Management, Uncertainty, and Accounting (eBook)

Akira Nishimura, Emeritus Professor of Kyushu University and Visiting Professor of Beppu University, has published numerous books on management accounting. He previously served as President of Beppu University and Dean of Faculty of Economics at Kyushu University. 

Preface and Acknowledgments 5
Contents 14
List of Abbreviations 16
List of Figures 18
List of Tables 22
Chapter 1: Introduction 25
1.1 Fundamental Issues of This Book 25
1.2 Management and Management Accounting 27
Scientific Management 27
Management and Recording 29
1.3 Scientific Management and Concepts of “Entrepreneur”/“Businessman” 30
Similarities and Differences Between Veblen and Taylor 30
Knight’s Theory of Uncertainty and Scientific Management 33
Uncertainty, Profit, and Management 34
Establishment of Modern Business Management and Management Accounting: The Fusion of Scientific Management and Standard Cost Accounting 35
1.4 Uncertainty and the Development of Management and Management Accounting Models 37
Historical Development of Management and Management Accounting 37
Logical Analysis of Management and Management Accounting Systems 41
1.5 New Synthesis of Information, Management, and Management Accounting at the Present Stage 44
1.6 Conclusion on Contemporary Management and Management Accounting in Uncertainty 50
Bibliography 52
Chapter 2: Enterprise Governance and Management Accounting from the Viewpoint of Feed-­Forward Control 54
2.1 Introduction 54
2.2 Institutional and Capital Structural Aspects of Corporate Governance 55
2.3 Bankruptcy and Corporate Governance in Japan 60
2.4 Risk Management and Business Governance 64
2.5 Enterprise Governance and Feed-Forward Control 67
2.6 Conclusion 71
Bibliography 72
Chapter 3: Conceptual Analysis of Value-Based Management and Accounting: With Reference to Japanese Practices 74
3.1 Introduction 74
3.2 Existing Literature and Accounting Cognition 76
3.3 Value and Management 77
Basic Concepts 77
Double Aspect of Management 79
3.4 Structure of Value-Based Management 80
Leadership and Uncertainty 80
Visible and Virtual Management 81
Some Practices of VBM in Japan 83
3.5 Value-Based Management Accounting and Analytical Model of Variance 85
Some Rudimentary Experiences 85
Structure of Variance Analysis 86
3.6 Conclusion 91
Bibliography 93
Chapter 4: Uncertainty and Management Accounting: Opportunity, Profit Opportunity, and Profit 96
4.1 Introduction 96
4.2 Uncertainty and Controllability in Business Management 97
4.3 Knight’s Theory on Uncertainty and Profit 100
Uncertainty and Knowledge 100
Entrepreneur’s Connection with Profit or Risk 101
4.4 Uncertainty and Decision-Making 104
The Works of Simon and Anthony, and Nonprogrammed Decision 104
ASOBAT’s Thought and Decision-Making Process 105
Demski’s Model and Profit Management 107
4.5 Some Cases of Lost Profit Opportunity in Large Business 109
4.6 Opportunity, Profit Opportunity, and Profit 113
4.7 Conclusion 115
Bibliography 117
Chapter 5: Profit Opportunity, Strategic Innovation, and Management Accounting 119
5.1 Introduction 119
5.2 Opportunity and Profit Opportunity 120
Simons’s Concept of ‘Opportunity Space’ 121
Haynie’s Concept of Evaluation 122
Condensation 123
5.3 Strategic Innovation and Profit Opportunity 125
Japanese Production and Management Systems: Lean Production 126
External Innovation: Agile Supply Chain Systems 128
Global Innovation 130
5.4 Strategic Innovations and Cost Design 133
The Three Innovations and the Creation of Profit Opportunity 133
Transfiguration of Cost Design in Japan 135
5.5 Profit Opportunity and Profit Opportunity–Based Variance Analysis 138
Meanings of Profit Opportunity–Based Variance Analysis 138
Profit Opportunity–Based Variance Analysis in the Integrated Cycle of Feed-Forward and Feedback Management 139
5.6 Conclusion 142
Appendix 144
Bibliography 145
Chapter 6: Strategic Management Accounting and Feed-Forward Management: With Reference to the Unified Management of Profit Opportunity and Risk 150
6.1 Introduction 150
6.2 Strategic Cost Management and Accounting Information 151
Strategic Management and Nonfinancial Information 151
Strategic Aspect of Nonfinancial Information 152
A Controversial Point 154
6.3 Roles of Information and Organizational Efforts 155
Balanced Scorecard Approach and Organizational Mobility for Strategy 155
Controversial Points 156
6.4 Opportunity Space or Risk Thought and Strategic Management 159
Opportunity or Risk Management and New Gaps 159
Comprehensive Risk Management and Feed-Forward Management Accounting 163
6.5 Feed-Forward Management Accounting in the Unified Management of Profit Opportunity and Risk 167
6.6 Conclusion 169
Discussion for Further Research 170
Bibliography 171
Chapter 7: Transforming Cost Design into Environmentally Conscious Cost Design in Japan: Likelihood and Problems for Further Development 174
7.1 Introduction 174
7.2 Cost Design and Its Space-Time Expansion 176
Comparison of Cost Design with the Standard Cost System 176
Extension of Cost Design to Supply Chains and the Product Life Cycle 178
7.3 Cost Design and Environmentally Conscious Manufacturing of Japanese Companies in Electric Machine and Transportation Equipment Industries 182
The Present State of Environmentally Conscious Management 182
Structures and Problems of Environmentally Conscious Cost Design 184
7.4 Eco-Procurement and the Future Development of Environmentally Conscious Cost Design 191
Problems and Challenges 191
Questions and Possible Solution Under Complicated Supply Chain System 192
7.5 Conclusion 196
Bibliography 198
Chapter 8: Comprehensive Opportunity and Lost Opportunity Control Model and Enterprise Risk Management 205
8.1 Introduction 205
8.2 Basic Framework of the Accounting Control System 207
8.3 Development of Accounting Control Systems 210
Traditional Accounting Control System 210
Demski’s Model: Ex Post System 211
Cost Design and the Feed-Forward Control Model 213
8.4 COLC Model and Profit Design as an Amplified Form of Cost Design 216
Structure and Characteristics 216
COLC Model and Its Historical Implication 218
8.5 COLC Model and Risk Management Report 221
Risk Management Report Under the COLC Model 221
Risk Management Report and Corporate Accountability 223
8.6 Conclusion 228
Bibliography 230
Chapter 9: Foreign Exchange Risk and Profit Improvement in the Comprehensive Opportunity and Lost Opportunity Control Model 234
9.1 Introduction 234
9.2 Prior Research and Literature 236
Literature on the Interrelation Between Risk Management and Management Accounting 236
Proposal of the COLC Model 237
9.3 Effects of Foreign Exchange Rate Risks on Manufacturing Performance in Japanese Manufacturing Companies 239
9.4 COLC Model and Hedge Accounting 243
Derivatives and Risk Management 243
Hedging and the COLC Model 244
More Proactive Countermeasures Against the Risk of Foreign Exchange Fluctuations 246
9.5 Synthetic Development of the COLC Model in Foreign Exchange Risks and Derivatives 251
9.6 Conclusion 257
Bibliography 258
Chapter 10: Synthesis of Environment, Risk, Function, and Cost in Profit Design 261
10.1 Introduction 261
10.2 Environmentally Conscious Management and Supply Chain 262
10.3 Green Factories and Green Products 265
10.4 Structure and Problems of Environmentally Conscious Cost Design 266
10.5 Conceptualization of Profit Design in Relation to Environment, Risk, and Function 269
Bibliography 271
Chapter 11: Recent Development and Features of Management System in China: The Case of Cellular Phone Handset Manufacturers 272
11.1 Introduction 272
11.2 Background and Present Features of Chinese Management System 273
11.3 The Recent Chinese Economy and Enterprise Globalization 274
Globalization of Production and Markets in ZTE and Its New Third Wave in International Management System 278
11.4 Structure of the Chinese Production and Management System in Reference to that of the Japanese 283
Structure and Features of Chinese Production and Management System 283
The Comparison of the Chinese Management System with the Japanese 285
11.5 The Bipolar Diversity of Chinese Enterprises and Reorganization 289
11.6 Possibility of a New Potential in World Management System and Uncertainty 291
Third Wave of Business Management 291
Innovation of Business Management and Uncertainty in ‘New Normality’ 293
11.7 Conclusion 295
Bibliography 298
Chapter 12: Examination of Chinese Enterprise Risk Management from the Perspective of the Integrated Management of Profit Opportunity and Risk 300
12.1 Structure and Meanings of Government-Based Enterprise Risk Management 300
Regulations and Meanings 300
The Structure of the Dual Type of Risk Management 303
12.2 Governmental Economic Policy and Enterprise Risk Management 305
12.3 Practical Risk Management Problems in a Group Company and Supply Chain 309
Risk Management of a Finance Company in a Group Company 309
Risk Management in the Supply Chain: The Case of Shen Long Automobile Company 311
12.4 Profitability and Enterprise Risk Management 314
Profitability of Top 500 Enterprises by Revenue: Background on Risk Management 314
Present Problems Facing High-Profit and Deficit Enterprises 321
12.5 Chinese Enterprise Risk Management and the Comprehensive Opportunity and Lost Opportunity Control Model9 322
12.6 Conclusion 327
Bibliography 330
Correction to: Management, Uncertainty, and Accounting 334
Bibliography 335
Index 359