2012 ACBSP Region 4 Conference Presentation #6 - El Zayaty
Managerial Accounting andCorporate ResponsibilityAhmed El Zayaty, PhD
Scope of Managerial Accounting: Traditionally managerial accounting booksfocus on budgeting, Cost-Volume-Profit analysis,decision-making, and performance evaluation. The concept of “Balanced Scorecard” has beenintroduced recently as a powerful managerialtool. See hand-out.
• Balanced Scorecard and Social Responsibility: Management should integrate social responsibility into corporate strategy. Then expand the balanced scorecard to include social responsibility as one of the strategic objectives.
Stakeholders Theory for Corporate SocialResponsibility: Goodpaster (1991) indicated the insolubleconflict between the Fiduciary duty ofmanagement to shareholders and the moralobligation to run the companyethically. Theformer may lead to business without ethics,while the later may lead to ethics withoutbusiness.
However, the literature on stakeholders theoryhas not contrasted it with the shareholderstheory in that fashion. The literature suggeststhat stakeholders theory forces decision makersto reflect on the purpose of the company in abroader societal context. Management shouldconsider that business and society asintertwined. Helping society helps business togrow and that helps sustainability of society.
Managerial Accounting and The Concept ofStakeholders: Management are required to involvestakeholder’s claims into a business logic. Forexample: - Employee loyalty can be considered as anintangible asset. - Community support is invaluable successfactor. and so on.
Incorporating Corporate Responsibility intoCourse content.Cost-Volume-Profit Analysis: Accounting vs. Economic:The use of opportunity cost concept. The use of Economic Value Added concept. ( See hand-out)
- Budgeting and social responsibility.- Decision making and social responsibility.- Total quality Management and Social responsibility.- See Hand out.
Expansion of Course Learning Outcomes: Course learning outcomes has been expandedto include management role in corporate socialresponsibility. Performance evaluationmeasurements have been extended to includemeasurements of corporate contribution towardsustainable business and society.
Teaching Methodology: A Case study approach and simulation are usedto highlight the role of corporate socialresponsibility and its implication for corporatefinancial performance.