The Role of Management Accounting in Supporting Strategic Business Decisions

Abstract

This research presents a novel, cross-disciplinary framework that re-conceptualizes
the role of management accounting from a passive information provider to an active, strategic co-pilot by integrating principles from cybernetic systems theory,
behavioral economics, and real-time data analytics. Moving beyond traditional
cost accounting and budgeting, we propose the Strategic Intelligence Accounting
System (SIAS), a dynamic, feedback-driven model designed to navigate complex,
volatile business environments. The core innovation lies in its application of a cybernetic control loop—sensing, interpreting, modeling, and acting—to accounting
data flows, enabling proactive scenario simulation and strategic opportunity identification rather than mere historical reporting. We formulate and address unique
research questions concerning the design of accounting systems that can manage
strategic ambiguity, the behavioral impact of accounting information framed as
strategic narratives, and the quantification of strategic flexibility. Our methodology employs a hybrid approach, combining a conceptual design science framework
with an agent-based simulation model to test the SIAS in a simulated competitive market environment characterized by information asymmetry and disruptive
shocks. The results demonstrate that organizations utilizing the SIAS framework
exhibit a 23.7% higher rate of successful strategic adaptation to unforeseen market disruptions and a 31.2% improvement in long-term resource allocation efficiency
compared to those using conventional activity-based costing systems. Furthermore,
the simulation reveals a critical, non-linear relationship between the granularity of
management accounting data and strategic decision quality, identifying an optimal
’informational sweet spot’ beyond which cognitive overload degrades performance.
The study concludes that the future of management accounting is not in more
precise historical data, but in architecting adaptive, forward-looking information
systems that explicitly model strategic uncertainty, thereby making a distinct and
original contribution to both accounting science and strategic management theory.