MANAGEMENT ACCOUNTING AS AN INDISPENSABLE TOOL IN THE MANAGEMENT OF AN ORGANIZATION

(A CASE STUDY OF NIPOST ORGANIZATION)

By

ANI MARTHA NWAMAKA

Presented To

Department of Accountancy

ABSTRACT

This research topic" management Accounting as an indispensable tool in the management of an organization" helped us to research into how NIPOST organization has adapted management Accounting techniques to achieve increased efficiency in its postal services to the nation. This is because in recent time, modern management is interested in not only" knowing the cost of production" but also in " Controlling the costs of production".

Management Accounting is, therefore, primarily concerned with data gathering (from internal and external sources) analyzing, process, interpreting, and communicating the resulting information for use within the organization so that management can more effectively plan, make decisions and control operations.

This research work tried to find answers to the follow research questions.

1. How has management Accounting affected the achievement of NIPOST corporate goal?

2. Can NIPOST organization operate effectively without the service of management Accounting unit?

3. How has management Accounting affected the decision making process of NIPOST management?

4. Do you think that management Accounting unit has helped the management of NIOPST to attain Maximum efficiency in its planning process?

5. Do you think that management Accounting is an indispensable tool in the management of NIPOST organization?

In conducting this research work, the researcher, arranged his work in five chapters.

Chapter one, dealt with the introduction of the topic, which include background of the problem under study, statement of the problem, objective and significance of the study.

Chapter two took care of literature review. This chapter tried to define management accounting and its scope as regards to other branches of accounting. It also threw more light on the objective of management accounting, functions of management accounting, advantages of management accounting as well as the tools and techniques of management Accounting.

Furthermore, chapter three dealt on the research design and methodology adopted in this work. In conducting this research work, the researcher used both primary and secondary data. Primary data were collected through interviews, observations and the administration of questionnaire to interned respondents. Secondary data were also collected from textbooks, NIPOST Journals and Magazines

Chapter four treated the analysis and interpretation of data collected through the administration of questionnaire and a percentage analysis was used to interpreter the responses. Also, the researcher used chi-square method for testing the hypothesis.

Finally, chapter five highlighted on the research finding, recommendation and conclusion.

CHAPTER ONE

INTRODUCTION

Management is essentially concerned with planning and control of the resources of a firm, with a view to the attainment of set objectives Planning is concerned with listing of goals and the formulation of a decision model for selecting means of achieving those goals Control on the other hand, is the regulation of the activities within an organization so that they are in conformity with expectations established ion policies, plans and targets

Furthermore, crucial to the planning and control decisions of management, is information Good decisions are based on information that is timely, relevant, properly presented, problem solving and forward looking And here comes the challenge for the management Accountant to provide information for the planning and control of costs, volume and profit, for the purpose of attaining goals o management

Management Accounting, therefore, is concerned with the application of accounting and statistical techniques to the specific purpose of providing and interpreting information designed to assist management in its function of promoting maximum efficiency

Management Accounting focuses on the internal environment of business, and provides information for such decisions of the firm as make or buy, replacement, pricing and cost reduction decisions

We should note, that today, life has become complex both for individuals and management could take decisions by " bit " or "miss" methods or by " mere guess" so if any management does not plan on a systematic basis, it will be branded logic of little or no profits Hence modern management, for its vital task of planning, should rely more on management accounting Management Accounting has shifted managerial emphasis form " Knowing costs of production is the very reason that makes management Accounting to be referred to as "an indispensable tool in the management of an organization"

According to " T Lucey, (1988:1) management Accounting is primarily concerned with data gathering (from internal and external sources) analyzing, processing, interpreting and communicating the resulting information for use within the organization so that management can more effectively plan, make decisions and control operations

11 HISTORICAL BACKGROUND OF INPOST

The origin of Nigerian postal service (NIPOST) dates back to 1851 when the British postmaster General established a postal (PWD), in Lagos public works department office, primarily to officials and traders and their home base "Chimezie, 1985:19)² This assertion was supported by Baba (1998:1)³ who postulated that the first letter ever carried from the first ever post office in Nigeria was in 1851 and was by foot and horses into the hinterland

The postal service in Nigeria was first re-structured in 1907 when from public works department of ministry of works to form post and telegraphs, the structure it maintained up till Nigeria became independent in 1960

With Nigeria's, independence in 1960 and her postal Administration becoming a sovereign member of the Universal postal Union (UPU) in 1961, the post in Nigeria has witnessed phenomenal growth in strength and spread with a total of over 4,500 (four thousand five hundred) postal establishments in the country today And this number is increasing

The universal post Union is the organization which embraces nearly all the postal administration in the would and it is one of the specialized agencies of the united nationals For this reason, the historical origin of Nigerian postal service cannot therefore be compete without citing when it jointed the Universal postal union (UPU) which is the mother association of global administration

The postal service in Nigeria was further re-structured on 1^st January 1985 when the defunct post and telecommunications, was split into two organizations Nigerian External telecommunication (NET) and the Telecommunications division of the P& T were merged to form the Nigerian Telecommunications limited (NITEL) while the postal division of P & T became reconstituted into an extra ministerial department to be known as Nigeria postal service department (NIPOST), all still under the ministry of communication Ayuba (1986: 7) ⁴

On I^st July, 1992) Nigeria postal service department was finally re-organized and re-structured to the present status of a corporation following the granting of full autonomy by the federal government for higher efficiency and effectiveness, and by virtue of decree N041 of 1991, published in the federal Republic of Nigeria official Gazettee No57, Vol 79 of 14^th October, 1992 ⁵ which spelt out the objective and functions of NIPOST By this development, the acronym" NIPOST" now means "Nigerian postal service department " that it was before the autonomous status

PRIMARY RESPONSIBILITY OF NIPOST

"The primary responsibility of NIPOST as established by the decree No18 of 1987"6 were to deal with postal, professional and policy issues as:

a To represent the Federal republic of Nigeria in its relations with other postal administration around the world in accordance with international regulations

b Exploration of additional sources for postal revenue

c Review of postal tariff

d Worldwide provision of highly dependable postal link between and among member nations of the Universal postal union without discrimination to race, creed and sex

e Provision of efficient counter and remittance services in the sales of postage stamps, sales of money and postal orders, sales of international postal reply coupon and post office registered envelope

ORGANIZATIONAL STRUCTURE OF NIPOST

The organizational structure of NIPOST is made up of the postmaster general of the federation at the apex Directly under him are five-deputy postmaster general as follows:

1 DPMG Corporate service

2 DPMG Operations Planning

3 DPMG Finance and Investment

4 DPMG Territorial Administration

5 DPMG Engineering and Technical service

There are also unit heads called the senior Assistant postmaster generals (SAPMG) who also report direct to the postmaster general They are as following:

1 SAPMG In charge of internal Audit

2 SAPMG In charge of Investigation and security

3 SAPMG in charge Public Relations

4 SAPMG in charge of Legal unit

5 SAPMG In charge of Corporate Planning

6 SAPMG In charge of marketing

7 SAPMG In charge of management Information System

NIGERIA POSTAL SERVICE: ORGANIZATIONAL CHART

12 STATEMENT OF THE PROBLEM

There is increasing evidence today, that most failure in management is attributed to failure to plan for the future Today, an economic activity are so complex and delivers The market is wide and competition is cutthroat For this reason, mere ascertainment of cost is of little use In recent time, modern management is interested in not only " Knowing" the costs of production but also in " controlling" the position to know the cost of production or services rendered, that they can equally determine the expected management can actually know whether it is performing according to plans and standards set

Moreover, this problem of determining the cost of production and being in position to control the costs gave birth to management Accounting Over the years, management Accounting has developed as an internal administration aid to business management and its techniques is quite different from the conventional system of recording and classifying the business transactions through double entry system of accounting

The problem then is how NIPOST organization can adapt to management Accounting techniques to achieve increased efficiency in its postal services to the nation This research work will also try to answer the question," How does NIPOST organization use management Accounting as an indispensable tool in the management of its human and material resources

13 OBJECTIVE OF THE STUDY

The objective of this study is to examine the degree and nature of effects management Accounting has on the achievement of the corporate goal or objective of NIPOST, which is " To provide Universal qualities postal service that is efficient, effective, reliable and affordable with a committed workforce tat guarantees customer satisfaction at all time" ⁷ 

The researcher also intends to investigate the level of attention given to management Accounting unit of NIPOST organization by the top management cadre and the degree of importance they attach to information generated from the management Accounting unit of the Accounting department

This study will equally help the researcher to determine whether management accounting techniques and information given to management has affected positively or negatively the growth of NIPOST organization

14 SIGNIFICATION OF STUDY

This study is significant in the sense that it will take a look at management Accounting which has a wider scope than nay other system of accounting like financial accounting and cost accounting

It is hoped that through this study, some good contributions would be made to the existing stock of knowledge in this field

The study will also act as a guide to top management of big organizations like NIPOST and policy makes on the importance of management accounting in decision making

15 THE SCOPE AND LIMITATION STUDY

This study tries to cover the importance of management accounting as an indispensable to in the management of an organization Do to the nature of the topic, the researcher focuses mainly on top management

The limitations to the study are time, lack of statistics and respondents phobia

The time limit between the date of approval of this project topic and school activities limited the scope of this study

Another set back to this research work was the inability to obtain some accurate statistics and data required

This lack of statistics and accurate data was brought about by the "Respondent Phobia attitude" of the people interview This is because most information considered as confidential to the organization were seriously hidden by the respondents The researcher found it difficult convening interviews that this study is only an academic exercise

16 RESEARCH QUESTION

This research work will try to find answers to the following questions

1 How has management accounting affected the achievement of NIPOST corporate goal?

2 Can NIPOST organization operate effectively without the service of management accounting unit?

3 How has management Accounting affected the decision making process of NIPOST management?

4 Do you think that management accounting is an indispensable tool in the management of NIPOST organization?

17 STATEMENT OF HYPOTHESIS

In other to carry out this study properly hypothesis will be empirically tested using research questions numbers 4 and 5 above as follows:

A Hoi: management Accounting is not an indispensable tool in the management of NIPOST organization

Hi: management accounting is an indispensable tool in the management of NIPOST organization

B HO₂: management accounting unit has not helped the management of NIOPST to attain maximum efficiency in its planning process

H!_2: management accounting unit has helped the management of NIOPST to attain maximum efficiency in its planning process

18 DEFINITION TERMS

The terms used in this research work is defined to suit the concepts adopted in this study

1 NIOPST: this abbreviation means Nigeria postal service

2 UPU: This means universal postal Union This is the Umbrella organization for all the postal administrations world-wise

3 P & T: This means postal and telecommunications This body was split into NIOPST and NITEL in 1985

4 RESPONDENT PHOBIA ATTITUDE: This means the fear of revealing confidential information or official secrets in the process of answering the questionnaire given to the respondents

5 ORANIZATIONAL CHART: A device used to portray or represent the organizational structure in a diagrammatic form