Management Accounting Information System
A management accounting information system (MAIS) is a system that helps an organization to manage its accounts better. This information system can help managers to manage the organization. In order to boost and measure an organization’s productivity, the accounting information system comes in handy for managers (Frederick & Meek, 2002). The evolution of time in business demands that accounting and informational needs of an organization change with it, as the organization is growing and developing. This is both in its size, and services or products it offers. It is, therefore, vital for organizations to advocate for a strong MAIS (O’Clock & Devine, 2003). This paper will review some of the factors to consider when establishing a MAIS. Also, the identification of some of the approaches that may be taken to address the factors will occur.
Factors considered when establishing a MAIS
One of the factors to consider when establishing a MAIS across borders is the short versus the long term goals that exist in the organization (Frederick & Meek, 2002). These policies dictate what the multinational corporations (MNC’s) may want to achieve after a specified period. Without these goals presented by management, it is almost impossible for an organization to realise its targets or objectives (O’Clock & Devine, 2003). To protect the integrity of an organization, the crucial nature of this factor should be upheld. In this case, a manager should aim for long term goals for the organization. For example, in the case of U.S. MNC’s, there is the exportation of professionals to perfect the use of these systems and improve the standards of the MNC.
Another factor that may be considered is the level of uncertainty associated with the use of the system. For example, a country like Greece prefers to be risk-free. It has a high, uncertainty-avoidance score. The country does not like to engage in activities that are high risk.
A MNC is as strong as those who run it (Frederick & Meek, 2002). The system should be understood, and before its establishment, all doubt concerning the use of the system should be cleared. The MAIS can be relied on if the management that runs a MNC understands its importance (O’Clock & Devine, 2003).
Moreover, an organization is likely to want a MAIS to provide the feeling of autonomy. This is one factor that is most vital in trying to establish a MAIS. The attainment of autonomy can help an organization be aware of the environment they might be in, and the result of some of their actions (O’Clock & Devine, 2003). A MNC needs its autonomy in order to satisfy the growing need to do their job effectively. An example in this case would be the autocratic nature of some MNC’s in countries like the U.K., can be resented by their subordinates if they do not fulfil their needs to be independent.
Some other factors include risk and the participation of people in the MNC. MNC’s that operate in different parts of the world have different feelings toward their different environments. There is the risk that involves running a MNC in a country different from where one is from originally. These factors should be at the forefront in advocating for the establishment of a MAIS in a MNC (O’Clock & Devine, 2003). The examples of countries like Greece and Japan only engage in activities they are certain about when it comes to their MNC’s.
Approaches taken addressing the factors identified
Some of the approaches that may be taken to address some of the above are already underway. It is surprisingly easy to see MNC’s take up local management teams to head foreign subsidiaries (O’Clock & Devine, 2003). For example, the U.S. is one such country that does not believe in importing experts to run their MNC’s. Managers in MNC’s are responsible for their staff since the success of the organization is their success. The vice versa is also true. This implies that the risk associated with having a MNC in a foreign land reduces (Frederick & Meek, 2002).
Autonomy in the MNC occurs when the management can run the corporation as they wish. This is as long as they do not run it to the ground. They are free to implement whatever policy they wish so long as they achieve the long term goals. It is essential that the organization’s activities be monitored and recorded to know of the progress they might be making as a unit (O’Clock & Devine, 2003). However, this must be done without interference. For example, in the U.K., the members of staff in a MNC is accountable for the attainment of results in the organization.
In conclusion, management accounting information systems need to be welcome in every organization. This is so that every intricate detail in the organization is recorded and detailed for the MNC’s benefits. An MNC’s activities and performance can be improved through the MAIS. That should be the main reason why any organization might advocate for its establishment. This is in all the areas that it may be established.
References
Frederick, D. S., & Meek, G. K. (2002). International accounting. New York: Prentice Hall.
O’Clock, P., & Devine, K. (2003). The role of strategy in the performance evaluation of international strategic business units. New York: Free Press.
