Abstract
“Organisational Design is the process of choosing and implementing structures that best arrange resources to serve the organisation’s mission and objectives.” Demand for change in organisation design often comes when organisation need to solve a problem or they faces some situation like lack of knowledge about customers due to change in customers preference and tastes, lack of coordination between workers and management, lack of decision making power and many more. But perfect organisation design also means considering other factors which have direct and indirect influence on organisation i.e. External environment, People, Strategy and Accounting information. Thus my research focuses on how the accounting information system plays a crucial role in organisation design and how different organisation design demands different accounting information.
Implications
Before going into the depth of what accounting information is required for different organisation design, let me give you brief description about two specific organisation design which I am focusing on in this research essay i.e. Bureaucratic design and Adaptive Design
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Few unique features of bureaucratic design are clear cut division of work, formal organisational chart, unwilling to adapt and narrow span of control. They follows Centralised authority and top management have a great deal of control over decision making. Fast food joints like McDonalds or KFC are the best example of these type of organisation design. If we visits these food joints we experience everyone follows proper rules and procedures, wears same uniform and they have their standard menu for a quiet long time. Thus centralised authority allows them to serve many customers in short period of time and their work is so predictable that they leave very little room for
Top-level managers in bureaucratic organizational structures exercise a great deal of control over organizational strategy decisions, which is ideal for business owners with a command and control style. As for the disadvantages, bureaucratic structures can discourage creativity and innovation throughout the organization. No matter how ingenious a business owner is, it is virtually impossible for a single individual to generate the range of strategic ideas possible in a large, interdisciplinary
Management accounting in organisation is very important for decision-making and to make the business more efficient and therefore increasing its profits. Is the process of preparing accounts that can help managers to make day-to-day and short-term decisions, by providing them with accurate and timely key financial and statistical information...
Bureaucracy has been the main form of organisation for over a century and can be characterised by the following: functional specialisation, employees carrying out one function of activity as their primary role; hierarchy of authority, those in superior positions having authority based solely on the virtue of the position itself; a system of rules, the tasks of the organisation following a formal set of procedures and practices; and impersonality, individuals being treated on the basis of the rules rather than emotions and personality (Knights & Willmott, 2012). The mainstream perspective states that a bureaucratic organisation’s central aim is to maximise efficiency, objectivity and fairness and can be thought of as a ‘machine’ with the people making up the components (Knights & Willmott, 2012). This view attributes three problems to this rule-centred organisation: poor motivation, poor customer service and a resistance to innovation and change (Knights & Willmott, 2012). Employees in bureaucratic organisations tend not to be committed to their
Financial and Managerial accounting are used for making sound financial decisions about an organization. They provide information of past quantitative financial activities and are useful in making future economic decisions. (Albrecht, Stice, Stice, & Skousen, 2002) The same financial data is used to derive reports for each accounting process yet they differ in some ways. Financial accounting primarily provides external reports for external users such as stock holders, creditors, regulating authority and others. (Garrison, Noreen, & Brewer, 2010) On the other hand Managerial accounting is concern with providing information that deals with the internal viability of the organization and is tailored to meet the needs of an individual organization. (Albrecht, Stice, Stice, & Skousen, 2002)
In centralized structure, all the decisions are in hands of the top level management and later passed on to the lower level. This structure is mainly found in small scale industries where the hierarchy level is low. In decentralized structure, equal distribution of authority is given to each department to make decisions required to achieve the organizational goal. This structure is found in many large scale industries to run the organizational smoothly and efficiently.
Bureaucracy is an organizational design based on the concept of standardization. “It is characterized by highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command” (Judge & Robbins, 2007, p.
An organisation’s management is based on theories developed by researchers that study what managers do and what instituted good management practice. This has led to the formation of a new perspective on management that is called general administrative theory. The theory we are focusing on was developed by a German sociologist named Max Weber. According to him, bureaucracy is the most efficient method of organisation. What is bureaucracy? It is a form of organisation categorised by division of labour, comprehensive rules and regulations, a well-defined hierarchy and objective based relationships. In the early 1900s Max Weber’s bureaucratic theory was spread throughout public and private sectors although it was largely discredited by organisations around the world.
I am interested in conducting research and teaching in managerial accounting, auditing and assurance services and accounting information systems. In particular, I am interested in exploring the role of accounting information systems in decision making, internal control, and auditing. In order to gain an appreciation of these and related issues, it is essential for me to have a strong grounding accounting, accounting information systems, information technology, managerial accounting, as well as gain a general economic and management perspective.
Since Information technologies develop progressively, the manual accounting information system have become insufficient for decision making, as a result, business firms which operate in either developing or developed economics consider computerized accounting system as an effective mean to ensures the effectiveness and efficiency of information flow in recording, storing processing, and analyzing financial data. This research paper will highlight the concept of Accounting Information System generally, and Computerized Accounting Information system specifically.
Organizations in today’s world need to adapt and overcome many obstacles that are predictable as well as unpredictable. Max Weber outlines the five basic principles of bureaucracy which are as follows: The Division of Labor, Hierarchy of Authority, Written Rules and Regulations, Impersonality Principal, and Technical Qualifications. These basic principals were designed to maximize productivity and assert authority over subordinates in the workforce. (Weber, 1968) In present day the basic principles of Weber’s bureaucratic design are still visible in just about every organization. The only variable is to what extent they are applied.
According to Sapru R.K. (2008) p370-371 the traditional ideal of public administration which inclined to be firm and bureaucratic was based on processes instead of outcomes and on setting procedures to follow instead of focusing on results. This paradigm can be regarded as an administration under formal control of the political control, constructed on a firmly ranked model of bureaucracy, run by permanent and neutral public servants, driven only by public concern. In emerging nations the administration was true bureaucracy meaning government by officers. In this perspective Smith (1996) p235-6 perceived that“the bureaucracy controls and manages the means of production through the government. It increases chances for bureaucratic careers by the creation of public figures,demanding public managers, marketing boards.
Accounting dates back as far as first centuries, is the language of business. As everything has gone through many changes, accounting has also changed many times through out the centuries. It went from the use of abacus to the most advanced softwares, and computers. With these drastic improvements nowadays accounting, financial accounting and management are facing big challenges. From the presentation of the reports to communication to the users, investors, and owners, the accounting field has gained totally a new shape from two decades ago. Today with the dynamic change in every aspect of life, the accounting field has to act fast and be able to adapt these new changes and challenges in order to survive.
Different organisational structures are used in all types of businesses and companies. Organisational structure is a system of tasks, workflows, reporting relationships and communication links; that if used fittingly, can be an asset to the organisation (Schermerhorn et al. 2014, p. 260). This can be hard for managers as the environment and times are always changing and with that, structures must change also (Schermerhorn et al. 2014, p. 260). Two types of structures have been created from the changing times; vertical and horizontal. Traditional structures have used this vertical system while the contemporary movement of structures are opting for a horizontal approach. Both these traditional and modern structures have many organisational charts for structuring the many different varieties of businesses.
Large organisations with established rules and regulations with multiple hierarchical layers tend to structured and work effectively. However, Weber also recognized that bureaucracies could have negative consequences such as inflexibility and dehumanization. The over emphasis on structure, rules and regulations, could restrict employees to be innovative, as they are not given the opportunity to voice their own opinions. This is known as Rep Tape. Weber also talked about the ‘iron cage’ of instrumental rationality. Employees are almost trapped in a calculated system that has major emphasis on efficiency and control with little concern for the wellbeing of the employee and their individual freedom. The division of hierarchical layers may slow down the process of communication, which effects the organisation negatively. Bureaucracy has proven itself to be the most successful way of running an organisations. “society has yet to discover anything that works better.” (Kettle,2006) However, Goffman’s sociological studies of institutional life highlight the dehumanizing effects of bureaucratic systems. (Cooke and Philpin,
The following essay aims to analyse in depth a computerised accounting system and its aspects such as its history, what technologies is based on, and how it has developed since its beginning. Other aspects such as the current state of the system and the interactions with other systems and the future of the system will also be covered in this paper.