Question

Managerial Accounting

In any organization, it is important that the three activities namely (i) partition of decision rights, (ii) measurement of performance, and (iii) reward of performance must be designed in sync to keep the organizational architecture or “three-legged stool” (Zimmerman, 2014) balanced. This will ensure that decision makers within an organisation have the relevant information to maximise firm value, as well as the incentives to use this information productively from the firm’s perspective.

Unfortunately, in reality, this is often not so. Mismatch among these three legs are common occurrences.

Required:
Select a company you are familiar with or one you are currently working in, or one with information publicly available. Using your own words as much as possible, and in not more than 2,000 words (in total):

(a) Describe the industry the chosen company is operating in, and an outline of the background, nature of business, the industry and the environment it is operating in, its products/services, etc. (5 marks)

(b) Choose one (1) functional area and describe what effective organizational architecture has been put in place by the company to maximise firm value. (15 marks)

(c) Describe any weaknesses of these existing systems. (15 marks)

(d) Suggest possible improvements that the company can adopt.(15 marks)

Answer 1

A. Agarwal Financial Services is one of the top 200 companies in Asia Pacific for BFSI. It's core area of operations being financial due diligence, valuations, mergers and acquisitions, portfolio management and risk based advisory.

Formed in 2003 with Singapore being the first office,, today it is a 2.5 lakh employee company serving more than 20 million multinational clients.

B. The company has a very experienced foot in the advisory segment among which audit and assurance bags roughly 78% of the revenue. For the increasing demand and varied client requirements, following are the key organisational architecture

1. Effective and firm agreement with all cleints

2. Best professional expert in place as per the clients requirements

3. Value addition to clients organisation i.e. beyond the desired advisory

4. Minimum disruption of client resources and maximum output of available resources

5. Knowledge updation for all employees on a daily and weekly basis

6. Boundary-less for the clients requirements and agility in framework

7. Documentation for all process and maintenance of all records

C. We face a regular updation challenge. As we deal with everyday changing regulations and updating norms, we need to be three first to be well versed with it. So somewhere this would help me in knowing the clients problem before he knows it himself. So delay in updation is a challenge

D. We have created a portal wherein various stake holders update their departments highlights. So everyone gets to know what is happening across cross verticals. Also the responsibility of knowledge sharing gets divided creating a limitless abyss of knowledge and learning