Question

4. In your opinion, is the human resource function, or the management accounting function, more important to the competitive advantage of the contemporary firm? You should use evidence and examples to justify your arguments.

Answer 1

A contemporary firm is opposite to the traditional firm in which more focus is paid t teamwork and employee engagement in decision making.  Human resource function is more important to the competitive advantage of the contemporary firm. The reason being, in human n resource function, more stress is laid on employee recruitment, placement, training, and development so that they can contribute their efforts and skills to te organizational success. In a contemporary firm, the management involves employees in decision making and considers them as an important part of the organization as well. there is no rigid to-to-bottom hierarchical structure that is in a traditional firm. Which is why human resource functions are more important for gaining a competitive advantage.

On the other, management accounting function concentrates on passing on information to the managers by the top executives, and the only focus is on earning a profit, rather than employee development. But in the contemporary firm, employees are the main consideration which is why human resource function is of utmost importance for gaining a competitive advantage.

For example, A team leader arranges a brain-storming session to encourage ideas to form all the employees so that an effective and innovative solution can be drawn. In this way, the most effective decision ca be chosen among the rest.

Evidences show that management accounting focuses on profits, earning and helps the managers to take a decision for the future. there is no involvement of employees at all in the management accounting function. For a contemporary firm, there is a need to involve employees in every business aspect and decision for development and gaining a competitive advantage.