Academic journal article Academy of Accounting and Financial Studies Journal

Achieving Competitive Advantage in Departments of Accounting: Management Principles and the Balanced Scorecard

Academic journal article Academy of Accounting and Financial Studies Journal

Achieving Competitive Advantage in Departments of Accounting: Management Principles and the Balanced Scorecard

Article excerpt


This paper presents and discusses a series of principles for managing departments of accounting. We categorize these principles as guiding, resource management, and performance measurement, and combine them with the balanced scorecard to provide a framework for planning, managing, and evaluating individual and departmental performance. The framework is useful to department chairs and faculty for developing policies and practices designed to promote an integrative approach to the primary concerns of teaching, research, service, and development. In addition, this framework promotes managing departments as a portfolio of assets instead of discrete resources and directs the attention of department chairs and faculty to consider potential areas of strategic advantage.


The purpose of this paper is to present and discuss a series of management principles and application of the balanced scorecard for managing academic departments of accounting. These principles, when combined with a balanced scorecard approach to performance measurement, provide a framework that links teaching, research, service, and development activities. If successfully employed, this approach may lead an accounting department to achieve competitive advantage in efforts to attract students, faculty, and external support.

Several important factors make departments of accounting successful. To begin with, successful efforts to respond to the demands placed on academic departments of accounting lie in part to good management, leadership, and planning. Also important are a clear understanding of the department's competitive environment, sources of particular strength and weakness, and the value of collaboration, patience, and persistence. Frequently overlooked in the planning process are efforts to link the department's primary missions in teaching, research, and service and development activities. Success in integrating these efforts leads to efficiency, higher levels of productivity, and successful relationships with constituents.

Academic organizations often neglect the development of management skills and capabilities. For many years higher education operated in a relatively stable environment that changed slowly at a pace determined by faculty. Many individuals inside and outside of academia consider that higher education either does not change or only changes very slowly. However, we live in a world where demands for organizations to be lean, nimble, and relevant are greater than ever before. This may tempt some academic leaders to push the rate of change, which can produce disastrous results if faculty are not ready. Yet departments that fail to respond to emerging areas of knowledge, demographic changes in student populations, technological developments, demands by employers, and other societal expectations may endanger their future or squander potential sources of competitive advantage.

Many individuals have written numerous articles about strategic planning and leadership in academic institutions (Edge 2004; Villano 2004; Hoppe and Speck 2003). Other papers focus on management and planning at the college or department level (Hesel 2004; Settoon and Wyld 2004; Karentz-Andrews 2001; Fountoukidis et al. 1995). This group of articles addresses the need to plan and the processes necessary to generate successful plans. Other authors are concerned with planning for a narrow aspect of departmental operations such as development, curriculum, or research (Rooney et al. 1999; Epper 1998; Sark et al. 1997; Worth 1993; Campbell and Flynn 1990). However, these works make no attempt to treat the principal efforts of academic units in a cohesive manner.

We organized this paper into five major sections. In section one we discuss the changing academic environment for accounting departments and the need to plan. Section two outlines important concerns common to accounting departments and presents reasons why leaders should focus on formulating management strategies that help support departmental efforts to meet demands from their customers. …

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