Managerial Accounting as a Tool for Corporate Strategy: Synergy Creation and Anergy Inhibition
2012; Volume: 11; Issue: 1 Linguagem: Inglês
ISSN
1544-0222
Autores Tópico(s)Accounting and Organizational Management
ResumoINTRODUCTION There is no academic consensus on how managerial accounting can be used as a tool to formulate and implement a corporate strategy. For instance, Anthony (1965) advocates the use of managerial accounting information to implement managerial control systems thereby monitoring whether the company is on track towards achieving its strategic goals. Other scholars, however, have expressed doubts over the usefulness of management accounting tools, such as Activity-based Costing (ABC) and the Balanced Scorecard (BSC), to achieve that purpose (Chapman, 2005, pp. 3-4). Working with many companies throughout the last two decades or so, Kaplan and Norton (1996a, 1996b, 2006, and 2008) argue that the BSC may be used as an effective management control system that enables strategy implementation. Skaerbaek and Truggestad (2010) went further to suggest that accounting tools can even shape the strategic options of the company. Most recently, aligning the corporate strategy with its business units' strategies has increasingly drawn attention among scholars and practitioners alike (Kaplan and Norton, 2006). Much of the debate over the rationale behind a corporate strategy has been centered on two issues: synergy creation and product portfolio management. For example, Ansoff (1969) maintains that corporate strategy should be devised with synergy creation in mind. Hofer and Schendel (1978) advocate the formulation of corporate strategy while focusing on product portfolio management. Campbell et al (1995) argue that the creation of synergy is only effective when leveraging common practices and processes among related businesses. For Ito (2007), corporate strategy is crucial not only for the creation of synergy but also for corporate level management by ensuring that corporate value is not eroded. Based on an explorative study of three Japanese companies, this study investigates the effectiveness of the BSC in disseminating the corporate strategy and enhancing the alignment between the corporate level and the business units as advocated by Kaplan and Norton (2006). The alignment is approached with the ultimate objective of creating synergy (1) and/or inhibiting anergy (2). The paper is organized as follows. The first section is devoted to the survey of the literature. In the second section, the authors illustrate the different types of alignment they encounter through exploration of three Japanese companies. The third section will conclude. LITERATURE REVIEW The creation of synergy has sparked a long debate among scholars. Some authors are very skeptical about the effectiveness of the HQ in laying the grounds for synergy creation. They argue that synergy cannot be achieved unless the opportunities on the ground really arise; it should not be imposed by top management. For instance, Goold & Campbell (1998) argue that corporate executives are so obsessed by the potential benefits of synergy that they end up overlooking the downsides. Eisenhart and Galunic (2000) maintain that business units should co-evolve in order to reap the benefits of the opportunities of synergy as they arise. They argue that through frequent meetings and information sharing, business units operating in a dynamic market, rather than the HQ, are in a better position to leverage the opportunities to create value. Based on their studies of several companies, Kaplan and Norton (2006) argue that the BSC has helped in capturing the benefits of alignment. It did so by translating the corporate strategy into corporate policies administered by business units. Priorities of the corporate strategy are then cascaded down the business units to ensure that the business unit's objectives and measures are synchronized with those of the corporate. They add that an alignment index the extent to which corporate goals are aligned with business unit's goals-will help facilitate the alignment process. Enterprises that successfully align their corporate, business units and operating support strategies are deriving greater financial benefits. …
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