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20.8 Recent years have brought an explosive growth in electronic communication. Laptops,
netbooks, e-readers, personal digital assistants, sophisticated cell phones, fax machines,
e-mail, teleconferencing, office productivity software, and sophisticated management
information systems have changed the way information is received, processed, and
transmitted. With the decreasing costs of computer equipment and the increasing power of
automation, the full impact of computerization has yet to be felt. Although the development of
computer applications is directed at being user friendly or user oriented, the integration of
computers into the organization has had both positive and negative effects on employees.
Adapted from the CMA Examination
a.Describe the benefits companies and employees receive from electronic communications.
Greater optimization of organizational resources, increasing productivity and profitability.
a. Discuss the organizational impact of introducing new electronic communication
systems.
The initial cost of some electronic communication systems is a major capital purchase,
b. Explain
1. Why an employee might resist the introduction of electronic communication systems
They may fear and resist change. This may include the fear that they will be replaced
2. The steps an organization can take to alleviate this resistance.
Communication of information as to why the system is being implemented and how
20.9 PWR manufactures precision nozzles for fire hoses. Ronald Paige, an engineer, started the
corporation and it has experienced steady growth. Reporting to Ronald are six vice presidents
representing marketing, production, research and development, information services, finance, and
human resources. The information services department was established last year when PWR began
developing a new information system consisting of a server connected to each employee’s personal
computer. The PCs can download and upload data to the server. PWR is still designing and
developing applications for its new system. Ronald received a letter from the external auditor and
called a meeting with his vice presidents to review the recommendation that PWR form an
information systems steering committee.
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Accounting Information Systems
Adapted from the CMA Examination
a. Explain why the auditors would recommend an information systems steering committee
and discuss its specific responsibilities. What advantages can the committee offer PWR?
What advantages can such a steering committee offer PWR?
1. Because information systems span functional and divisional boundaries, organizations establish an
executive level steering committee so that the company, from an overall organizational perspective,
focuses on:
2. Specific steering committee responsibilities include:
Developing a master plan to strategically develop and maintain the company’s
information system, incorporating short-term and long-term goals.
3.The advantages of an information systems steering committee include:
b. Identify the PWR managers most likely to serve on the committee.
The six vice-presidents or their representatives.
20.10 Businesses often modify or replace their financial information system to keep pace with
their growth and take advantage of improved IT. This requires a substantial time and resource
commitment. When an organization changes its AIS, a systems analysis takes place. Adapted from
the CMA exam
a. Explain the purpose and reasons for surveying an organization’s existing system.
To gain an understanding of the existing system and how it functions.
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b. Explain the activities commonly performed during systems analysis.
Initial Investigation
Verify the nature of the problem and the needs of the users.
Gather the information needed to evaluate the feasibility of the request.
Systems Survey
Study and review the existing organizational structure to determine how it functions.
Information Needs and System Requirements
Define and document the information needs of the users.
Systems Analysis Report
c. Systems analysis is often performed by a project team composed of a systems analyst, a
management accountant, and other knowledgeable and helpful people. What is the management
accountant’s role in systems analysis?
Most systems analysis work is performed by systems people. However, the management
accountant is an important part of the development team and would be of assistance in
providing information about various aspects of the system, including:
Management’s needs for required reports and their format.
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redesigned system.
20.11 Don Richardson, JEM Corporation’s vice president of marketing, is part of a management
team that for several months has been discussing plans to develop a new line of business.
Rumors about the major organizational changes that may be required to implement the
strategic plan have been circulating for months.
Several employees who are anxious about the expected changes confronted Don. The sales
manager said, “It is imperative that we speak to you right away. The employees are very
apprehensive about the proposed changes, and their job performance has slacked off.” The
accounting manager added, “That’s right. My staff are asking me all sorts of questions about
this new line of business, and I don’t have any answers for them. They’re not buying the ‘We
will make an official announcement soon’ line any longer. I suspect that some of them are
already looking for jobs in case the department changes phase out their positions.”
Implementing organizational change is one of the most demanding assignments an executive
faces. It has been suggested that every change requires three steps: unfreezing the current
situation, implementing the change, and refreezing the effected change. This view, however,
lacks the specific details needed by an operating manager who must initiate the change.
Adapted from the CMA Examination
a. Explain why employees resist organizational change.
Uncertainty and fear. Employees become anxious and nervous when they fear the
unknown. They worry about losing their jobs and their ability to meet new job
requirements. If they do not understand the change or its implications or mistrust those
initiating the change, there is even more uncertainty and fear of the unknown.
No perceived need. Employees may not perceive the need for change, preferring to
maintain the status quo. Many people believe that what has proven successful in the past
will be satisfactory for the future.
Lack of time. Employees may not have or may be unwilling to expend the time and effort
required to learn how to use the new system with its attendant new procedures.
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Disruptive nature of the change process. Requests for information and interviews are
disruptive of the normal routine and place additional burdens on people.
b. Discuss ways JEM Corporation can alleviate employee resistance to change.
Employee participation. Encourage employees to participate in the change planning and
Keep the lines of communication open. Inform managers and users of systems changes as
soon as possible. Clear and frequent communication about the need for change and the
expected results of the change will alleviate employee fears. The company should listen to
employee grievances and help to resolve problems.
Get management support. Top management should make it clear that they fully support
the system and everyone else to do so. When management is supportive of the changes,
employees are more willing to accept the change.
Allay fears. To the degree possible, management should provide assurances that there will
Sell the system but control user expectations. Emphasize that the system may provide
Properly test the system prior to implementation to minimize initial bad impressions.
Avoid emotionalism and threats. When logic vies with emotion, logic loses. Threatening
20.12 Remnants, Inc., with headquarters in St. Louis, manufactures designer clothing. The company
markets and services its products by region, with each functioning as a profit center. Each region has a
manager, an accounting department, a human resources department, and several area offices to market and
service the products. Each area office has sales, service, and administrative departments whose managers
report to an area manager.
The New York area office departed from the standard organizational structure by establishing a
branch office to market and service the firm’s products in Boston. A branch manager who reports
directly to the New York area manager heads the local office.
The Boston branch manager is encouraging the New York area manager to consider a new
information system to handle the local branch’s growing information needs. The NewYork area
manager and the eastern region manager want to establish a project team with employees from the
region, area, and branch office. The team will assess the information needs at the Boston branch
office and develop system recommendations. The following employees have been appointed to the
project team, with Keith Nash as chairperson:
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Eastern Region OfficeKurt Johnson, Budget Supervisor
Boston BranchHeidi Meyer, Branch and Sales Manager
a. Project team members contribute their skills to help accomplish a given objective.
Characteristics of group members can influence the functioning and effectiveness of a
project team. Identify some of these characteristics.
Personality. Aggressive employees often influence a task force by their nature, directing
Position and influence. A project team with different levels of management may find
Skills. Group members who possess IS skills often use their knowledge to influence
b. Due to the team’s composition, what sources of conflict can you see arising among its
members? Do you think the group will succeed in its objective to develop an
information system for the Boston branch office? Why or why not?
Conflicts among offices. Regional officers may be at odds with local managers
Conflicts along divisional lines. Such conflicts result as local offices battle for a fair
share of a company’s limited resources. With the number of people on the team from the
Boston Branch, decisions made may favor that branch over the other offices.
Conflicts along functional lines. When assessing a company’s needs, priority is often
c. What contribution would a person who holds a position as budget supervisor make in a
project team such as this one?
The budget supervisor can contribute insight concerning the amount of funds available for the
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