Responsible Accounting Essay
1. Identify at least two behavioral that could arise
There are two potential behavior advantages if manager accepts and participate in the responsibility accounting system and participatory budgeting system. Responsibility accounting is used to measure the performance of people and department to foster goal congruence whereas, participatory budgeting system is a budgeting process under which those people impacted by a budget are actively involved in the budget creation process. When BSC’S manager is likely to accept the system and be motivated to attain the budget target, they were actively involved in setting the goals and know what is expected of them. It would be motivate them to plan ahead and promote goal congruence. Besides that, manager would be pleased to be responsible only for those items they can control because they have certain objective to be achieved. Furthermore, communication and group cohesiveness would be improved because managers would feel part of a team due to participate in both planning and implementation system that are to be adopted
2. Identify at least two potential problems that could arise Responsible Accounting System
In BSC responsible accounting system, the two potential problems that might be arise if the manager did not accept the changes in the philosophy. First they will be a problem if they could not resent in being measured on an individual basis rather than the new system. They may have responsible for costs over which they have no control on it. So the manager must understand the new responsibilities in new culture of management and how they must operates and gives cooperation on it. If the manager did not accept the changes, they might face with the high focus on their own departments goal and this will contribute to the lack of communication between departments and to the company performance.
Participating Budgeting System
Participating budgeting system encouraged the manager to be more motivated in doing their jobs and take responsibility to achieve the organization goals. This will encourage creativity and also ideas to the organization community to work as a team and giving cooperation to each other. However, overemphasis on department goals can hurt cross departmental employee relation due to the different motivation and also goals.
3. Discuss the likelihood that the system will contribute to the alignment of organizational and personal goals. Responsibility Accounting System.
This system is used to measure the performance of people and departments to foster goal congruence. It means that the employees and organization are achieving and have same goals and objective. Therefore, if the company adopting this system it will help to ensure that the organizational and personal goals are aligned and help to achieve company’s objective. Since Commercial Maintenance, Inc. took the time to fully explain and communicate the system to BSC’s managers, by pointing out the advantages and encouraging their participation, organizational and personal goals will likely become aligned. Hence, it will increase the management performance as well as the company reputations.
Participatory Budgeting System.
Participatory budgeting is a process of democratic and decision making, and a type of participatory democracy, in which managers or employees decide how to allocate the organization budget. Participatory budgeting allows both organization and employees to identify, discuss and gives them the power to make real decisions about how money is spent. If the company implementing this system it will give benefit equally to the organization and employees because the managers and employees will involve in setting up the organization budget. They will know and understand more what the company wants and needs. Therefore, this system also will contribute to the alignment of organizational and personal goals and give lots of benefit to BSC.