CHANGES FACING MANAGEMENT ACCOUNTANTS IN POSTMODERN TIMES
In seeking answers to typical questions associated with morphogenic change (see paragraph 3.2), it becomes apparent that business, and consequently management accountants, have been faced by a confluence of forces of change during the past decade. Chapter 3 defined change, and more particularly the concept of morphogenic change. The three major drivers of change were discussed in paragraph 3.3, namely computer and communication technology, globalisation and the influence of knowledge management in business organisations.
Verma (2002:9), in her deliberations on the impact of change on the development of accounting (based on research by Gray and Hofstede (1988), Robson (1991), and Doupnik and Salter (1995)), came to the conclusion that accounting developed because of the complex interaction between it and the external environment.
Therefore management accounting, as a role player in the business environment and a subfield of accounting, has by no means been unaffected by the drivers of change. Siegel and Sorensen (1999:3) contend that management accounting should undergo perpetual change to remain relevant. They describe change in the world of management accountants as follows:
The characterisation of management accountants in leading-edge companies has gone from 'bean counter' and 'corporate cop' on the periphery of business decision making, to 'business partner' and 'valued team member' at the very centre of strategic activity.
Smart Pros (2004:I) support Siegel and Sorensen in stating that management accountants need to shift their focus away from historical information and an inward perspective (see paragraph 2.2) which largely ignores the supply chain, because it is no longer valid. Wyatt (2002:10) speaks of an overriding phenomenon in terms of the future of management accounting, namely that business customs and practices are changing.
This chapter investigates the effect of the changing business environment on the role of management accountants in postmodern times.
MORPHOGENIC CHANGE IN MANAGEMENT ACCOUNTING
Two authoritative studies on what is required of management accountants were identified in a review of the literature, namely Competency profiles for management accounting practice and practitioners by the International Federation of Accountants (IFAC) in 2002, and a study by the Institute of Management Accounting (IMA) in 1996, updated in 1999, called Counting more, counting less. These studies are briefly summarised in order to provide a
comprehensive overview of the new skills required of management accountants.
Current changes in the business environment were described as morphogenic in paragraph 3.2. Two key questions are typically associated with morphogenic change:
What is the current situation regarding morphogenic change?
Answering this question requires a broad overview of the impact of change on the management accounting profession. This question will be researched in paragraph 4.3.
If the values of management accountants to organisations are influenced by the drivers of change, where are we going?
The second question associated with morphogenic change, namely Where are we going? will be investigated in chapter 6. A balanced scorecard methodology is used to determine the strategic direction of management accounting in South Africa.
An analysis of the current position of management accounting is necessary to determine the extent to which morphogenic change has affected management accounting. Toffler’s waves of change (see diagram 3.2) are applied to assess the role of the drivers of change.
4.2.1 Toffler’s waves of change applied to management accounting
Toffler (1980:27) saw change as a continuous process occurring in different waves. Each of these waves has an impact on society and consequently on the business environment. The...
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