For example, Europeans enjoys extreme sports in winter such as snow sports. Thus, a company will have good sales of snowboards at that time. When the weather shifts to hot season, the company must update its strategy because it depends on customer demand. Second is technology, it is an essential part of society nowadays. It has continuous development; so a company usually needs to update new technology (hardware and software) for improve its performance. This is a reason make a company changing its strategic plan (John Argentina, 1968).
For example, some magazines and printed books have lower demand than electronic books. When internet is popular, people can use e-reader, tablet and laptop, etc to access the internet for search, download and read more new information. Third is competition, companies can produce and provide products to consumers in the market so competitive market is rising. The products can same types but different qualities. The question is about how a company can enhance its competitive advantages in the market (Robert Kaplan and David Norton, 2008).
Hence, this cause will affect changes in strategy. A company has to change and improve its strategy when another company has the same strategic focus. For instance, an authentic company promotes marketing for advertise its products. It provides more information for recognize between an authentic product and a replica or imitation product. Furthermore, structural innovation or transformation is a cause of change in strategic management. Combinations of acquisitions and expansions a business to global markets are required strategic reorganization.
Such variability makes changes in capital, management, market structures, investment, and ownership of an organization (according to Managing Change in Organizations: A Practice Guide). These are inevitable process. For instance, Microsoft bought Ionians device and service division for expand mobile device. Then, it has changed in Ionians strategy to improve Ionians sales such as changes in decision of production and changes in performance controls, etc. Additionally, changes in the positions of CEO (Chief Executive Officers) or BODY (Board of Directors) will affect strategic plan of a company .
The changes can alter a company whether its performance is better or worse. A basic example is changes in CEO of Apple Corporation. The comparison occurs between Steve Jobs and Tim Cook. This is still a present controversy. Next, social economy is also a cause of the change. Different products are suitable with different market areas. Hence, social and cultural characteristics will influence target markets of a company (Michel Thirty, PhD, IMP Fellow, founder and managing partner of Valence Ltd). A company has to changes in strategic plan for different market areas.
Especially, it needs to research and design the new products associated with specific market sector. For example, cold drinks have been good sales in plains where are hot climate. On the other hand, warm drinks are suitable with customers who live in plateaus. Coca Cola Company is one of the top corporations produce soft drinks which are efficient consumption in the both plains and plateaus. Final are criteria, each country has different criterion’s; so a company must achieve them in a country where it operates its business. Hence, changes in criterion’s have strong impacts on a company.
A company also makes changes in its strategy. For instance, countries usually try to reduce carbon dioxide (CA) emissions for preserve the atmosphere. Hence, environmental laws are required by global governments. Industrial companies must update its technology for comply with new criteria. . 2. MANAGEMENT ACCOUNTING Management accounting merges finance, accounting and management such as identification, analysis, measurement and communication. It is the systematic analysis of financial information utilized by management to control, evaluate and operate a business.
There are many factors affecting the changes in management accounting. These are potential change drivers as well as reflecting the different roles that causal factors have in the process of change according to Shields (1997). Management accounting plays an important role in an organization; hence, it will affected by the process of operational change (Lapse and Wright, 2004). All information of management accounting has been researched and debated whether it has changed, should change or has not changed (Robberies and Escapes, 2006).
Management accounting provides accounting information to management for make decisions. Next, a company upgrades its performance from paper to computerized system. This means a new software program applied to manage related data. The company should trainings its employees for reduce risk when it changes system. This is a part of a general plan to execute a successful change in management accounting. In addition, changes in techniques are used to classify and manage the data desired to control a company efficiently. It means using new approach of recording for control data.
This method can be called management information system. It will support managements making decisions. Through many studies, analysts have classification of the reasons for changes in management accounting. The causes are showed above. In 2005, Wizard and Testament carried out the investigation of changes in management accounting. This study showed the variable processes and roles of management accountants in independent ND dependent companies. This research provided questionnaires answered by professional management accounting (COMA).
It reflected information technology, electronic business and organizational structure are the most causes of changes in management accounting. From these researches, changes in management accounting have a lot of reasons and principles. The changes occur not only in the complexity and dimension of the organization (Greenwood and Hinging, 1 996) but also in implementation of organizational strategies efficiently (Lawrence and Sahara, 2002). Nowadays, global market is more competitive. Companies generally find new approaches to improve their performance.