The Role of Accounting Information in Organizations’ Strategic Management

Abstract

Over the last two decades, there have been considerable changes in the business environment because of the use of information technology, modern communication means, and market globalization. Because of these changes, competition augmented and each organization started to search for the most efficient use of resources to dominate markets or at least to keep their market shares. To manage organizations in such complicated environments, managers need a lot of imperative precious information. Some arguments have been made regarding the ability of accounting systems to provide the new information requirements. This stimulated a stream of studies in an attempt to improve accounting systems and accounting information to serve the new management requirements. Some of these studies merged the accounting with the organizations’ strategic management in a new theme called “Strategic Accounting”. This paper concentrates on the concept of Strategic Accounting (SA) as a field and demonstrates how strategic management approaches affect the information developed by accounting systems. The paper illustrates definitions of SA, SA development stages, approaches that merge accounting with strategic management, and the effect of each of these approaches on the information that accounting systems provide to support organizations’ strategic management.