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Changing Role of Management Accounting: Lithuanian Experience Case Studies

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Author(s): Loreta Valančienė | Edita Gimžauskienė

Journal: Engineering Economics
ISSN 1392-2785

Volume: 5;
Start page: 16;
Date: 2007;
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Keywords: management accounting system | implementation stages | balanced scorecard | activity based costing

ABSTRACT
The preconditions of knowledge economy have influencedglobal changes, which, consequently, had an impacton the nature of organizational equity. Furthermore,a dynamic and competitive climate urges managers toperfect their skills in global orientation, strategic flexibilityand quick response to changes as a prerequisite ofworking under ever-transforming conditions, where anorganization should be in the state of continuous development,responding to new technologies, new markets,new businesses, and new people (employees and consumers).The above-mentioned business environment andinformation access alternate the nature of market competitionas well as determine particular information demand.Quick response and flexibility could be achieved,only if decisions are based on timely and adequate information,knowledge and experience in managing the externalbusiness environment and internal capacities of anorganization. Thus, the new measurement tools are indemand, which should assist in measuring, planning,evaluating and managing the value-creating process insidethe organization. The role of modern managementaccounting systems has extended from data accumulationto strategy implementation. The most popular managementaccounting conceptions, namely, activity basedcosting (management) and balanced scorecard, disclosehow changed management accounting role integrates afocus on three key stakeholder groups: employees, customersand shareholders. Built on previous managementaccounting studies this article explores Lithuanian experienceimplementing modern costing and performancemeasurement systems.In order to point out the changing role of managementaccounting in Lithuanian organizations an empiricalresearch was performed. This research consists oftwo main stages. 1) Implementation level of modern managementaccounting conceptions and the availability ofinformation for decision making were analyzed usingquantitative data (survey). 2) A deeper analysis was performedin Lithuanian organization disclosing the changingrole of management accounting after implementationof modern costing and performance measurement system(case study).Results of empirical research indicate that there isquite a strong correlation between implementation levelof conceptions (ABCM and / or BSC) and a range ofmanagement areas where information generated with thehelp of those conceptions is useful. Case study organizationhas started integration stages and has created informationbasis for cross functional and vertical communicationthrough different management levels, but meanwhile there is an absence of communicative relationsbetween top and lower management levels.The results of the research disclosed that modernmanagement accounting conceptions might be preconditionfor changing role of management accounting but itdepends on implementation level and organization’s abilityto manage all capacities of these conceptions.
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