Over the years global business environment has gone through some massive changes. These changes are due to changes in socio-economic situations, changes in consumers’ demands, changes in technological environment, changes in political scenario etc. Today’s business environment is referred to as the modern business environment which is characterized by globalization, advanced technology, intense competition, powerful customers and consumers, efficient and effective processes, social responsibility etc. Globalization is perhaps the most widely used and investigated terms in the modern business environment. Globalization has removed almost all boundaries among different countries. Today entire world is seen as a single market where every organization has significant opportunities and this has happened due to globalization. According to David Held, David Glodblatt, Anthony McGrew and Jonathan Perraton globalization is such a process or a combination of processes that represents a transformation that involves organization of social transactions and relations and such transformation is evaluated in terms of processes’ extensity, velocity, impact and intensity; these generate irregular or transcontinental flows, exercise and interaction of power and networks of activity (Ervin & Smith, 2008, pp – 4).
Modern business environment is also characterized by high end technologies and the technology that is dominating the business environment is the information and communication technology. Internet and related technologies have changed the meaning of business communication. In the current business environment, business transactions are just matter of some clicks. Today, business processes are faster than they were ever before.
Present business institutions are significantly affected by the surrounding environment. Almost all the renowned business organizations are very much concerned about various issues that might rise in regards to pollution and other hazardous effects of the operation of the said organisation. As such, today all business organisations are trying to minimize the pollution level by implementing state of the art technologies
Intense competition is one of most important features of modern business environment. Each and every firm is adopting and implementing innovative strategies in order to stay much ahead of its competitors. Competition has become more intense due to the presence of large number of companies, fast change in technology and consumers’ tastes etc. In such competitive environment product life cycle has been shortened. Today a product reaches to its maturity phase very fast and one of the main reasons behind this is the launch of new technology. A technology which is heavily used today might be completely obsolete tomorrow and the products that are dependent on that technology also become irrelevant to the consumers.
Sound management accounting control system is another important feature of modern business environment. Accounting researchers are found to be heavily interested in investigating the relationship between the change in management accounting control system and organizational performance (Seaman, 2006).