Analysis of Performance From a Managerial Accounting Perspective

Introduction

An organization's economic activity can be analyzed and diagnosed, and current approaches and techniques for assessing performance should be used, because accounting information is the primary source of support for the value creation indicators (Stettina & Hörz, 2015). The connection of an organization's ability to adapt to an environment is the major aim of the ongoing process of experimentation and adaptation known as organizational change management (Chan, Shaffer & Snape, 2004).

One aspect of great importance to the existence, perpetuation and rise or fall of companies in the economy of any country is their contribution to creating new value, or, in other words, the value added in order to be more relevant, needs to be examined closely, along with the number of employees (Alhyari et al., 2013).

Entity risk management is to equip management with the tools necessary to recognize the element of uncertainty pertaining to the accomplishment of the goals set and the risk involved, as well as the chance to expand the capacity to add value, deliver more effective, economical, and efficient services, and uphold value accounts like equality and justice (Fisher, 2010). In a negative sense, the risk can be understood as uncertainty, threat, or obstacle; in a good sense, it can be understood as an opportunity.

Accounting, the basic tool for knowledge, management, and control of patrimony and the results obtained by economic entities, is the only source capable of providing accounting information of informational value to the leadership of entities under pressure to adapt strategic decisions to economic uncertainty (Arsenault & Faerman, 2014). Consequently, the attention of entity leadership is increasingly oriented towards the creation of an organizational culture orientated towards excellence and performance, and the crystallization of components that define and contribute to the formation of such an environment - Performance Indicators/ KPI's (Agha et al., 2012).

Around the middle of the nineteenth century, the word “performance” had its first appearance in written works (Becker & Huselid, 2006). Since then, it has been linked to the beginning of athletic competitions as a consequence of taking part in and ultimately winning such a competition. As the twentieth century progresses, the idea continues to expand, and new methods are ascribed to it by the theorists and practitioners of the era (Akgün et al., 2009). This is because, in the modern day, performance is recognized as the genuine measure of worth for any company leader or manager. Performance-related indicators that can be measured, compared to pre-established benchmarks, and used as a basis for future adjustments, added value, and competitive advantage are measurable (Amagoh, 2008).

Another approach for organizing and analyzing the values of individuals and corporate culture is value analysis (Taticchi, Tonelli & Cagnazzo, 2010). With respect to specific intents, expectations, and ideals, this technique reveals what individuals value more or less and what they consider desirable. In workplaces where employees are more preoccupied with addressing their most fundamental needs, their behavioral options are constrained, resulting in a decline in their contribution to enhancing the productivity of their job (Deutsch & Silcox, 2003; Ashkanasy, 2011). As a result of their increased expectations, employees are more likely to contribute to the success of the company (Olson et al., 2005; Andriole, 2010).

For the time being, the only options for growing enterprises are the capacity to generate new goods and services, the ability to enhance internal and external connections in order to favor the creation of competitive advantages that will assure market success. To be competitive in today's market, organizations must not only depend on their own internal resources, but also on their relationships with other configurations and external entities. The company's external network is essentially an extension of the internal borders between the two types of networks, which are becoming increasingly difficult to distinguish.