Summary
Responsibility accounting has a direct effect on the direction and outcomes of decision-making in the corporate environment. Therefore, studying how it influences a managerial action and how it can be utilized to improve decision-making in the organizational environment is critical. The study by Lennon (2019) seeks to research the correlation between the spatial context in which responsibility accounting is used and the effects thereof on corporate decision-making. Lennon (2019) explains that control over physical space increases the extent of responsibility accounting within an organization.
However, Lennon (2019) warns that, when failing to encompass the opportunities and threats that a particular physical space contains for a project, a manager is likely to face a rapid demise of a project or, at the very least, deal with numerous problems arising in the process. The dynamism of the physical environment suggests that managers should be able to connect multiple factors into a single entity in order to produce effective decisions and lead the organization to success. The inability to embrace the notion of dynamism of the corporate setting, in turn, leads to a drop in the extent of responsibility accounting levels in the organizational setting (Lennon, 2019).
Therefore, the author advises strongly focusing on the assessment of dynamic components of the workplace environment. Although guaranteeing an entirely fraudulence-free corporate setting is barely possible, the introduction of responsibility accounting based on the principles of decision rights mediation and similar strategies will help to reduce the threat of fraud in accounting. Thus, the problem of trust as the foundation on which relationships within an organization should be built is addressed appropriately.
However, Lennon (2019) warns that the problem of dynamism analysis has become much more complicated with the transfer of organizational processes from the traditional setting into the digital environment, where the notion of physical space no longer exists. Therefore, the concept of responsibility accounting needs to be altered to shape the calculative agency of accounting and promote effective performance in the target area (Lennon, 2019). By reconsidering the shareholder concerns in the digital environment and adjusting the principles of responsibility accounting respectively, one will be able to maintain corporate efficiency within a specific business setting.
Reaction
The article by Lennon (2019) has offered new and exciting insight into the notion of responsibility accounting. The transfer to the digital context, which most organizations have already experienced in the modern economic setting, makes the article especially important for contemporary businesses and their managers.
Therefore, the article can be used to emphasize the significance for businesses to transition from the spatial understanding of responsibility accounting to a more general and ubiquitous concept thereof, thus allowing every company employee and team member to build the required amount of loyalty toward the organization (El-Mousawi & Trabulsi, 2019). Moreover, the article provides a subtle commentary on the problem of corporate fraud as the outcome of a poorly established idea of responsibility accounting.
Finally, the issue of decision rights needs to be touched upon as an important aspect of organizational performance according to Lennon (2019). The article results can be used to introduce strategies for delegating decision-making in large companies, which may lead to a conflict of respective rights between managers and employees. Therefore, making decision rights looser while enhancing the importance of corporate ethics seems to be the most appropriate solution. Thus, the principles of responsibility accounting will be successfully implanted into the corporate context, whereas the issue of decision-making and the management of corporate issues will be addressed accordingly.
References
El-Mousawi, H., & Trabulsi, H. (2019). Potentials of applying social responsibility accounting in the banking sector in Lebanon: An empirical study. Journal of Finance and Accounting, 7(2), 32-39. Web.
Lennon, N. J. (2019). Responsibility accounting, managerial action and ‘a counter-ability’: Relating the physical and virtual spaces of decision-making. Scandinavian Journal of Management, 35(3), 1-13. Web.