: MANAGEMENT ACCOUNTING TECHNIQUES IN MANUFACTURING INDUSTRIES A BEHAVIORAL PERSPECTIVE A CASE STUDY OF NIGERIA BREWERIES PLC 9TH MILE CORNER- ENUGU STATE
: MANAGEMENT ACCOUNTING TECHNIQUES IN MANUFACTURING INDUSTRIES
A BEHAVIORAL PERSPECTIVE
A CASE STUDY OF NIGERIA BREWERIES PLC 9TH MILE CORNER- ENUGU STATE
LIST OF TABLE
Table ii Additive of organizational goods
Table iii Motivating factors
Table iv Causes of inefficiency
Table v Objectives of management Accounting
Table vi Necessity for cost control
Table vii Rational for cost control
Table viii Meaning of management accounting
Table ix Budget setting
Table x Responsibility and authority over budget action
Table xi Budget preparation procedure
Table xii employee’s reactions to control techniques
Table xiii Budget contributions to organization objective
Table xiv Participant views about standard costing
Table xv Effect of discontinuation of standard costing
Table xvi Communication of budget results
Table xvii Policy on standard setting
Table xviii Nature of cost/revenue curve
Table xix Certainty knowledge about V.C.P variables
Table xx Time value of money consideration of C.V.P
Table xxi Separation of costs into fixed and variable components.
ABSTRACT
Management accounting which is the informational system needs of various levels of management. Management accounting which is the information system of a firm is essentially a behavioural function because mangers must be influenced to take actions that are in the best interest of their organization, and employees must be influenced to make their possible contributions to the organization goals.
Management tend to operate their accounting techniques with the assumptions that the more sophisticated the techniques are the more likelihood of success in controlling and improving performance. These assumptions normally elicit responses form the employees which range from blaming the techniques used as the cause of their problem to extreme case of frustration hatred and hostility to the organization.
Management accounting literature’s on meaning methods and accounting literature’s on meaning methods and accounting techniques were reviewed. Research questions were used in the beginning to get some of the information required. Visit to the company were made. During the visit, interview were held with the accountant, senior staff and other employees like store keepers, planning assistant etc.
The study in chapter one is going to rely on clear statement of the problems motives and significance of the research, chapter two deals with literature review. Management accounting techniques are they are applied to an industry will be extensively examined and definitions of various management control concept will be given.
Chapter three deals with the method adopted in collecting data. Population description, sampling techniques and the statistical techniques use to analyze the results.
The analysis of the data collection is made in chapter four. Here the actual variances are identified.
Chapter five deals in the findings, conclusion and recommendation in respect of the analysis of data.
The research highlighted some behavioural problems associated with management accounting techniques and advantages to be gain when decision making, problem –solving approach is adopted and some measures that can reduce or eliminate the difficulties highlighted above.
CHAPTER ONE: INTRODUCTION 1
1.1 STATEMENT OF PROBLEM 3
REFERENCES 18
CHAPTER TOW : LITERATURE REVIEW 19
2.0 MANAGEMENT ACCOUNTING IN NIGERIA BREWERIES COY PLC 19
PERFORMANCE 27
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 INTRODUCTION 42
ORGANIZATION 42
CHAPTER FOUR
PRESENTATION OF RESULTS AND INTERPRETATIONS
4.1 DATA ANALYSIS AND INTERPRETATION 53
CHAPTER FIVE
5.1 SUMMARY OF FINDINGS 84
PROPOSAL
This project topic “ management Accounting Techniques in manufacturing industries A behavioural perspectives. A case study of Nigeria Breweries PLC, 9th Mile corner, Enugu state.
This also aim a ascertaining the extent that management, accounting which is the informational system needs of various levels of management. Management accounting which is the information system of a firm is essentially a behavioural function because mangers must be Influenced to take actions that are in the best interest of their organization.
The importance of the study is to help the organization make a good decision that we help them for growth and improved the quality and the quantities of their products. The area of study is manufacturing industries, “Nigeria breweries Plc as my case study because is close to me and I can easily get information and data needed for my project.
In this project I we put more emphasis on budgeting, stock valuation. The roles of management accounting to the manufacturing industries and standard which the organizations should operates.
CHAPTER ONE
INTRODUCTION
This chapter deals with the background to the problem which constitute what motivated the researcher undergo the study. It deals with statement of the problem, Research/Objective of the study and the significance of the study. Attempt is also made to discuss the delimitation of the study and highlight the limitation of the study.
1.0 BACKGROUND OF THE STUDY
management accounting is one of the informational system of a firm that permits data to glow from one point in the firm to another, and also the data selected and transmitted to serve as inputs to managers and workers decision process, one of the major function of management accounting is to furnish information which is useful as basis for decision making at all levels of the organization. Such information provides managers with the data required for planning, co-ordinating and controlling activities. It also includes the operation of a system which assists in motivating individuals to make and implement those decisions that will lead to the accomplishment of organization’s goals from the definition given above, it is obvious that management accounting places a heavy emphasis on the influence of behaviour. The department’s participants react differently to the use of management accounting depending on their perception on how the techniques are being operated. Accounting, may see then from the preparation aspects, managers from implementation aspect while workers may view them as devises used by management to manipulate them. When workers obtained unfavourable reports from the management accounting techniques used to evaluate them, there is the tendency for them to shift the blame on the technique used.
Another prominent behavioural problem associated with the management accounting is the way the techniques are being designed and operated. In most cases, management operates management accounting techniques with the assumptions that the more sophisticated the techniques are more like hook of success in controlling and improving performance. Thus, there is a tendency for many department expect desirable results merely from the use of the control technique on the individuals responsible for the activities of the firm . when management accounting are operated, it is capable of generating more effects on employee’s morals, trust and motivation. Beside creating resentments, this way cause workers to believe that success is not important as avoiding a failure. The bedrock of behavioural assumptions under which managers and accountants operate. There is no statement of the behavroural assumptions of management accounting found in the literature. Despite the accounting systems, procedures and attitude are based on implicit assumption about behaviour which are derived from the classical management theory.
1.1 STATEMENT OF PROBLEM
Management accounting techniques are like a two-edged sward which are capable of enhancing the performance of the people operating them and if not properly handled can lead to frustration suspicion and in extreme case hostility to the company, when management accounting is operated with a view similar to that of Nigeria Breweries Management accounting view, it is capable of generating the following effects on the employees;
Similarly management accounting view is capable of generating adverse effect on quality of management decisions which required information on several factors both internal and external to the organization.
The research is out to investigate the attitude of managers and accountants in Nigerian Breweries Plc about the following.
As can be seen from the statement of the problem of the study one of the two conflicting function which the underlying assumptions of management accounting is negative consequences such as frustration, ill feeling hatred and undue suspicion.
Management accounting has been subject to sever criticism for the following reasons. Its application take for granted the individuals differences on the workers their motivation factors, their aspiration levels and the fact that business organization is operating in diverse environment that is changing continuously. It is rigidity enforcing standards setting unrealistic standards, lack of adequate participation by all the members of the organization and being used is excessive control mechanism. The application of management accounting techniques delicate the work environment into management accountants situation which tend to cause nervousness at work. The manger enforce the techniques with view of “final or be fired”, they force the workers to perform through the threat of retirement and bait of monetary incentives. This study is to gain overall insight into the view of the mangers and accountant in Nigeria breweries Plc, Enugu State since these categories of workers are senior members of staff of their view represent the genuine views of the management.
To investigate the views of managers and accountant about management accounting techniques in Nigeria Breweries Plc Enugu State the following hypotheses are stated in null firm
1.4 RESEARCH QUESTIONS
The research is one to investigated the attitude of managers and accountant in Nigerian Breweries Plc about the following:
1.5 SIGNIFICANCE OF THE STUDY
The view of managers and accountant s sent the aggregate views on management accounting in the company studied. This study will expose the type of views they hold about management accounting which is reflection of how they practice their accounting system since the study is not extended to the effect of such views on their performance in their accounting system. However, it is reasonable to inter that if management accounting as practised in the company are pattern to reflect their organization. The company studied will suffer or enjoy the consequences associated with such behavioural view. This study is to expose the type of view managers and accountants are having about the management accounting. It will expose them to possible defects if such view points and introduce them to more realistic view that will benefit of the company.
There is no gain say, that behavioural management accounting techniques have behavioural consequences that are negative and can result in low performance, low motivation high rate of industrial strike, ill –feeling, hatred, frustration and in extreme case hostility which can cause factions in an organization/company the essence of this study is t highlight these behavioural problems and put the management in a good frame of mind to be able to avoid these problems and be able to benefit from the advantages associated with organization theory view points
1.6 SCOPE/LIMITATION OF THE STUDY
It would be pertinent at this point in time to say categorically and emphatically that this study would in the main be in exhaustive realizing the indisputable fact that the topic is wide, the write uphas consequently been narrowed to the most relevant area.
This area being the management accounting techniques as they should apply to brewing industry. This paper is divided into five chapters. The first chapter is an introductory one and chapter two gives overview brref industry of the organization, research, Hypothesis, significance of the study was treated skeletally and operational definition of the term. However, the research in organizing his materials for this work had difficulties in terms of finance and time . several trips were made to the organization in other to obtain information relevant to this work. Even at the organization the staff though co-operated to certain measure had a feeling that the researcher visits robbed them of their valuable hours which they had expected to utilize on their jobs and so disappointed the researcher in some occasions as regards appointment scheduled.
In carrying out this study, the researcher therefore restricted himself to management accounting techniques where in the organization Nigerian Breweries Plc 9th mile corner Enugu, Enugu State. This decision to the still of the management techniques in this organization is informed by the lack of time in carrying our an in –depth study in the entire Breweries industry.
The research is of the assumption that management accounting techniques as being used in Nigerian Breweries PLC 9th mile corner Enugu State of Nigeria is based essentially on traditional management accounting view in contest to a more realistic organization theory.
Identified some set of behavioural assumptions are:-
These assumptions relates closely to the accounting view that is necessary to push workers in order to obtain adequate performance, gain goals and motivation but presupposes that the needs and objectives of the organization. The implications of the above behavioural assumptions which are implicit in the management accounting cannot be ignored. It is clear that behaviourally, management accounting techniques can serve as a decent to low congruence, and that the accounting function under such circumstances can be a source of undesirable behavioural responses as frustration, conflict and rigidity. It is not necessary management accounting as such that is responsible for the kind of organizational problem under consideration here. Rather, the difficulty seems to be more closely related to the manner in which accounting is used. Hence, the mode of implementation and means of interpretation are crucial to the success of the techniques as means to achieve a desirable performance.
The study investigated whether managers and accountants in the company studied are operating their accounting system with the management accounting view highlighted above.
Their views will be analyzed on the following basis:-
And dysfunctional consequences of the use of budgeting, standard costing and cost- volume profit analysis.
Management accounting is defined as accounting designed for or adopted to the information needs of various levels of management.
The chartered institute of management Accountant (CIMA) defines management accounting as an integral part of management accounting as an integral part of management concern with identifying, presenting and interpreting information used for:
Management accounting therefore is primary concerned with data gathering from internal and external sources analysis, processing, interpreting and communication the resulting information for use within the organization so that management can more effectively plan, make decisions and control operations. Management accountant is to use data from financial and cost accounting systems to conduct special investigations to gather required data whereby he used both accounting and appropriate techniques from statistics and operations research, the data collection and record keeping, analysis of data and preparation of reports for management use.
MANAGEMENT OBJECTIVE: In order to run his organization effectively and efficiently, the manger has to make decision and to do this, he has to be guided. This management objective is there any activity for which a separate measurement of management is required. This activity might be a product of a services.
VARIANCE ANALYSIS
The major aim of variance is to show the efficiency of managers and other personnel’s in carrying out their work variance analysis is operated in a dynamic environment, hence attempt to operate static standards of conflict in understanding the meaning of variance analysis.
COST-VOLUME- PROFIT ANALYSIS
Cost – volume profit analysis (C-V-P) is a management accounting tools whose results must be viewed with caution, like all costs can be separate into their fixed and variable components. The behaviour of cost and revenue curve is unear for the relevant range. It is normal to restrict the analysis for a single product, in a single time period, under conditions of certainty of knowledge about the variable involved.
PERFROMANCE EVALUATION
This involves assessing a manger’s performance on his ability to meet budgets. This performance evaluation as observed in manager’s budget record is used in considering a manager for promotion or for a salary increase or for some other form of recognition.
MOTIVATION AND GOAL CONGRUENCE
If the goal congruence is the objective of an organization and that of the individuals participating in its achievement agree, there will be a motivational impact on the participants, to achieve the planned goal congruence.
COMMUNICATION
The full budgetary process involves liaison and discussion between all levels of management is an important formalavenue of communicating between top and lower levels of management regarding the organization’s long and short term objectives and the practical problems of implementing those objectives.
REGULAR REVISIONS OF BUDGETS AND TARGETS
Budgets should be administered in a flexible manager. Rigid adherence to budgets which are clearly appropriated for current condition will cause the whole management system to loose credibility and effectiveness.
MANAGEMENT ACCOUNTING
TECHNIQUE/BEHAVIOURAL PERSEPECTIVE
It is motivated by the fact that management accounting which is the information system of a firm is essentially a behavioural function because managers must be influenced to take at action that are in the best interest of their firm, and employees must be influenced to make their possible contributions to the organizations goals.
Management tend to operate their accounting techniques with the assumptions that the more sophisticated the techniques are the more likehood of success in controlling and improving performance.
These assumptions normally elicit responses from the employees which range from blaming the techniques used as the cause of their problem to extreme case of frustration, hatred and hostility to the organization.
The type of behaviour mangers and accountants will exhibit in the design and operation of their accounting techniques can be traced to the underlying assumptions associated with traditional management accounting organization. The study will expose the type of attitudes management accountant in Nigeria Breweries Plc Enugu are having. It will highlight the inefficiencies of these assumptions with the view to expose practising managers and accountants to a more realistic view that will be of greater benefit to the operation of their organization.
REFERENCES
A.O Mobwubu (principles and practices of cost Accounting) I. Bs Press Nigeria 1995 pg.2
Birnbery J.C. and Raghu Nath, (1974) implications of behavioural science for managerial accounting in behavioural assets of accounting a book of reading? Edition by Schiffi lwain prentice Hall Inc.
Carbone T.C “ Futurology and Management Accounting Cost and Management Journal of the society of management accountant of Canada. Vol. 53, No 6 Nov-December, 1979.
French J.R.P Isreal 3 (1960) “An experiment on participation in a Norwegian factory, Human Relations .
Levine, Marc. M “The behaviroual implication participate budgeting cost and management. Journal of the society of management accountants of Canada Vol. 55 No 2 March – April.
March J.G Simon H.A Organizations New York. John Wiley and Son 4th edition 1968.
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A BEHAVIORAL PERSPECTIVE
A CASE STUDY OF NIGERIA BREWERIES PLC 9TH MILE CORNER- ENUGU STATE
LIST OF TABLE
TABLES
Table i Organizational goods
Table ii Additive of organizational goods
Table iii Motivating factors
Table iv Causes of inefficiency
Table v Objectives of management Accounting
Table vi Necessity for cost control
Table vii Rational for cost control
Table viii Meaning of management accounting
Table ix Budget setting
Table x Responsibility and authority over budget action
Table xi Budget preparation procedure
Table xii employee’s reactions to control techniques
Table xiii Budget contributions to organization objective
Table xiv Participant views about standard costing
Table xv Effect of discontinuation of standard costing
Table xvi Communication of budget results
Table xvii Policy on standard setting
Table xviii Nature of cost/revenue curve
Table xix Certainty knowledge about V.C.P variables
Table xx Time value of money consideration of C.V.P
Table xxi Separation of costs into fixed and variable components.
ABSTRACT
Management accounting which is the informational system needs of various levels of management. Management accounting which is the information system of a firm is essentially a behavioural function because mangers must be influenced to take actions that are in the best interest of their organization, and employees must be influenced to make their possible contributions to the organization goals.
Management tend to operate their accounting techniques with the assumptions that the more sophisticated the techniques are the more likelihood of success in controlling and improving performance. These assumptions normally elicit responses form the employees which range from blaming the techniques used as the cause of their problem to extreme case of frustration hatred and hostility to the organization.
Management accounting literature’s on meaning methods and accounting literature’s on meaning methods and accounting techniques were reviewed. Research questions were used in the beginning to get some of the information required. Visit to the company were made. During the visit, interview were held with the accountant, senior staff and other employees like store keepers, planning assistant etc.
The study in chapter one is going to rely on clear statement of the problems motives and significance of the research, chapter two deals with literature review. Management accounting techniques are they are applied to an industry will be extensively examined and definitions of various management control concept will be given.
Chapter three deals with the method adopted in collecting data. Population description, sampling techniques and the statistical techniques use to analyze the results.
The analysis of the data collection is made in chapter four. Here the actual variances are identified.
Chapter five deals in the findings, conclusion and recommendation in respect of the analysis of data.
The research highlighted some behavioural problems associated with management accounting techniques and advantages to be gain when decision making, problem –solving approach is adopted and some measures that can reduce or eliminate the difficulties highlighted above.
CHAPTER ONE: INTRODUCTION 1
- BACKGROUND OF STUDY 1
1.1 STATEMENT OF PROBLEM 3
- OBJECTIVE OF THE STUDY 5
- RESEARCH HYPOTHESIS 5
- RESEARCH QUESTIONS 6
- SIGNIFICANCE OF THE STUDY 8
- SCOPE/LIMITATION OF THE STUDY 9
- ASSUMPTION OF THE STUDY 11
- OPERATIONAL DEFINITION OF THE TERM 13
REFERENCES 18
CHAPTER TOW : LITERATURE REVIEW 19
2.0 MANAGEMENT ACCOUNTING IN NIGERIA BREWERIES COY PLC 19
- BUDGETING 23
- PARTICIPATIVE BUDGETING 24
- GOAL CONGRUENCE AND BUDGETARY –
PERFORMANCE 27
- BASIC STANDARDS 31
- IDEAL STANDARDS 31
- EXPECTED STANDARDS 33
- VARIANCE ANALYSIS 34
- COST-VOLUME –PROFIT ANALYSIS 36
- TRANSFER PRICING 38
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 INTRODUCTION 42
- METHOD OF DATA COLLECTION AND-
ORGANIZATION 42
- PRIMARY 43
- SECONDARY DATA 43
- TEST OF RESEARCH HYPOTHESIS 44
- DETERMINATION OF SAMPLE SIZE 45
- METHOD OF DATA ANALYSIS 47
- QUESTIONNAIRE 48
- RESEARCH QUESTIONS 51
CHAPTER FOUR
PRESENTATION OF RESULTS AND INTERPRETATIONS
- INTRODUCTION 52
4.1 DATA ANALYSIS AND INTERPRETATION 53
CHAPTER FIVE
- FINDINGS, RECOMMENDATION AND CONCLUSION
5.1 SUMMARY OF FINDINGS 84
- RECOMMENDATION 84
- CONCLUSION 85
- SUGGESTION FOR FURTHER RESEARCH 86
- QUESTIONNAIRE 87
PROPOSAL
This project topic “ management Accounting Techniques in manufacturing industries A behavioural perspectives. A case study of Nigeria Breweries PLC, 9th Mile corner, Enugu state.
This also aim a ascertaining the extent that management, accounting which is the informational system needs of various levels of management. Management accounting which is the information system of a firm is essentially a behavioural function because mangers must be Influenced to take actions that are in the best interest of their organization.
The importance of the study is to help the organization make a good decision that we help them for growth and improved the quality and the quantities of their products. The area of study is manufacturing industries, “Nigeria breweries Plc as my case study because is close to me and I can easily get information and data needed for my project.
In this project I we put more emphasis on budgeting, stock valuation. The roles of management accounting to the manufacturing industries and standard which the organizations should operates.
CHAPTER ONE
INTRODUCTION
This chapter deals with the background to the problem which constitute what motivated the researcher undergo the study. It deals with statement of the problem, Research/Objective of the study and the significance of the study. Attempt is also made to discuss the delimitation of the study and highlight the limitation of the study.
1.0 BACKGROUND OF THE STUDY
management accounting is one of the informational system of a firm that permits data to glow from one point in the firm to another, and also the data selected and transmitted to serve as inputs to managers and workers decision process, one of the major function of management accounting is to furnish information which is useful as basis for decision making at all levels of the organization. Such information provides managers with the data required for planning, co-ordinating and controlling activities. It also includes the operation of a system which assists in motivating individuals to make and implement those decisions that will lead to the accomplishment of organization’s goals from the definition given above, it is obvious that management accounting places a heavy emphasis on the influence of behaviour. The department’s participants react differently to the use of management accounting depending on their perception on how the techniques are being operated. Accounting, may see then from the preparation aspects, managers from implementation aspect while workers may view them as devises used by management to manipulate them. When workers obtained unfavourable reports from the management accounting techniques used to evaluate them, there is the tendency for them to shift the blame on the technique used.
Another prominent behavioural problem associated with the management accounting is the way the techniques are being designed and operated. In most cases, management operates management accounting techniques with the assumptions that the more sophisticated the techniques are more like hook of success in controlling and improving performance. Thus, there is a tendency for many department expect desirable results merely from the use of the control technique on the individuals responsible for the activities of the firm . when management accounting are operated, it is capable of generating more effects on employee’s morals, trust and motivation. Beside creating resentments, this way cause workers to believe that success is not important as avoiding a failure. The bedrock of behavioural assumptions under which managers and accountants operate. There is no statement of the behavroural assumptions of management accounting found in the literature. Despite the accounting systems, procedures and attitude are based on implicit assumption about behaviour which are derived from the classical management theory.
1.1 STATEMENT OF PROBLEM
Management accounting techniques are like a two-edged sward which are capable of enhancing the performance of the people operating them and if not properly handled can lead to frustration suspicion and in extreme case hostility to the company, when management accounting is operated with a view similar to that of Nigeria Breweries Management accounting view, it is capable of generating the following effects on the employees;
- Employees will blame their “misfortune” on the management accounting techniques used to evaluated them, and they may work to under-mind the effective operation of the techniques
- When performance reports hump together controllable and non controllable variance, this normally generate negative responses such as frustration, hostility and distrust.
- Employees are often lowly motivated to contribute their best to the organization activities, and this can lead to low productivity in the beer industry and other departments.
- Performance reports based on such views are essentially misleading because they are not capable of exposing all the factors that cause the obtained results.
Similarly management accounting view is capable of generating adverse effect on quality of management decisions which required information on several factors both internal and external to the organization.
The research is out to investigate the attitude of managers and accountants in Nigerian Breweries Plc about the following.
- What is the mangers and accountants believe about the objectives of an organization
- How do they think the workers should be motivated?
- What is their belief about the role of management accounting?
- Do management accounting techniques encourage people to take actions which they pervious to be in their own best interest rather than that of the organization?
- What are the dysfunctional consequences of the use of management accounting techniques.
- RESEARCH/OBJECTIVE
As can be seen from the statement of the problem of the study one of the two conflicting function which the underlying assumptions of management accounting is negative consequences such as frustration, ill feeling hatred and undue suspicion.
Management accounting has been subject to sever criticism for the following reasons. Its application take for granted the individuals differences on the workers their motivation factors, their aspiration levels and the fact that business organization is operating in diverse environment that is changing continuously. It is rigidity enforcing standards setting unrealistic standards, lack of adequate participation by all the members of the organization and being used is excessive control mechanism. The application of management accounting techniques delicate the work environment into management accountants situation which tend to cause nervousness at work. The manger enforce the techniques with view of “final or be fired”, they force the workers to perform through the threat of retirement and bait of monetary incentives. This study is to gain overall insight into the view of the mangers and accountant in Nigeria breweries Plc, Enugu State since these categories of workers are senior members of staff of their view represent the genuine views of the management.
- RESEARCH HYPOTHESES
To investigate the views of managers and accountant about management accounting techniques in Nigeria Breweries Plc Enugu State the following hypotheses are stated in null firm
- Ho: The way management perceive the organization goals have no influence on how the workers will behave
- Ho; Participation in the setting of standards/budgets have no influence on workers performance
- Ho: Management views about monetary incentive have no influence on performance of works
- Ho. The way workers perceive the operation of management accounting techniques will not effect their feelings towards the techniques
- Ho: Organization’s participant will perform better without management accounting techniques.
1.4 RESEARCH QUESTIONS
The research is one to investigated the attitude of managers and accountant in Nigerian Breweries Plc about the following:
- What is the managers and accountants belief about the objectives of their organization?
- How do they think their works should be motivated?
- What is their belief about the role of management accounting?
- Do management accounting techniques encourage people to take actions which they perceive to be in their own best interest rather than that of the organization?
- What are the dysfunctional consequences of the use of management accounting techniques
- How are the employees of the organization been remunerated? What incentive other than financial benefits are available to the staff?
1.5 SIGNIFICANCE OF THE STUDY
The view of managers and accountant s sent the aggregate views on management accounting in the company studied. This study will expose the type of views they hold about management accounting which is reflection of how they practice their accounting system since the study is not extended to the effect of such views on their performance in their accounting system. However, it is reasonable to inter that if management accounting as practised in the company are pattern to reflect their organization. The company studied will suffer or enjoy the consequences associated with such behavioural view. This study is to expose the type of view managers and accountants are having about the management accounting. It will expose them to possible defects if such view points and introduce them to more realistic view that will benefit of the company.
There is no gain say, that behavioural management accounting techniques have behavioural consequences that are negative and can result in low performance, low motivation high rate of industrial strike, ill –feeling, hatred, frustration and in extreme case hostility which can cause factions in an organization/company the essence of this study is t highlight these behavioural problems and put the management in a good frame of mind to be able to avoid these problems and be able to benefit from the advantages associated with organization theory view points
1.6 SCOPE/LIMITATION OF THE STUDY
It would be pertinent at this point in time to say categorically and emphatically that this study would in the main be in exhaustive realizing the indisputable fact that the topic is wide, the write uphas consequently been narrowed to the most relevant area.
This area being the management accounting techniques as they should apply to brewing industry. This paper is divided into five chapters. The first chapter is an introductory one and chapter two gives overview brref industry of the organization, research, Hypothesis, significance of the study was treated skeletally and operational definition of the term. However, the research in organizing his materials for this work had difficulties in terms of finance and time . several trips were made to the organization in other to obtain information relevant to this work. Even at the organization the staff though co-operated to certain measure had a feeling that the researcher visits robbed them of their valuable hours which they had expected to utilize on their jobs and so disappointed the researcher in some occasions as regards appointment scheduled.
In carrying out this study, the researcher therefore restricted himself to management accounting techniques where in the organization Nigerian Breweries Plc 9th mile corner Enugu, Enugu State. This decision to the still of the management techniques in this organization is informed by the lack of time in carrying our an in –depth study in the entire Breweries industry.
- ASSUMPTION OF THE STUDY
The research is of the assumption that management accounting techniques as being used in Nigerian Breweries PLC 9th mile corner Enugu State of Nigeria is based essentially on traditional management accounting view in contest to a more realistic organization theory.
Identified some set of behavioural assumptions are:-
- The primary function of management accounting is to and management in maximizing profit.
- The accounting system is a control device which make it possible for management to identify and correct undesirable performance.
- Organization participants are motivate primary by economic forces.
- Human beings are ordinarily LG27, Innogicient and Wastefull.
- There are sufficient certainty rationality and knowledge with the system to permit an accurate comparison of responsibility for performance and the ultimate benefit and costs of that performance.
These assumptions relates closely to the accounting view that is necessary to push workers in order to obtain adequate performance, gain goals and motivation but presupposes that the needs and objectives of the organization. The implications of the above behavioural assumptions which are implicit in the management accounting cannot be ignored. It is clear that behaviourally, management accounting techniques can serve as a decent to low congruence, and that the accounting function under such circumstances can be a source of undesirable behavioural responses as frustration, conflict and rigidity. It is not necessary management accounting as such that is responsible for the kind of organizational problem under consideration here. Rather, the difficulty seems to be more closely related to the manner in which accounting is used. Hence, the mode of implementation and means of interpretation are crucial to the success of the techniques as means to achieve a desirable performance.
The study investigated whether managers and accountants in the company studied are operating their accounting system with the management accounting view highlighted above.
Their views will be analyzed on the following basis:-
- Assumptions about the organizational goals
- Assumptions about the behavirour of workers
- Assumptions about the behavirour of management
- Assumptions about the role of management accounting.
And dysfunctional consequences of the use of budgeting, standard costing and cost- volume profit analysis.
- OPERATIONAL DEFINITION OF THE TERM
Management accounting is defined as accounting designed for or adopted to the information needs of various levels of management.
The chartered institute of management Accountant (CIMA) defines management accounting as an integral part of management accounting as an integral part of management concern with identifying, presenting and interpreting information used for:
- formulating strategy
- planning and controlling activities
- decision taking
- optimizing the use of resources
- disclosure of shareholders and other external to the entity
- disclosure to employees and other external safeguarding assets.
Management accounting therefore is primary concerned with data gathering from internal and external sources analysis, processing, interpreting and communication the resulting information for use within the organization so that management can more effectively plan, make decisions and control operations. Management accountant is to use data from financial and cost accounting systems to conduct special investigations to gather required data whereby he used both accounting and appropriate techniques from statistics and operations research, the data collection and record keeping, analysis of data and preparation of reports for management use.
MANAGEMENT OBJECTIVE: In order to run his organization effectively and efficiently, the manger has to make decision and to do this, he has to be guided. This management objective is there any activity for which a separate measurement of management is required. This activity might be a product of a services.
VARIANCE ANALYSIS
The major aim of variance is to show the efficiency of managers and other personnel’s in carrying out their work variance analysis is operated in a dynamic environment, hence attempt to operate static standards of conflict in understanding the meaning of variance analysis.
COST-VOLUME- PROFIT ANALYSIS
Cost – volume profit analysis (C-V-P) is a management accounting tools whose results must be viewed with caution, like all costs can be separate into their fixed and variable components. The behaviour of cost and revenue curve is unear for the relevant range. It is normal to restrict the analysis for a single product, in a single time period, under conditions of certainty of knowledge about the variable involved.
PERFROMANCE EVALUATION
This involves assessing a manger’s performance on his ability to meet budgets. This performance evaluation as observed in manager’s budget record is used in considering a manager for promotion or for a salary increase or for some other form of recognition.
MOTIVATION AND GOAL CONGRUENCE
If the goal congruence is the objective of an organization and that of the individuals participating in its achievement agree, there will be a motivational impact on the participants, to achieve the planned goal congruence.
COMMUNICATION
The full budgetary process involves liaison and discussion between all levels of management is an important formalavenue of communicating between top and lower levels of management regarding the organization’s long and short term objectives and the practical problems of implementing those objectives.
REGULAR REVISIONS OF BUDGETS AND TARGETS
Budgets should be administered in a flexible manager. Rigid adherence to budgets which are clearly appropriated for current condition will cause the whole management system to loose credibility and effectiveness.
MANAGEMENT ACCOUNTING
TECHNIQUE/BEHAVIOURAL PERSEPECTIVE
It is motivated by the fact that management accounting which is the information system of a firm is essentially a behavioural function because managers must be influenced to take at action that are in the best interest of their firm, and employees must be influenced to make their possible contributions to the organizations goals.
Management tend to operate their accounting techniques with the assumptions that the more sophisticated the techniques are the more likehood of success in controlling and improving performance.
These assumptions normally elicit responses from the employees which range from blaming the techniques used as the cause of their problem to extreme case of frustration, hatred and hostility to the organization.
The type of behaviour mangers and accountants will exhibit in the design and operation of their accounting techniques can be traced to the underlying assumptions associated with traditional management accounting organization. The study will expose the type of attitudes management accountant in Nigeria Breweries Plc Enugu are having. It will highlight the inefficiencies of these assumptions with the view to expose practising managers and accountants to a more realistic view that will be of greater benefit to the operation of their organization.
REFERENCES
A.O Mobwubu (principles and practices of cost Accounting) I. Bs Press Nigeria 1995 pg.2
Birnbery J.C. and Raghu Nath, (1974) implications of behavioural science for managerial accounting in behavioural assets of accounting a book of reading? Edition by Schiffi lwain prentice Hall Inc.
Carbone T.C “ Futurology and Management Accounting Cost and Management Journal of the society of management accountant of Canada. Vol. 53, No 6 Nov-December, 1979.
French J.R.P Isreal 3 (1960) “An experiment on participation in a Norwegian factory, Human Relations .
Levine, Marc. M “The behaviroual implication participate budgeting cost and management. Journal of the society of management accountants of Canada Vol. 55 No 2 March – April.
March J.G Simon H.A Organizations New York. John Wiley and Son 4th edition 1968.
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THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE
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