MANAGEMENT CONTROL IN A BUSINESS NETWORK: NEW CHALLENGES FOR ACCOUNTING
BY DR. ROLAND BARDY
Adjunct Professor, Fachhochschule Worms, Germany; Adjunct Instructor, Goizueta Business School, Emory University, USA; Director (Retired) of BASF Aktiengesellschaft, Ludwigshafen, Germany.
e-mail: rbardy@t–online.de, Tel. + 49 621 41 61 76
INTRODUCTION
Modern enterprises thrive on connectivity. In an environment of highly interconnected business we must look at management accounting as an activity that provides concepts to coordinate partially independent management systems as well as highly interdependent systems. There is a mutual influence between accounting and organisation. Horngren et al. have shown that management accounting is an instrument to influence the behavior of managers in a way that it enhances the attainment of organisational objectives (Horngren, Bhimani, Foster and Datar, 2005).
So, management accounting apparently has to be customised, the need for which has been analysed in the contexts of departmental interdependence (Gerdin, 2005), supply chains (Knight and Harland 2005) and the Internet (Sheehan 2005). Scarce sources are available, however, for accountants who look to develop new skills and techniques when their companies partner a business network (Håkansson and Lind, 2004). This paper considers from where accountants may derive guidance for this work, and how accountants’ work can support the objectives of a network.
ACCOUNTING CUSTOMISATION
The needs to customise are manifold, and consisting of two directions, as follows:
1. Traditional reporting and budgeting need to be adapted to reflect varying input and output; standards of performance need to be created which measure and verify the contribution to common business pr ...