Environmental Uncertainty on Strategic Management Accounting Applications

Abstract

           This article is primarily concerned with the roles of environmental uncertainty of industrial operations on strategic management accounting applications. Environmental uncertainty is one of variables of contingency theory. Management needs to continously assess environmental uncertainty throughtout its business operating cycle. It also enables firms to orientate and response to changing business environment for survival and growth, including the desining of strategic management accounting as a vital tool of resource allocation to maximize firm efficiency and effectiveness. Indicators of environmental uncertainty consist of competition, customer needs, technology, and society and politics; whereas, indicators of strategic management accounting include strategic cost management, management accounting for strategic planning, controlling and performance evaluation, and management accounting for strategic decision making.