Management Accounting & Control Systems: Strategies for Modern Businesses
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Introduction- Management Accounting Strategies for Modern Businesses
Today's modern world, the evaluation of management accounting majorly focuses on the development of organization for the purpose of future for the upcoming aspect of technology. The concept of management accounting refers to the rapid development of innovation into informational technology and also it helps pre received information due to the increasing competition to the involvement of business and accounting. For instance, if a company wants to measure the percentage of total on time deliveries to the consumer or the customers of a product for a certain period of time then the concept of management accounting plays its role for understanding the customer satisfaction level of the company. The practice of management accounting operates in the different departments or the sections of a company where it is required to measure the transformation of cost or the cost of management in a company. The significant purpose of the management accounting practices is to assess the various operations of the company such as in the framework of planning and budgeting, management and controlling of various costs and also in the achieving of the target goal of the company.
Overview of the Company situation
In reference to the given assignment about the concept of controlling management system and risk management the given company, Street PLC is a company who deals into the businesses of constructions worldwide. It is a well-known construction company across the world which leads the company as the third largest construction organization across the globe. The company extended its branch into the various continents and countries such as in the country of USA, Africa and UAE and in the continent of Asia. The company operates in a highly competitive market that is the reason the company needs to be nearly perfect in the management systems of its operations.
According to the changes in the technology of the industry where the company operates, it is required to form a new management control system as well as risk management systems for the company to efficiently operate into the market and maintain its place in the world ranking.
Management Control System and System of Risk management
The concept of management controlling system refers to the method of system which collects or records various information about the different sections of the company and the collected information in order to evaluate the overall performance of the different department of organization. It collects information of the organization about various aspects such as operational, human resource into the company and also different financial actions activity of the company in the platform of different organizational strategies (Albaddad et al. 2018). For instance, the management controlling system operates into the construction of planning of different strategies and also evaluating various control systems over the financials of the company, performance of the company and safety and security of the company.
The significant function of the management control system of a company is to identify the conflict points and take actions in order to rectify the issue along with the corrective measures to help the company to gain the actual position of growth and development.
System of risk management refers to the integrated system of information which is used to identify and understand the fundamentals of risk and it also helps in the decision making of the businesses of the organization which involves wrist in it. For instance, a company uses a system of risk management during a loss control method in the financial section of the company with identifying the proper corrective measures of the method.
The major function of the system of risk management of a company is to identify the major problematic issues even before it occurred. Similarly, it also helps the company in the opportunity period where it measures the benefit of the opportunity and risk of the opportunity.
Appropriate system of management control
It is known from all the ways that the function of management controlling is the basic function into a company. The procedure of management control systems contains several significant steps in order to play its role effectively in the section of management. The method helps the company to achieve the targeted goal according to the constructed plan for the particular section of the company. An appropriate system of management control involves various steps such as this type of communication or the feedback into the system, the process of forward looking control system, flexible and strategic control and also the control of economy into the business organization. The other factors are the control on employees and working subordinates and must be sustainable. All the steps of the control management must be easy and efficient to understand and also to execute into the various sections of the company.
The system of communication for the feedback is the main pillar of the controlling system of a company. The concept of communication for the feedback is the correction into the organization’s different section's performance by the managerial head of the company. The feedback helps the head of the management to understand the conflict point of the previous plan as well as operations which helps the management team to rectify the problematic issue and implement the appropriate corrective measures into the operations of the company for better control over the different departments of the company.
In most of the cases the delayed reporting or the action into the controlling system can decrease the impact of the effectiveness of management in the company (Ali et al. 2019). Therefore, the systems of controlling the company must be forward looking to decrease the abnormal time requirement for decision making as well as constructing a rapid plan. That is if the system controls the activities of the employees and working subordinates then the work which is done by the employee and working subordinate is equally controlled.
Appropriate Strategies of risk management
The methods through which identification of risk in the organization, the evaluation of all the impact of risk into an organization and various risks which affects the organization is referred as the management of risk into an organization. An appropriate strategy of risk management is to collects or records the data of risk into the business helps the organization to take required decisions in order to combat the risk for achieving the targeted goal of the company.
The significant or the appropriate strategies for management are the identification of the risk of an operation, analyzing or evaluation of the risk, operating the required actions to reduce the risk, contact monitoring the functions after changes and controlling the system through management.
Risk Management Plan
The risk management plan is the first step in order to effectively make a strategy of risk management that is a plan which includes the various risks of the various departments of the company. The risk management plan includes different levels of risk and the future impact of it. It also contains the required action in order to reduce or eliminate the factor of risk in different operations of the company.
Risk identification
The identification of the risk is done according to the plan of the risk management through which the effect of risk is easily identified during the various operations of the organization in the different departments of the company.
Risk Impact Evaluation
After evaluating the impact of the risk into the business organization the time of action begins in the organization to reduce or eliminate the impact of risk in the different sections of the business organization to effectively achieve the targeted goal of the organization without any problematic issue.
Risk Management Actions
After that the evaluating of the impact of the risk into the business organization with proper corrective measures and tools of various aspects are to be used to evaluate the impact of risk into the business organization. After doing the entire requirement to reduce the risk factor into the business organization then it is the time to monitor strategy of risk and the outcome of the implemented strategies of risk into the business organization.
Appropriate methods of performance measuring techniques
The methods through which an organization measures or monitors performance of different significant aspects of the organization that is the various programs and systems is referred as performance management. The tools which are used to identify or evaluate the effective performance of various programs systems into a company are known as tools of performance measurement in the management.
Techniques of various performance measurement into an organization therefore of management section of the company is operated by various skills of graphic ratings objective of management and forced ranking are mainly three processes of measuring performance of the employee as well as various companies. The performance of the company can be indicated through various aspects such as the generation of revenue of the company according to the numbers of customers, the rate of customer retention for the overall value of existing customers
The technique of measuring the performance level of the company can be done through various platforms that is the overall satisfaction of the customer and the relationship management with the customer. The quality growth and expansion of the company through various branches or franchisees can also be a measurement platform in order to measure the quality performance of the company. The performance of the company can also be measured by the working satisfaction of employees and working subordinates of the company and also the employee retention of the company can provide results of a good quality company. Most importantly, the performance of the financial aspect of the company plays a significant role in order to evaluate the overall performance of the company in a given period of time.
Critical analysis of management research
The fundamentals of management is the backbone of any company's existence. The role of the management implements various guidelines and pathways on which different companies operate to effectively achieve the targeted goal in the given period of time. The fundamentals of accounting management provides a platform where the company identifies the best possible ways of collecting information through various aspects and implement into the business organization in order to efficiently meet the goal of the organization. The concept of management accounting refers to the rapid development of innovation into informational technology and also it helps pre received information due to the increasing competition to the involvement of business and accounting.
According to the above diagram it is clear that the small business organization is not rapidly changing into the business section due to the fact that the small cap businesses lack in the management section of the organization because the small business organization does not effectively set a target goal and the level of management is not optimum.
Similarly, in the middle of the diagram the medium business section of the UK provides an overview of continuous growth and downfall in the consecutive years because in some cases the targeted goal of the company achieved through some points of management and on the other hand the downfall of the business is also done by the ineffectiveness of management into the business organization because the medium section lacks in implementing the required performance measuring technique in to the business organization.
In the large business section of the UK it is clear that the growth of this section of the country is uniform as well as consistent according to the different time period (Alzoubi et al. 2019). The reason behind the uniform growth and development and the consistency of the growth and development of the large business section is effective functions of management and also creating the appropriate plans for operating the different activities of business organization which leads this section into a uniform as well as consistent progress.
All the functions of various the section of the country provides an overview about the effect and impact of an effective system of accounting management as well as the system of risk management into an organization which requires various technology and information in order to construct a plan and also to execute the plan effectively into the different section of the business organization in the given period of time. On the general note, the fundamentals of effective management help the company to achieve the targeted goal into a specific period of time at any aspect of conditions and situations of the country.
Recommendations
Here it is recommended that the management controlling system operates into the construction of planning of different strategies and also evaluating various control systems over the financials of the company, performance of the company and safety and security of the company. The company needs to plan for better management in order to effectively manage the worldwide branches of the construction business in the different countries for creating a balance in all the aspects of business and the managing functions of the company. The different operations of the company must be operated in a systematic way to collect information in order to evaluate the overall performance of the different departments of the organization. The evaluating of the impact of the risk into the business organization with proper corrective measures and tools of various aspects are to be used to evaluate the impact of risk into the business organization (Huyen et al .2020). The company needs news to find an effective plan in order to measure the performance in respect to the economic conditions of the country as well as different present resources of the company by which it can facilitate the growth and development aspects of the company in a specific country.
Conclusion
Here it is concluded from the above section of the assignment that the concept of management accounting refers to the rapid development of innovation into informational technology. In simple words, the concept of management accounting focuses on rapid changes in technology in order to compete in the market with the same companies. The strategy of risk management is to collect or record the data of risk into the business helps the organization to take required decisions in order to combat the risk for achieving the targeted goal of the company. The rate of accelerations of improvements guide the performance measurement to the performance management of a company. A well systematic controlling system always focuses on the employee and working subordinate of the company rather than the work of the company. The performance of the financial aspect of the company plays a significant role in order to evaluate the overall performance of the company in a given period of time.
Reference list
Journals
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