By Ahmed Riahi-Belkaoui
Manufacturers and clients of administration accounting details are faced with the most important behavioral phenomena — components which may have an effect on the communique of this data and its use. Riahi-Belkaoui indicates how manufacturers and clients jointly can increase the potency of administration accounting itself. He explains the judgment procedure in administration accounting, identifies and explains the foremost behavioral phenomena, after which presents how one can use them for the firm's gain.
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101 A. D. Chandler, Jr. ”103 The influence of this definition is clear in R. N. ”104 According to the last two definitions, the concern of strategy is the link between the organization and its environment through bold ends (objectives and goals) and means (courses of action and allocation of resources). Other theorists prefer to restrict strategy to only the objectives and goals and exclude the means to achieve them. C. W. Hofer and D. E. ”105 Another limitation is provided by M. E. Porter’s concept of competition strategy as “the search for a favorable competitive position in an industry.
111 Basically, strategies need to be framed in an accounting language and supported by the authority of accounting techniques, indicators, and reports. 112 While cost analysis provides an assessment of the financial impact of managerial decision alternatives, strategic cost analysis will provide cost data for the development of the right strategy necessary to gain competitive advantage. As stated by Shank and Govindarajan, “a sophisticated understanding of a firm’s cost structure can go a long way in the search for sustainable competitive advantage.
Vertical differentiation by authority and responsibility and horizontal differentiation through departmentalization lead to the creation of separate organizational units and necessitate provision for periodic planning and control. This need is met by the cost accounting system. The lines connecting the organization units may imply either line or staff relationships. Line authority implies a basic relationship as defined by the chain of command. It is exerted downward by a superior over subordinates.
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