“With great power comes great responsibility.” Those who have seen Spider Man, I am sure, would understand what this statement means. As a natural corollary, wouldn’t it be right to also say that with great responsibility come great power? Haven’t you had your grandmothers tell you in your childhood that if God gives us challenges HE also fortifies us with the power to face them? So do, we agree that in order to play a greater role, we need greater power?
Over the past few decades, there has been a substantial change in the way businesses are managed. The static way to manage businesses has completely been replaced by dynamic methodologies and tactics in order to stay ahead in the ever-changing market place. Every aspect of business from procurement, production, distribution, marketing to selling has seen an unprecedented change in text and tone. It is only logical then, to re-think and restructure the way business performance is measured to keep in pace with the evolving market environment.
For decades now the role of Chartered Accountants has been to broadly manage the money aspect of businesses. And since the return on capital employed is the core issue of businesses across industries, the significance of CA’s positions in an organisation is obvious. Their role not only involves financial advice to the management but also maintaining the financial records of the company and ensuring compliance to the law. They are involved in ensuring that the financial transactions of a firm are in strict adherence to statutory requirements and managing the tax angle of the business, which is a critical area of “money management” for a firm. Chartered Accountants involved in private practice, audit the books of accounts of their clients to ensure the authenticity of financial declarations made by the firm.
Over the past few years, as the degree of dynamism of businesses, their functional models and the economic environment changed drastically, the performance measurement parameters also have changed. Top management thinkers and consultants across the globe realised that the financial accounts and statements of the firm are static snap shot pointers to the financial health of companies. These financial statements and assessments are insufficient to point towards the growth of the firm and hence they can only provide reactive rather than proactive solutions.
Enter the balanced scorecard concept, which focuses on future growth potential of a firm in addition to the existing static financial parameters. The new age chartered accountant needs to be sentient of the operational business risks an organisation is subjected to in addition to the financial risks that he has been trained to mitigate as per his basic chartered accountancy knowledgebase. The chartered accountant with this added responsibility needs greater powers. So where does a CA imbibe these skill-sets, the requirement of this evolving business environment? Did anyone mention MBA? That’s right…Let’s see how an MBA degree adds value to our friendly neighbourhood CA man!!
Cross-functional exposure to business imperatives
During the course of an MBA program, one is subjected to different functions of a business. One of the most important skill sets that a management student acquires is the ability to analyse and assess the financial situation of a firm by reading its balance sheet, P&L statement etc. This is one area where a CA has a definite edge over the others because of practical hands on experience of assessing financial health of companies. However, areas like operations research, marketing management, organisational behaviour, corporate banking, international finance, foreign trade etc comprise invaluable learning in one’s endeavour to develop a comprehensive understanding of a company from macro and micro perspectives. These multi-functional skill sets help a chartered accountant to develop a three dimensional approach towards business, which is absolutely essential for better business acumen. For example a CA would not be able to appreciate why optimisation and not minimisation of travel cost is desirable for overall interest of a firm. This is because his calculation and understanding is based on activity based costing theory, part of his CA course. The operational business risks and constraints coupled with the macro environment will effectively enhance better-informed decision-making.
As a natural outcome of any MBA program, one develops the ability to be a team player. This is one of the most important pre-requisites for any successful manager. In the corporate world, tasks are performed in co-ordination with others and not as individual entities. It is thus very important for one to be comfortable with the format of working together where each individual contributes in discrete terms while also being a part of the entire process from idea generation to execution. People from different backgrounds share their experiences and hence the sum of the parts becomes greater than the whole.
A large number of my friends who are chartered accountants, when quizzed about the reason for doing an MBA would always rave how an MBA shall help them develop a multi-faceted personality. In order to stay ahead in the competitive world of today, it is of paramount importance to be versatile. A chartered accountancy course hones structured thinking ability but on the “soft skills” front an inadequacy is experienced. It would be inappropriate to conclude that all chartered accountants can develop versatile personalities only through an MBA but it is definitely fair to say that an MBA program offers an excellent platform for an individual to further hone these skills. An MBA provides the confidence to deal with people from different educational, social and cultural backgrounds. This is an important quality that a manager must possess to be an effective leader.
Another major take away for a chartered accountant is developing a global perspective. Due to the basic structure of the course of a chartered accountancy program, there is inadequate exposure to business environment from a global perspective. An MBA program helps one develop this approach in one’s outlook towards organisations, their industries and businesses in general. While dealing with a manufacturing organisation, a cost accountant might look at the manufacturing process and try to find out his most expensive cost component or a financial accountant while auditing media spends of an organisation is interested in the authenticity of payments made but his MBA exposure opens his eyes to other factors like global “best practices”. His integrating skills shall help him compare the process as well as the out -put to industry standards across the world. He would learn to appreciate the reason a Finnish manufacturer of cell phones (Nokia) wants to move the manufacturing base to China and make it the production house of 50% of world’s cell phones!!
These are some of the factors that make MBA an attractive option for chartered accountants across the world. And the icing on the cake is that all these factors make the supply demand economics hugely in favour of the friendly neighbourhood CA man (now fortified with an MBA degree). The growing demands of new age CA’s ensure fat pay packages and responsibilities people would kill for …
Did some one say it implies another resemblance to our Spider Man? After all his great powers did get him accolades (read Mary Jane) that people would kill for, remember?