According to Johnson and Kaplan (1987: p.196), the following quotations were extracted from comments made by US chief executives (CEOs):

“The current trend towards high compensation rewards based on the immediate year’s performance rather than long range growth is a serious disincentive to management objectivity”.

“Amid today’s takeover scramble, short-term performance is needed for survival”.

Using your knowledge of theory learned during this module, you are required to write an essay that critically evaluates how management accounting techniques and systems can be used to help reconcile the conflict between the need for long-term performance with the desire for short-term results.

In writing your essay, you should also explore whether these CEO quotations remain equally relevant to the current business environment, and the extent to which management accounting has developed in its recent history to help managers resolve the dilemma of these competing perspectives.

Johnson, H.T. & Kaplan, R.S. (1987) Relevance lost: the rise and fall of management accounting. Boston: Harvard Business School Press.

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