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Globalisation is associated with the extensive mobility of products and services, information and people across national borders. It has existed for centuries but, fostered by advances in communications and travel technologies, for example, it has had a meteoric increase in recent decades.

For a long time, it has been assumed that globalisation has been a primary driver of changes in management accounting (MA) practices. But how much do we really understand about how and in what ways MA becomes implicated in the globalisation process?

Here are some examples:

  • MA practices are at the core of most organisation’s governance structures – e.g., reporting lines and accountability can be underpinned by such tools as budgeting, variance analysis and benchmarking
  • MA tools such as forecasts, customer profitability analysis and the balanced scorecard are amongst the inputs for (re-)designing and implementing an organisation’s strategies and forward plans
  • MA information, both final- and/or non-financial-oriented, is central to how a globalised organisation (e.g., a Multinational) both allocates responsibility amongst, and makes comparisons of performance, across different (subsidiary) units.

All in all, MA practices comprise and represent key mechanisms for aligning ‘localised’ (e.g., subsidiary, units) activities with globalised (e.g., head office, owners) strategies.

A good article to further explore how MA becomes implicated in the dynamics of globalisation is: C. Busco et al. (2008), ‘Managing the tensions in integrating global organisations: the role of performance management systems’, Management Accounting Research, 19, 103-25.