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    The interface between management accounting and organisational strategy : from strategic control to strategic navigation : a thesis presented in partial fulfilment of the requirements for the degree of PhD in Accounting at Massey University, Turitea, Palmerston North, New Zealand
    (Massey University, 2004) Durden, Christopher Harold
    The literature suggests that there is an increasing expectation that management accounting and control systems should have a strong strategic focus, be innovative in design, flexible in operation and should enable rapid organisational change in response to capricious environmental circumstances. A management accounting focus mainly on conventional financial and non-financial based measurement and control is considered too narrow in scope. This thesis examines these issues, and proposes a performance management model for use in a turbulent organisational environment. The thesis initially identifies a gap in the literature in that existing strategic control models do not seem to deal adequately with the issue of the impact of environmental turbulence on organisational strategy. It examines the issues of turbulence and unpredictability in providing an understanding of the nature of the interface between organisational strategy and management accounting. This resulted in the development of the concept of strategic navigation. Successful management of the impact of environmental turbulence, with its capricious and uncontrollable nature, is a core premise underlying strategic navigation. Accordingly, rather than attempting to control turbulence, the emphasis is on rapid and flexible management response and avoidance of limitations on management discretion, judgements and actions that could be imposed by highly structured control and measurement frameworks. This recognises that in relation to turbulent and changing environmental conditions, identifying relevant variables to measure may be difficult and that the actual measurement itself could be an impediment to rapid response. Strategic navigation incorporates an explicit focus on organisational processes to help deal with turbulence. An in-depth case study was undertaken of an organisation operating in a turbulent environment in order to explore the applicability of strategic navigation and its relationship with management accounting. The case findings suggest that rapid management response needs a focus on both operations and strategy, and illustrate how strategic issues and the idea of strategic navigation can potentially drive, and be closely integrated with, the operational side of an organisation. This also encompassed a strong process focus within the case organisation, due to a relatively limited measurement framework. In this context the case findings highlight the importance of an adequate measurement framework within an overall performance management system. Furthermore, the findings indicate how strategic navigation could provide an integrative means of comprehending the external environment, by concentrating on both process and measurement. This is an alternative to the idea of concentrating solely on identifying and developing more and better predictive measurement tools, in particular non-financial measures. In summary, strategic navigation combines a process approach and measurement, as a means of integrating management accounting and strategy, in order to manage organisational performance in a turbulent environment. The development of the concept of strategic navigation is an attempt to extend the role of management accounting beyond traditional organisational control ideas and reflects arguments in the literature for a greater focus on performance management.
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    The determinants of the accounting classification of convertible debt when managers have freedom of choice
    (2005) Bishop, Helen E.
    This study examines the accounting classification of convertible debt in an environment where there is the choice of debt, other capital funds or equity. Contracting theory suggests possible determinants of accounting choice. These are leverage, as a proxy for closeness to debt covenants, the relative size of the convertible financial instrument issued and the contractual terms of the instrument. Two measures of leverage are used. One is debt to earnings before interest, tax, depreciation and amortisation (EBITDA). This variable has been included as it is the most commonly used ratio in debt covenants. The second measure is debt to net tangible assets as this ratio, or similar ratios, have been used in previous accounting studies to proxy for closeness to debt covenants. As leverage ratios tend to vary between industries I identify whether each firm is above or below their industry average. I find that the best predictor of the accounting classification choice is the contractual terms of the instrument. The two debt covenants derived hypotheses are not supported. The leverage of the issuer and the relative size of the issue have no significant influence on the choice of classification.
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    Management accounting education: is there a gap between academia and practitioner perceptions?
    (2003) Hawkes, L. C.; Fowler, M.; Tan, L. M.
    A mail survey was conducted of all Institute of Chartered Accountants of New Zealand accredited Tertiary Education Institutions and 300 randomly selected New Zealand companies to ascertain the views of management accounting academics and practitioners on the contents of management accounting courses and the skills and competencies of recent graduates. The results show that practitioners placed an emphasis on traditional management accounting techniques, while academics placed an emphasis on contemporary techniques. Both groups were in agreement on the skills and characteristics required of recent graduates. An interesting finding was the emergence of negative comments on the arrogance of new graduates and an increased need for graduates to be work ready. These two aspects were not a feature of previous studies. The implications of the results are that academics cannot ignore the teaching of traditional management accounting techniques and may need to increase the coverage of the issues involved in implementing contemporary management accounting techniques.
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    The development of a strategic control framework and its relationship with management accounting
    (2001) Durden, C. H.
    Management accounting systems have been criticised for being excessively focused on shortterm performance. As a result long-term strategic direction and goals may have been neglected. To help overcome this problem it has been suggested that organisations should adopt strategic management accounting techniques and management control systems which are orientated towards the achievement of strategic goals. This paper argues that integration with strategic control would significantly enhance the relevance of management accounting systems. In developing such an approach this paper first integrates the salient features of the extant strategic control models in a framework that recognises the needs of the current business environment. And second, it examines how strategic control could be used as the basis for developing management accounting systems that have a stronger strategic focus.
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    Strategic accounting: revisiting the agenda
    (2000) Nyamori, Robert Ochoki
    Rapid changes in the external environment of organisations have been accompanied by calls for accountants to change the nature of information they provide, the skills they possess and the role they play in the organisation. The proposed changes, which are encapsulated under the phrase accounting for strategic positioning or strategic management accounting are two pronged. On one hand accountants are required to reposition themselves in the organisation hierarchy where they will be involved in the formulation, implementation and choice of strategies. Accountants are also being urged to adopt a range of techniques whose emphasis is futuristic and external to the firm especially emphasizing the importance of monitoring customers and competitors. A review of the literature has revealed that while considerable effort has been put into the development of rational techniques for proposed use less has gone into whether, how and with what effect the proposed techniques have been implemented in organisations and society. The literature has adopted an uncritical approach to the proposals for a strategic accounting, providing little insight into how the discourse of strategy has come to occupy such a position of centrality in organisations and society with other functions seeking to be branded “strategic”.