Our recent study of management accounting systems for startups demonstrated that properly designed and implemented tools are linked with greater chances of business success. These systems can help environmental startups overcome failure

Cobia, Spencer

Lee, Michael T.

Boise State University - ScholarWorks

Boise State UniversityScholarWorksAccountancy Faculty Publications andPresentations Department of Accountancy8-15-2012How Management Accounting Can HelpEnvironmental FirmsMichael T. LeeBoise State UniversitySpencer CobiaBoise State UniversityThis document was originally published by Idaho Statesman in Business Insider. Copyright restrictions may apply. http://www.idahostatesman.com/nsider WEDNESDAY, AUG.1S - TUESDAY, AUG. 21, 2012 IDAHOSTATESMAN.COM E STA.TE or~ B ss How management accounting can help environmental firms his summer, we were invited to present our case-study research on accounting systems for startups at a regional meet-ing of the world's largest so-ciety for scientists, the American Association for MICHAEL T. LEE the Advancement of Sci- Assistant professor of ence. We were surprised to accountancy fmd that we were among a group of presentations about environmental trau-ma (e.g., the arsenic crisis in Bangladesh, the flooding in . Pakistan) and scientific so-lutions (e.g., chemical neu-tralization, social and physi-cal infrastructure develop-ment). SPENCER COBIA return on investment. Studies conducted by the University of Tennessee show that businesses fail mostly because oflack of business experience and the lack of use of suitable tools to support business man-agement. In our presentation, we explained how these busi-nesses could incorporate and use appropriate man-agement accounting tools with our plant analogy. The cleanup business is a seed that has the potential to grow into a plant with roots that provide the foundation for cleanup and ongoing en-Why were we invited? Alumnus of the department vironmental improvements. How can accounting sys-tems possibly be related with environmental trauma of accountancy Not all seeds or new and scientific solutions? Our recent study of Remarkably, the scientific solutions for cleaning up en-vironmental traumas were somewhat logical, methodi-cal and calculated. The diffi-culty lies in making sure that there is a business structure to support the cleanup and the follow-up improvements beyond cleanup - a structure that can operate with goals simi-lar to those of an environ-mental-protection-type au-thority. This business must use funds responsibly, pro-vide initial cleanup support and subsequent improve-ment, and deliver required returns to its investors. management accounting systems for startups demonstrated that properly designed and implemented tools are linked with greater chances of business success. These systems can help environmental startups overcome failure. cleanup businesses will grow into plants or environ-mental protection business-es. Seeds need certain ingre-dients, including the combi-nation of sun, rain, warmth and fertilizer, working with the forces of gravity to burst into the "green shoots" that form the future foundation for a strong and healthy plant. Accountants and ac-counting systems are often seen as cost consumers in a new business. That's like thinking that gravity would impede plant growth. But gravity actually helps rather than hinders the develop-ment of a seed by pulling to-gether the essential ele-ments of sunlight, moisture, warmth and nutrients. Man-agement accounting sys-It would seem that while scientists and engineers have innovative solutions for cleaning up our environmental issues, they have difficulty converting their initia-tives into lasting, viable businesses. Ac-cording to Shildlar Ghosh, senior lecturer at the Harvard Business School, 30 to 40 percent of such businesses fail completely, and 70 to 80 percent do not see the planned tems' design is to business as gravity is to plants. Instead of weighing down a business, it pulls together and facili-tates profitable business operations, effi-cient people, and the effective use of tech-nology and resources. michaellee2@boiscstate.edt spencercobia@gmail.colT 

How Management Accounting Can Help Environmental Firms

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How Management Accounting Can Help Environmental Firms

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