According to Patterson, “servant leaders are those leaders who lead an organization by focusing on their followers, such that the followers are the primary concern and the organizational concerns are peripheral” (Shekari and Nikooparvar, 2012). They are those leaders who place their subordinate’s needs before their own and focus on helping their employees to grow and achieve optimization in their careers and skills (Waterman, 2011). Managerial accounting is a combination of accounting, finance and management while making use of leading techniques so that the businesses can be a success. It actually involves the identification of, measurement of, analysis, interpretation and communication of the tactics to achieve the organizational goals. The managerial accounting requires building integrity into business; explaining the competitive landscape; conducting business audits; formulating strategies; monitoring finances; and also identifying financial implications of decisions (Spears, 2004). By encouraging servant leadership, all these duties can be given to everyone and everyone shall be made accountable which would not only improve innovation but also encourage everyone and make everyone a leader in the business.
With the highly dynamic corporations due to globalization, servant leadership is the most effective in dealing with the diversity and changing culture. When organizations practice servant leadership, their profits increase and the shareholder value is improved. As the rate of change in organizations increases, the efficiency of operations has to be improved and this uncertainty can be dealt by promoting servant leadership through managerial accounting (Edmunds and Tsay et al., 2011). The servant leaders as compared to the traditional leaders are secure and solution-oriented; they are more responsible and recognize the strengths of their subordinates which can be capitalized for the organization. This style encourages more involvement of the employees and enhances teamwork in organizations. This increases trust and positive feelings between the management and the employees which further lead to better productivity (Spears, 2004).
Edmunds, T., Tsay, B. and Olds, P. (2011). Fundamental Managerial Accounting Concepts. 6th ed. New York: McGraw-Hill Irwin.
Shekari, H. and Nikooparvar, M. (2012). Promoting leadership effectiveness in organizations: A case study on the involved factors of servant leadership. International Journal of Business Administration, 3 (1), p. 54.
Spears, L. (2004). Practicing servant-leadership. Leader to leader, 2004 (34), pp. 7--11.
Waterman, H. (2011). Principles of'servant leadership'and how they can enhance practice.. Nursing management (Harrow, London, England: 1994), 17 (9), p. 24.