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The Importance Of Accounting

b The Importance Of AccountingAccounting can help derive the new measurements, tie them to organizational goals and objectives, and integrate them with an organizational pay-for-performance plan. The degree of decentralization must reflect consideration of, among other things, how rapidly decisions need to be made, the willingness of upper management to allow subordinates to make potentially poor decisions, and the level of training required so that workers can understand and evaluate the consequences of their decisions. Decisions should be made only after comparing implementation costs (such as employee training) with expected benefits (such as better communication, more rapid decisions, and higher levels of employee skills).

Besides that, there is also an indication that provides the key linkages between managing resources and managing change in a business. Managers, as the agents of change, must understand internal organizational processes, external markets (customers), available and visionary technologies, current and future competitors, and operating environments. This knowledge helps managers to respond proactively to new market opportunities and to competitors’ actions. Much of the information required by managers comes from the business intelligence system (which includes the accounting information system).

Meanwhile, on the other side, one of the most significant challenges of managing an organization is balancing the short-run and long-run demands for resources. Resources include all organizational assets, including people. In the contemporary business environment, managers must be able to balance short-term and long-term considerations as well as recognize and prioritize strategic resource needs. In addition, managers must be careful to structure strategic initiatives such that they allow flexibility in day-to-day management.

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