Impacts of Accounting Information on Management’s Decision-making –profit-oriented Vs Not-for-profit Organizations
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Date
2009-06
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Addis Ababa University
Abstract
In every organization decisions are regularly made as part of smoothening activities of
the organization and to achieve their objectives. Decision makers use different types of
information to make these valuable decisions. Accounting information is one of this
information that managers and other concerned bodies use when they make decisions.
The main purpose of this study is to assess the impact of accounting information in
management decision making in both profit-oriented and not-for-profit organizations.
General Managers, other higher level manager and accountants were included to gather
the necessary data pertaining to the assessment of the impact of accounting information.
To elicit the impact of accounting information on management decision making,
questionnaires were distributed to General Managers, Financial Managers, Marketing
Managers, Production Managers and Accountants who are thought to be influenced by
the information. All of them were selected by personal judgment of the research.
The results of the study showed that majority of managers are influenced by the
accounting information to the relevant range. In addition, the dedication of managers in
incorporating accounting information in their decision making was found to be weak.
The reason for this fact is that managers are not as such comfortable to make decisions
with the type of information being produced. They have doubts on the competency of
accountants. It is also found that accounting information is widely used in business
organizations especially in manufacturing organization as compared to not-for-profit
organizations.
In response of these findings, the researcher forwarded possible recommendations that
will enhance managers’ use of accounting information
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Keywords
Decision-Making, Profit-Oriented, Vs Not-for-Profit