Management Accounting & Management of Change

I am very relieved to say that last week I finished all the content for both Management Accounting and Management of Change modules. They both seemed quite long, but I think this was because of the lack of a Warwick Week this semester, and also because there is a significant amount of content to cover in them both. However, the topics have been very interesting, and some of them directly relevant to both my current role as well as my long-term career aspirations. Here’s a quick summary of the key concepts that I’ve learned over the last few months.

Management Accounting

As I mentioned in a previous post, the module started by looking at how costing is assessed within an organisation. Although on the surface this seems quite a straightforward concept, this module exposed the complexities involved when looking at costs to make both short-term and long-term decisions. We also explored the concept of Activity Based Costing, which is a seemingly obvious concept with the potential to more accurately understand the cost of delivering a product or service; however, it clearly requires a bigger investment in time (and  systems) to put in place. Following this we moved onto pricing, which as expected has some overlap with both the Marketing and Economics modules; this included a very interesting presentation relating to the pricing models used for the iPhone, cheap flights, vehicles and mobile phone tariffs.

The second half of the module started with capital investment appraisal, which is very relevant given that part of my role at work involves building business cases to feed into these activities. Following this we looked at the process of producing budgets, including using budgets for controlling a business and performing variance analysis. Although this is not a concept that I have been actively involved in during my career, I have no doubt I will be exposed to them at some point in the future.

The last major topic of the module was relating to how large companies are split up into divisions, and how performance management takes place in this environment. We also looked at transfer pricing (the price at which goods/services are charged between different divisions in the same company/group) – I was surprised at how complex this topic was, and it was interesting to see the overlap with organisational behaviour when looking at how transfer pricing and performance measurement can affect how employees behave. The module closed with a look at current issues in management accounting, including ‘customer accounting’ – this looks at how the profitability of individual customers can be identified.

That’s the lessons completed now for Management Accounting, the final activity is the assignment. When the assignment title was submitted a number of students (myself included) were a bit apprehensive because it needs us to reference techniques used in our place of work, which I expected would be quite difficult given that I work for a very large US-based company. However, with assistance from a colleague I have identified a very interesting area that I can write about, and it has been insightful to see how some of the concepts we have learned on the course, apply (or don’t apply) to real-life processes.

Management of Change

This was a module that I was particularly looking forward to studying for, as I see lots of change in my industry, the company I work for, and at the customers I work with. I wrote in an earlier post that the start of this module introduced us to the meaning of change, followed by a look at change at an individual level and resistance to change. The module then went on to look at the concept of Images of Change. This is very abstract, but I found it really helpful in framing how change is being implemented. For example, is change driven by a desire to improve economic value (Theory E), or with the intention of improving the capabilities of the individuals working for the organisation (Theory O), and how does this impact how the change is implemented and received? If you’re interested you can read the full article here. There is also the idea that people who lead change fit into one of 6 categories; the insights surrounding each of these were fascinating (although I realise that it may not appear so just reading my blog!)

  • Managing by Control – Director, Navigator or Caretaker
  • Managing by Shaping – Coach, Interpreter or Nurturer

We then went on to look at some of the models by which change is implemented. This is the part of ‘change management’ that I originally expected the course to spend most of the time looking at (ie. the different methodologies to follow when leading change), so I was surprised that there was only one lesson to look at this. However, there is a really good whitepaper from Kotter, who developed the famous 8-Step Process for Leading Change, that provides some reasons why change efforts often fail (see here). This is a must read for anyone considering implementing a major change program!

The next lesson looked at the impact of power, politics and resistance during change, which provides some useful lessons for how to deal with these, and then a look at how language and discussion factor into the change process. We were also introduced to the concept of sense making – the process that people follow when trying to understand a change, and how change managers can help the recipients of change do this effectively.

The next two lessons analysed the role of the leader and middle manager in implementing change. There were some interesting examples of leaders shared, ranging from Martin Luther King’s “I have a dream” speech, to an example shared by a student of the lone dancer – quite amusing, and visually highlights the role of leaders as well as those who follow them.

The module ended with a lesson focussed on Vision – looking at both how to create a successful vision, as well as why visions fail. It also looked at how vision links to change, and asks whether Vision causes Change, or whether Vision emerges from Change?

Overall, this was a really interesting module, and if I ever have the opportunity to lead a large change programme I’ll definitely be looking back and attempting to leverage some of the concepts taught here.

Like Management Accounting, I am now in the middle of my assignment, which is also related to the organisation I work for and so proving very interesting. I’m hoping to finish these over the next few days, as next week I will be returning to the University of Warwick to study my face-to-face module, Complexity, Management and Network Thinking – which will probably be the topic of my next blog post.


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