MANAGEMENT CONTROL, MANAGEMENT ACCOUNTING 47
Research suggests that the management control paradigm may still be domi-
nated by management accounting and that non-financial performance measure-
ment is isolated from, rather than integrated with, management accounting.
Despite the proliferation of non-financial measures, many remain rooted in short-
term financial quantification.
Brignall and Ballantine (1996) described the concept and history of multidimen-
sional performance measurement (PM):
PM systems are part of an attempt to give management accounting a more
strategic, outward-looking focus, incorporating non-financial, competitor-
centred and customer-focused information into the search for a sustainable
competitive advantage in services. (p. 27)Otley (1999, see earlier in this chapter) concluded that performancemanagement
(which he contrasted with performancemeasurement) goes beyond the bound-
aries of traditional management accounting. It could be achieved by accountants
having a better understanding of the operational activities of the business and
building this understanding into control systems design; connecting control sys-
tems with business strategy, which has to some extent been addressed by the
proponents of strategic management accounting (see below); and focusing on the
external environment within which the business operates, through a value-chain-
based approach.
One avenue that may address the need for a holistic approach to performance
management is provided bystrategic enterprise management (SEM).Thisisbased
on an information system that supports the strategic management process, and
aims to overcome the difficulties of integrating information from diverse systems.
It is based on the concept of a data warehouse holding large amounts of data
that can be accessed by a range of analytical tools such as Balanced Scorecard-
type measures, activity-based management, benchmarking or shareholder value
measures. The end result is argued to be faster and better managerial decision-
making throughout the organization using information captured both from inside
and outside the organization. The weakness of the SEM approach is its cost, as it is
a systems-based solution that requires integration of data typically held in many
systems, often in different formats with overlapping and ambiguous connections.
This brings us to a further development in accounting that looks beyond the
boundaries of the business organization.
Strategic management accounting...........................
In their bookRelevance Lost, Johnson and Kaplan (1987) argued that management
accounting and control systems could not cope with the information demands
of the new manufacturing environment and the increased importance of service
industries. The notion ofstrategic management accounting (SMA)is linked with
business strategy and maintaining or increasing competitive advantage.
The term strategic management accounting was coined by Simmonds in 1981.
Simmonds defined SMA as: