal, information based routines and procedures that are used by managers to maintain and alter patterns in organizational activities (Swain, Krumwiede and Eaton 1999). Hence as compared to the four perspectives in the balanced scorecards, this approach gives us the four levers of control which can be summarized as the control framework used by managers for the