MANAGEMENT ACCOUNTING AS AN INDISPENSABLE TOOL IN THE MANAGEMENT OF AN ORGANIZATION (A CASE STUDY OF NIPOST ORGANIZATION)
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MANAGEMENT ACCOUNTING
AS AN INDISPENSABLE TOOL IN THE MANAGEMENT OF AN ORGANIZATION
(A
CASE STUDY OF NIPOST ORGANIZATION)
ABSTRACT
This research topic”
management Accounting as an indispensable tool in the management of an
organization” helped us to research into how NIPOST organization has adapted
management Accounting techniques to achieve increased efficiency in its postal
services to the nation. This is because in recent time, modern management is
interested in not only” knowing the cost of production” but also in “
Controlling the costs of production”.
Management Accounting
is, therefore, primarily concerned with data gathering (from internal and
external sources) analyzing, process, interpreting, and communicating the
resulting information for use within the organization so that management can
more effectively plan, make decisions and control operations.
This research work
tried to find answers to the follow research questions.
1.
How has management Accounting affected the achievement of NIPOST corporate
goal?
2.
Can NIPOST organization operate effectively without the service of management
Accounting unit?
3.
How has management Accounting affected the decision making process of NIPOST
management?
4.
Do you think that management Accounting unit has helped the management of
NIOPST to attain Maximum efficiency in its planning process?
5.
Do you think that management Accounting is an indispensable tool in the
management of NIPOST organization?
In conducting this
research work, the researcher, arranged his work in five chapters.
Chapter one, dealt
with the introduction of the topic, which include background of the problem
under study, statement of the problem, objective and significance of the
study.
Chapter two took care
of literature review. This chapter tried to define management accounting and
its scope as regards to other branches of accounting. It also threw more
light on the objective of management accounting, functions of management
accounting, advantages of management accounting as well as the tools and
techniques of management Accounting.
Furthermore, chapter
three dealt on the research design and methodology adopted in this work. In
conducting this research work, the researcher used both primary and secondary
data. Primary data were collected through interviews, observations and the
administration of questionnaire to interned respondents. Secondary data were
also collected from textbooks, NIPOST Journals and Magazines
Chapter four treated
the analysis and interpretation of data collected through the administration of
questionnaire and a percentage analysis was used to interpreter the responses.
Also, the researcher used chi-square method for testing the hypothesis.
Finally, chapter five highlighted on the research finding, recommendation and
conclusion.
LIST
OF TABLE
Table 1- Number of years of service of
respondents
Table
2- Analysis of whether NIOPST has a management Accounting unit.
Table
3 – Analysis of whether management Accounting is an indispensable tool in the
management of NIPOST organization.
Table
4 – Analysis of whether the organizational structure of NIPOST allows the
management Accountings to play their required role…………………………
Table
5 - Analysis of how management Accounting has affected the achievement of
NIPOST corporate goal……………………….
Table
6 – Analysis of whether NIPOST organization can operate efficiently without the
service of management Accounting unit.
Table
7 – Analysis of how management Accounting has affected the decision making
process of NIPOST organization
Table
8- Analysis of whether management Accounting unit has helped NIPOST management
to attain maximum efficiency in its planning process…………
Table
9- Analysis of whether NIPOST organizations seek the professional advice of
their management Accountants before increasing the prices of their products and
service.
Table
10 – Analysis of whether management Accountants advice to NIPOST management
enhanced greater productivity. …………….
Table
11 – Analysis of whether NIPOST organization allows management Accountants to
participate in budgeting and budgetary control…………….
Table
12 and 13 – Test of hypothesis.
TABLE
OF CONTENT
CHAPTER ONE
INTRODUCTION
1.1
Historical background of NIPOST
1.2
Statement of problem
1.3
Objective of study
1.4
Significance of study
1.5
The scope and limitation of study
1.6
Research Questions
1.7
Statement of Hypothesis
1.8
Definition of terms
CHAPTER TWO
LITERATURE REVIEW
2.1
Definition of management Accounting
2.2
Scope of management Accounting
2.3
Objective of management Accounting
2.4
Distinctions between management Accounting and Financial Accounting
2.5
Distinctions between management Accounting and cost Accounting
2.6
Functions of management Accounting
2.7
Tools and techniques of management Accounting
2.8
Advantage of management Accounting
2.9
Importance of management Accounting
CHAPTER THREE
RESEARCH DESIGN AND METHODOLGY
3.1
Sources of data
3.2
Determination of sample size
3.3
Determination of sample technique
3.4
Method of data collection
3.5
Description of instruments used
3.6
Method of Data analysis
CHAPTER FOUR
ANALYSIS AND INTERPRETATION OF DATA
4.1
Data presentation analysis and interpretation
4.2
Test of hypothesis
CHAPTER FIVE
RESEARCH FINDINGS, RECOMMEDATION AND
CONCLUSION
Summary of findings
Recommendations
Conclusion
Bibliography
Appendices
i.
Cover letter to the questionnaire
ii.
Questionnaire.
CHAPTER ONE
INTRODUCTION
Management is essentially concerned with planning and control of the resources
of a firm, with a view to the attainment of set objectives. Planning is
concerned with listing of goals and the formulation of a decision model for
selecting means of achieving those goals. Control on the other hand, is the
regulation of the activities within an organization so that they are in
conformity with expectations established ion policies, plans and targets.
Furthermore, crucial to the planning and control decisions of management, is
information. Good decisions are based on information that is timely, relevant,
properly presented, problem solving and forward looking. And here comes the
challenge for the management Accountant to provide information for the planning
and control of costs, volume and profit, for the purpose of attaining goals o
management.
Management Accounting, therefore, is concerned with the application of
accounting and statistical techniques to the specific purpose of providing and
interpreting information designed to assist management in its function of
promoting maximum efficiency.
Management Accounting focuses on the internal environment of business, and
provides information for such decisions of the firm as make or buy,
replacement, pricing and cost reduction decisions.
We should note, that today, life has become complex both for individuals and
management could take decisions by “ bit “ or “miss” methods or by “ mere
guess” so if any management does not plan on a systematic basis, it will be
branded logic of little or no profits. Hence modern management, for its vital
task of planning, should rely more on management accounting. Management
Accounting has shifted managerial emphasis form “ Knowing costs of production
is the very reason that makes management Accounting to be referred to as “an
indispensable tool in the management of an organization”.
According to “ T. Lucey, (1988:1) management Accounting is primarily concerned
with data gathering (from internal and external sources) analyzing, processing,
interpreting and communicating the resulting information for use within the
organization so that management can more effectively plan, make decisions and
control operations.
1.1
HISTORICAL BACKGROUND OF INPOST
The origin of
Nigerian postal service (NIPOST) dates back to 1851 when the British postmaster
General established a postal (PWD), in Lagos public works department office,
primarily to officials and traders and their home base ”Chimezie, 1985:19)2
This assertion was supported by Baba (1998:1)3 who postulated that
the first letter ever carried from the first ever post office in Nigeria was in
1851 and was by foot and horses into the hinterland.
The postal service in
Nigeria was first re-structured in 1907 when from public works department of
ministry of works to form post and telegraphs, the structure it maintained up
till Nigeria became independent in 1960.
With Nigeria’s,
independence in 1960 and her postal Administration becoming a sovereign member
of the Universal postal Union (UPU) in 1961, the post in Nigeria has witnessed
phenomenal growth in strength and spread with a total of over 4,500 (four
thousand five hundred) postal establishments in the country today. And this
number is increasing.
The universal post
Union is the organization which embraces nearly all the postal administration
in the would and it is one of the specialized agencies of the united nationals.
For this reason, the historical origin of Nigerian postal service cannot
therefore be compete without citing when it jointed the Universal postal union
(UPU) which is the mother association of global administration.
The postal service in
Nigeria was further re-structured on 1st January 1985 when the defunct
post and telecommunications, was split into two organizations. Nigerian
External telecommunication (NET) and the Telecommunications division of the
P& T were merged to form the Nigerian Telecommunications limited (NITEL)
while the postal division of P & T became reconstituted into an extra
ministerial department to be known as Nigeria postal service department
(NIPOST), all still under the ministry of communication. Ayuba (1986: 7) 4
On Ist
July, 1992) Nigeria postal service department was finally re-organized and
re-structured to the present status of a corporation following the granting of
full autonomy by the federal government for higher efficiency and
effectiveness, and by virtue of decree N0.41 of 1991, published in the federal
Republic of Nigeria official Gazettee No.57, Vol .79 of 14th
October, 1992 5 which spelt out the objective and functions of
NIPOST. By this development, the acronym” NIPOST” now means “Nigerian postal
service department “ that it was before the autonomous status.
PRIMARY
RESPONSIBILITY OF NIPOST
“The primary responsibility of NIPOST as established by the decree No.18 of
1987”6 were to deal with postal, professional and policy issues as:
a.
To represent the Federal republic of Nigeria in its relations with other postal
administration around the world in accordance with international regulations.
b.
Exploration of additional sources for postal revenue.
c.
Review of postal tariff.
d.
Worldwide provision of highly dependable postal link between and among member
nations of the Universal postal union without discrimination to race, creed and
sex.
e.
Provision of efficient counter and remittance services in the sales
of postage stamps, sales of money and postal orders, sales of international
postal reply coupon and post office registered envelope.
ORGANIZATIONAL
STRUCTURE OF NIPOST
The organizational structure of NIPOST is made up of the postmaster general of
the federation at the apex. Directly under him are five-deputy postmaster
general as follows:
1.
DPMG Corporate service
2.
DPMG Operations Planning
3.
DPMG Finance and Investment
4.
DPMG Territorial Administration
5.
DPMG Engineering and Technical service.
There are also unit heads called the senior Assistant postmaster generals
(SAPMG) who also report direct to the postmaster general. They are as
following:
1.
SAPMG In charge of
internal Audit
2.
SAPMG In charge of
Investigation and security
3.
SAPMG in charge Public
Relations.
4.
SAPMG in charge of Legal
unit
5.
SAPMG In charge of
Corporate Planning
6.
SAPMG In charge of
marketing
7
SAPMG In charge of management Information System
NIGERIA POSTAL
SERVICE: ORGANIZATIONAL CHART.
1.2
STATEMENT OF THE PROBLEM
There is increasing evidence today, that most failure in management is
attributed to failure to plan for the future. Today, an economic activity are
so complex and delivers. The market is wide and competition is cutthroat. For
this reason, mere ascertainment of cost is of little use. In recent time,
modern management is interested in not only “ Knowing” the costs of production
but also in “ controlling” the position to know the cost of production or
services rendered, that they can equally determine the expected management can
actually know whether it is performing according to plans and standards set.
Moreover, this problem of determining the cost of production and being in
position to control the costs gave birth to management Accounting. Over the
years, management Accounting has developed as an internal administration aid to
business management and its techniques is quite different from the conventional
system of recording and classifying the business transactions through double
entry system of accounting.
The problem then is how NIPOST organization can adapt to management Accounting
techniques to achieve increased efficiency in its postal services to the
nation. This research work will also try to answer the question,” How does
NIPOST organization use management Accounting as an indispensable tool in the
management of its human and material resources.
1.3
OBJECTIVE OF THE STUDY
The objective of this
study is to examine the degree and nature of effects management Accounting has
on the achievement of the corporate goal or objective of NIPOST, which is “ To
provide Universal qualities postal service that is efficient, effective,
reliable and affordable with a committed workforce tat guarantees customer
satisfaction at all time”7 .
The researcher
also intends to investigate the level of attention given to management
Accounting unit of NIPOST organization by the top management cadre and the
degree of importance they attach to information generated from the management
Accounting unit of the Accounting department.
This study will
equally help the researcher to determine whether management accounting
techniques and information given to management has affected positively or
negatively the growth of NIPOST organization.
1.4
SIGNIFICATION OF STUDY
This study is significant in the sense that it will take a look at management
Accounting which has a wider scope than nay other system of accounting like
financial accounting and cost accounting.
It is hoped that through this study, some good contributions would be made to
the existing stock of knowledge in this field.
The study will also act as a guide to top management of big organizations
like NIPOST and policy makes on the importance of management accounting in
decision making.
1.5
RESEARCH QUESTION
This research work will try to find answers to the following questions.
1.
How has management accounting affected the achievement of NIPOST corporate
goal?
2.
Can NIPOST organization operate effectively without the service of
management accounting unit?
3.
How has management Accounting affected the decision making process of NIPOST
management?
4.
Do you think that management accounting is an indispensable tool in the
management of NIPOST organization?
1.6
STATEMENT OF HYPOTHESIS
In other to carry out this study properly hypothesis will be empirically tested
using research questions numbers 4 and 5 above as follows:
A.
Hoi: management Accounting is not an indispensable tool in the management of
NIPOST organization.
Hi: management accounting is an indispensable tool in the management of
NIPOST organization.
B.
HO2: management accounting unit has not helped the management of
NIOPST to attain maximum efficiency in its planning process.
H!2: management accounting unit has helped the management of NIOPST
to attain maximum efficiency in its planning process.
1.7
DEFINITION TERMS
The terms used in this research work is defined to suit the concepts adopted in
this study.
1.
NIOPST: this abbreviation means Nigeria postal service.
2.
UPU: This means universal postal Union. This is the Umbrella
organization for all the postal administrations world-wise.
3.
P & T: This means postal and telecommunications. This body was split
into NIOPST and NITEL in 1985.
4.
RESPONDENT PHOBIA ATTITUDE: This means the fear of revealing
confidential information or official secrets in the process of answering the
questionnaire given to the respondents.
5.
ORANIZATIONAL CHART: A device used to portray or represent the
organizational structure in a diagrammatic form.
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