Abstract
Developments in the economic environment in the 2000s have become increasingly dynamic and complex. Rapid developments in this kind of economic environment threaten and restrain the sustainability of enterprises. Enterprises need to respond quickly to these burdens and threats to survive and sustain their operations efficaciously in a competitive market in the long run. In order to reduce possible uncertainties in the future and to anticipate economic crises, early risk warning systems should be developed. However, it is seen that management accounting researches are very limited or insufficient on the demand of enterprises for coping with such crises. The aim of this study is to diminish the deficiency in the strategic cost management and prediction of economic crises. Sustainable Balanced Scorecard (SBSC), which was developed as a strategic cost management tool, is constructed in a dynamic way by integrating the early warning system developed for enterprises with an innovative approach into SBSC. Additionally, early warning system model is developed in a manner that successfully predicts economic crises with long short time memory (LSTM) networks using economic macro variables in micro field. As a result of the integration of risk early warning system with SBSC, economic crises will be predicted and necessary strategies will be developed to cope with problems of the crises. Furthermore, predicting economic crises will be turned into opportunities or cause enterprises to make measures with minimum losses. In this model, crisis periods are successfully predicted two crises of 2002 and 2008 with 95.41% accuracy with macroeconomic data between 1998 and 2011.
Highlights
Nowadays, as the rapid developments in the internal and external business environment become increasingly complex and dynamic, enterprises cannot respond to these developments too fast
SUSTAINABLE BALANCED SCORECARD BASED ON EARLY WARNING SYSTEM One of the most common strategic cost management tools used is the Balanced scorecard (BSC) developed by Kaplan and Norton [21]
Enterprises may encounter unsuccessful results if they attempt to predict or manage the crisis with microdata. This is because the effects of economic crises on financial statements of the enterprises emerge at least six months after the crises
Summary
As the rapid developments in the internal and external business environment become increasingly complex and dynamic, enterprises cannot respond to these developments too fast. Hopwood argues that the economic crisis leads to changes in designing of MA Systems that provide better quality of information (more analytical, more precise, and more frequent) to manage economic crises [6] This information should be taken from both internal and external environments and used to reduce the uncertainty experienced by companies due to the economic crises and to close the information gap. They argued that these systems should become more complex and include traditional tools (budget and variance analysis) and new and innovative MA techniques such as ABC, SBSC, Target costing and Life Cycle costing These innovations improve the decision-making process and contribute to the more effective use of management control. MAI is the first application in MA adopted by a business [9]
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