Dynamic environmental conditions

Robert S. Kaplan in 1984 stated that “The challenges of the competitive environment in the 1980s should cause us to re-examine our traditional cost accounting and management control systems.

” Again in 1994, he said that: “The past 10 years have seen a revolution in management accounting theory and practice”. The seeds of the revolution can be seen in publications in the early to mid 1980s(Eiler, Goletz & Keegan, 1982; Kaplan 1983, 1984, 1985; Howell et al., 1987; Johnson & Kaplan, 1987) that identified the fallings & obsolescence of existing cost & performance measurement systems.Since that time remarkable innovations in management accounting have been made & those concepts have been widely known, accepted & implemented in practice & integrated with great pace. Management accounting of today has only developed in the last 60 odd years as a result of a previous period of fundamental change in the nature of the development economics & the organizations that operate within them. As these underlying bases for management accounting practice change yet again, the discipline must change to match them.

The challenge is not facing these changes but the rate at which these are taking place.Management accounting is at a critical juncture. Increased competition & uncertain business conditions have put significant pressure on corporate management to make informed business decisions & maximize their company’s financial performance. In response, a range of management accounting tools ; techniques has emerged. Institute of Management Accountants (IMA) ; Ernst ; Young (E;Y) undertook a survey to understand the evolving role of management accountants, the goals of the organizations they serve, and the tools they use. The survey revealed that traditional management accounting tools are still widely used.

Joseph Z. Szendi and Robert C. Elmore in their article “Management Accounting: Are New Techniques Making In-Roads with Practitioners?” stated the findings of a study that new techniques are being adopted while traditional systems are being maintained by manufacturing firms.The evolution of management accounting and its changing pattern of how it takes the shape as per needs of the environment show that it will keep on changing to cope with the new dynamic environment in the future. As this is a transitional period from traditional to new management accounting, organizations still have been using the traditional techniques and implementing the new techniques gradually and successfully. Organizations are more involved in the research and development on Management Accounting than the past.

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So, the role of Management Accounting in the future looks good. Proper mix of traditional and new management accounting concepts and techniques, continuous improvement and innovation through R;D, extensive development of Information Technology, consideration of economic, social, cultural, political, global, internal ; external, financial ; non-financial factors and most importantly a customer-focused framework will enable Management Accounting to cope with the new sets of dynamic environmental conditions.REFERENCES1. Drury, C. (1996). Management and Cost Accounting, 4th edn, International Thomson Business Press, pp. 831-582. Booth, P.

, The Future of Management Accounting, Management Accounting Issues Report Number 1 – June 19953. Kaplan, R.S.

(1984), The Evolution of Management Accounting, The Accounting Review, LIX (3), pp. 390-4184. Johnson, H. T., ; Kaplan, R. S. (1987).

Relevance lost: The rise and fall of management accounting. Boston: Harvard Business School Press.