The Challenges of Management Accounting and Leadership in a Distressed Company



A leadership is one who gives institutions to his subordinates. He inspires, enthuses and give them guidance to carry the instructions out towards the achievement of set goals. In a business enterprise, there is a need for somebody in the leadership position to organize the work, give orders and inspires the efforts of others.

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Leadership is a prime motivation in a organization. What workers went more than anything from a leader is justice and efficiency. If a leader can build up a reputation for fain play, then he is more likely to earn respect of his workers. A leader who can make decision and stands for truth will also motivate workers. Apart from setting good example, communicate with and inspire his workers, the following are also expected of a good business leader:

(a)     Ability to secure interest, by keeping people informed of proposed development and progress.

(b)     Fairness in allocation of work, rate of payment, discipline and encouraging teamwork.

(c)      Enouncing accountability in the affairs of the organization.

A good leader must possess the following characteristics.

ABILITY: leaders must demonstrate superior ability their skills and knowledge should entitle them to the position to leadership.

 CREDIT ABILITY: leaders are expected to know the rules of the game, the norms, expectations and values of a group to be posses the following qualities.

A genuine interest in achieving success for department rather than for himself.

The ability to assess staffs capability and clearly, confidence in them.

The ability to admit mistake and to apologies when in the wrong.


For a manages to be an effective leader in work situation, he must possess some basic qualities or traits. These qualities are often referred to as “personality traits and motivational traits.” As the description implies, the personality traits are those inherent qualities in any man required to perform any job well.

They include intelligence, initiatives, supervisory ability, self assurance, masculinity and willingness to take decisions.

Motivational traits are those qualities required to make the leader stimulate others to perform.

These traits include desire for self actualization, for power to exercise over others and example may be considered to be essential to effect leadership.

A leader should have the following attributes skill, technology, perception, memory, knowledge, imagination, determination, endurance and courage.

A leader is trusted, who can inspire and warm the hearts of those he leads, gazing theirs trust and confidence and explaining what is needed in the language which can be understood by all.



Every manager, as a leader is unique in his style of management. This is as a result of the difference in the personalities and the background of individual management used. These styles and the characteristics identify them as stated in Owojori (1994) can be as follows:

Great man style: The manager who has this style places all-important emphasis on result, thus the managers

Administration is characteristic by.

  1. Complete responsibility for decision making and control is wholly in the hands of the leaders (managers).
  2. Incentives, salaries and security of employment are seen as sufficient motivators.
  3. ORGANIZATION-MAN STYLE: This place great reemphasis on procedures and systematizing method and techniques.

This characterized by:

(a)     Compromise in dispute settlement.

(b)     Motivator factors include money, security, recognition, for achievement and status.

  1. SOCIAL-MAN STYLE: This is based on the belief that the participation of employees will bring more communication on their belief, employees are allowed to be involved in decision making processes. It is characterized by.
  2. Democratic leadership
  3. Democratic of responsibility and authority philosophers and social theorists have attempted to summarize their observations by proposing various typologies of leadership which include
  4. The executive type who is granted leadership because he get thing done.
  5. The reflective intellectual type who may find it difficult to recruit a large following.
  6. The charismatic leader, helps group rally around a common aim, but tends to become dogmatically rigid.
  7. The informal leader tends to adapt his style of performance to group needs.

The theory also incorporate four major types or styles of leadership which is briefly summarized below:

  1. Directive leadership: This style is similar to that of the white authoritarian leader. Subordinates know exactly what is expected of them and specific directions are given by the leaders.
  2. Supportive leadership: This leader is friendly and approachable and shows a genuine concern for subordinates.
  3. Participative leadership: This leader as for and uses suggestion for subordinates but skill makes the decisions form subordinates but there is no participation of the subordinates.
  4. Achievement oriented leadership: This leader sets challenging goals on subordinates and shows confidence that they will perform well and attain these goals.

Leadership is practiced by leadership style, which is the total pattern of leaders action in relation to followers. It represents their philosophy, skills and attitudes in practice.



Accounting to dictionary definition, management accounting is defined as “ accounting designed for or adapted to the information needs of various levels of management.

The character institute of management accounting (CIMA) defines management accounting as “an integral part of management concerned with identify, presenting and represent information used for:

  1. Formulating
  2. Decision making
  3. Planning and controlling activities
  4. Optimizing the use of resources
  5. Disclosures to shareholders and other external to the entity.
  6. Disclosure to employees
  7. Safe gaudy assets.

The above involves participation in management to ensure that there is effective:

  1. Formulation of plans to meet objectives (strategic planning).
  2. Formulation of short term operation plans (budget/ profit planning.)
  3. Communication of financial and operating information
  4. Corrective action to bring plans and results into live finance control.
  5. Acquisition and use of finance and recording of transactions. (Management accounting.).
  6. Receiving and reporting on systems and operations (internal audit and management audit.

Management accounting therefore is primarily concerned with data gathering analyzing process, interpreting etc.



Planning is an inescapable part of all human activity     and can be defined as“ the establishment of objective and the formulation, evaluation and selection of the polices, strategies, tactic and action of the required to achieve these objectives.


Decision-making is very important in management accounting. Managers (leaders) of a company has the ability to decide on how the management as a whole will be going, the financial statement, profit and loss account, balance sheet as at last day of the year, the auditors report of a company etc.

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