MA information influencing decision-making

As the management accounting information clearly initiated the decision-making pro- cess, it also had its own remarkable impact during the process. In addition to the direct impact, the influence can also be indirect. For example, the following communication and teamwork between the participants, including financial department, is a form of indirect impact of MA information.

All the participants thought open communication was very important. While the controller and the financial department did the budgeting, the product development director argues it was critical that he/she and the head of product were participating in the process. They both brought data and their own point of views on the table.

‘[It was critical that] the head of product and I were participating in this process because we both brought data and views [on the table] and we believe in open

communication.’ – Product Development Director

Three out of four informants believe in teamwork, but the head of product slightly disa- grees with it. He/she believes that one good and experienced person should make the

initial budget and then senior management should give their input based on their expe- rience. The controller is fully behind the idea of teamwork and says that they made the budget as a team. The procurement manager, however, also believes in teamwork but thinks that currently they do not have a common goal, which is a contradiction.

‘[…] you normally have one guy which is good, has seen a lot, can put something together, and then you have the senior management coming in, because they have a different perspective. They talk to other people. They talk to industry. They have a bit more information that you would have. But and they can challenge and modify

assumptions.’ – Head of Product

‘[…] you have to really combine from different teams’ opinion, because we all work together. It’s like a team work. We can never just give some decision by our-

selves. It’s all like a team work.’ – Controller

‘I think this kind of company is like a [sports] team which shares a common goal. […] In this case, I have to say that we do not have it and it is a contradiction.’ –

Procurement Manager

The previously mentioned iterative budgeting process means that the parties discussed the numbers together many times. From the director’s perspective, it was important be-

cause they found several miscalculations that improved the overall quality of the budget.

‘The iteration process led to that we found many miscalculations made by everyone including me which improved the quality of the overall [budget].’ – Product De- velopment Director

The director expected knowledge of the products and offerings from the people in the financial department. These expectations were not fully met as sales of a new product were budgeted to start in January 2019 while the reality is in July 2019 at the earliest. The director thinks the reason was that the new people did not understand enough in order to be able to ask questions about different numbers. The calculations made by the financial department are sometimes too precise for the fact that they are based on gut feelings. The director says it means from the management perspective that they convert conjectures to data. In addition, the procurement manager appears to demand opera- tional knowledge from the financial department as different types of customer orders may look similar from the financial perspective but very different from the manufacturing per- spective.

‘There were many new people involved […] in financial and sales departments

who do not necessarily understand the products and concepts enough. For exam-

the reality is in July 2019 at the earliest. […] Maybe they should understand enough in order to be able to ask questions. Here they did not ask.’ – Product Development Director

‘Sometimes it bothers me that they make really precise calculations in the Finance

Department but do not think that it is based on nonsense. So, they convert gut feelings into data.’ – Product Development Director

‘Renewing orders [which do not require a new physical device] may make the financials look exactly the same but from manufacturing perspective it is totally

different.’ – Procurement Manager

The head of product argued that the sales department should not do the production fore- casts. Instead, the numbers should be asked from a person who has least incentives in it. According to the head of product’s experience, this applies to other industries as well.

‘[…] sales forecasts by salespeople are the worst forecasts that you can get. And I can tell you because I have been in sales as well, so I have been guilty of the same thing. – Head of Product

Therefore, it seems that the MA information had a role of knowledge integrator and it was a boundary object, as it got people together to discuss about different forecasting numbers and the assumptions behind them. Budgeting is a key element in the work of management accountants, so the MA information naturally had a big role in it. However, as the outcome was an official and unofficial forecasting numbers, I argue that with better usage of MA information, the outcome could have been just one number if the reasoning had been more solid.