I believe that if you are not doing this type of thing, you are losing a lot of job potential down the road. As a matter of fact, I believe that by educating yourself in this type of broad theory research method, you are preparing for a much more lucrative career in business management. After all, it takes smart people to make smart business decisions. In other words, smart business decisions require smart theory research. Okay, so, what do I mean by that?
For instance, take a business case study. Most managers will take an assignment or a problem in one functional area and then look at the results of that in another area. That is okay if you only look at data from one functional area, but what about when you take the whole company under consideration? For example, what about the products or services that you sell or provide to your customers, clients, and employees? If you take the whole company under consideration, you will end up with a lot of data that you will have to sort through in order to make sense of it and make sound business decisions.
The best way to sort through that data is to take the whole company into account. In theory, this should make things easier for you because you will be able to form an opinion or a decision based upon the facts and the figures that you see. However, it can take some time for theory research to pay off. After all, in most businesses there are a great deal of inter-personal interaction as well as organizational theory to consider.
Why, then, does managerial accounting get so much theory research done? The answer is simple. Most businesses are small, tight-knit family businesses. The theory behind managerial accounting is that the size of the family in a business affects the performance of that business. Small family businesses are usually home based businesses, which mean that there is not a huge difference between the performance of the business and the performance of each member of the family. Therefore, theory typically focuses on the larger picture in order to make conclusions about the family unit as a whole.
Managerial accounting has a lot of theory research built into it. If you take a look at the titles of the Theory journals and articles, you will see that most of them center around leadership, management, decision making, financial accounting, or organization behavior. This all sounds good, but do these concepts really apply to every business? Most definitely not. So how does a budding accountant take theory research and use it to develop relevant managerial behavior?
The answer is with lots of practice. Practicing theory research every single day takes a great deal of self-discipline. It also requires that you constantly question your own assumptions and be willing to change them when necessary. These changes do not come easy because changing your beliefs or assumptions will require some tough love, but it is essential if you want to succeed as a professional.
When theory research is used in managerial accounting, it is not unusual to find some very odd things. For instance, one popular theory discusses the idea that small organizations are better at risk of bankruptcy because they have shorter windows of opportunity to experience financial problems. In other words, small organizations are more vulnerable to short-term financial problems, which is why their leaders tend to “sponge” off the system the whole time. Of course, if you read this research into the fine print you will see that the author is basically arguing against the very concept of managerial accounting itself!