ARTICLE#1 CULTURAL INFLUENCES ON GERMAN VS U.S.

MANAGEMENT
ACCOUNTING PRACTICES
1. The article takes a look at the differences between German and US
management accounting practices while trying to highlight the root cause of
these differences. It also tries to argue if one practice is stronger and more
suitable than the other.
2. However, instead of arguing only in terms on cost-benefit or other traditional
approaches, the article lays emphasis on the cultural differences between the
two countries and how that could shape accounting practice preferences. In
this effort, it identifies why individual management practices tend to reflect
the actual cultural differences in the countries.
3. This article aims at showing that the U.S should probably not use the German
Management Accounting systems because it may not be the most efficient
solution for them due to cultural and organizational differences. Differences in
both countries culture is used to highlight why it is inaccurate to assume that
one size fits all.
4. The article also explains how each country reacts to flexibility, work and
busyness, structure detail, timeliness, precision, one or more bosses,
strategic and operational emphasis and finely instigator or implementer of
new ideas. It identifies German work culture as one of strong uncertainty
avoidance (SUA) nation while US is more of a weak uncertainty avoidance
(WUA) nation based on these parameters.
5. The article concludes by saying that national cultural factors are a part of the
cost and benefit consideration that should underlie all management
accounting choices. This should be kept in mind by those deciding on the
appropriate management practice to adopt.
6. The article was very insightful as it looked beyond the traditional cost-benefit
analysis for a management decision and instead focused heavily on the
culture of the organization and the country. In this era of best practices
where organizations are racing to outdo each other in terms of adopting
universal accepted standards, the article lays emphasis on taking a step back
and identifying self-culture and only then deciding your own best practices
ARTICLE#2 A NEED FOR A CHALLENGE CULTURE IN ENTERPRISE RISK
MANAGEMENT
1. This article explains how a challenging world can evolve Enterprise Risk
Management (ERM) into a practice and not just a simple compliance
exercise. It also highlights the importance of culture and the need for risk
governance and culture to be aligned to avoid conflicts and uncertainties.
2. ERM was developed over the past couple of decades as industries identified
the need to have an overarching risk management framework rather the
earlier silo approach which led to sometimes duplication of efforts and at
other times blame-shifting. However, there are still cases highlighted where
risk issues emerged due to improper implementation of these frameworks as
part of the culture of the organization.

3. The article highlights the General Motors ignition switch recall incident as a
major failure of the risk management system where the culture
overshadowed the risk governance. This led to a situation where a seemingly
minor issue that could have been fixed years ago was left to grow into a
major scandal leading to monetary and potential civil fines, customer injuries
and fatalities, and ultimately, corporate disrepute.
4. Strong ERM teams are essential in organizations to avoid repeat of GM and
Enron type events but can only be successul if we can ensure the creation of
strong ethical practices and training programs even among the C-suite
executives. It is also essential to have a culture change champion who can
help transform the corporate idealogy and culture to be aligned with
Enterprise Risk Management goals and thereby avoid repeat of such a
situation.
5. Apart from this, the article also describes how performance evaluation and
rewards can include strategic initiative program towards the creation of
strong ERM team to align each individuals goal with the organization and its
risk culture as a whole rather than being devoted to certain employees. It is
important to note that at the end of the day, we are ultimately responsible
not to our management or even the Board, but to our customers,
shareholders and all other stakeholders.
6. While I was aware of ERM departments/teams in the organization and the
reason of creating those departments within the organization, I am still
unsure how management accounting can help in this field. However, I do
believe that it is crucial to have strong risk governance structures or the cost
would eventually be the reputation of the company.
ARTICLE#3 A NEW HUE OF GREEN FOR THE MANAGEMENT ACCOUNTANT
1. The article discusses a renewable energy project undertaken by a
mountain resort (Jiminy Peak) which was faced with high energy usage
of electricity by the resort area even with adoption of updated
conventional technology. The article focuses on a mutually win-win
situation where organizations explore and adopt green energy and
environment friendly alternatives and management accountants help with
project feasibility studies through cost-benefit analysis.
2. Jiminy Peak saw the potential and decided to invest in clean energy by
installing a single 1 megawatt wind turbine. Even though they had funding
from the renewable energy trust and a loan from a local bank, they faced
a supply issue as few manufacturers were willing to provide single turbine
units given their economies of scale.
3. Jiminy Peak was also unsure of the demand as energy is a non-storable
commodity. However, they decided to get a larger 1.5 megawatt turbine
as they were willing to be pioneers in investing in green energy and also
had an alternate option of selling additional energy to the grid.
4. The implementation of a wind turbine was a huge milestone in the clean
energy drive as well as a financial success. They were fortunate to have
the support of MTC (renewable energy trust) which provided not only the

financial and technological support but also agreed to guarantee purchase

of renewable energy credits for the bank loan.
5. Management accounting played a pivotal role in the project as it was a
significant proof of concept milestone. Management accountants helped
to contribute towards the environmentally friendly energy sources through
financial feasibility studies and cost-benefit analyses. This provides
potential for further inclusion and investment in green energy across forprofit organizations.
6. Management accounting is an important component of not only
manufacturing or non-manufacturing industries but can also be used for
various other initiatives like in the proof of concept testing for renewable
energy. Establishing successful implementation and financial success can
help to benefit society through spurring future investments in green and
renewable energy which could help corporations improve their bottom line
as well as be beneficial for the future, this providing an ideal social,
economic and ecological balance.