Strategic Management Accounting
Section outline
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Opened: Tuesday, 20 August 2024, 12:00 AMDue: Tuesday, 27 August 2024, 12:00 AM
Submission Guidelines:
- The assignment should be well-organized, with each section clearly labeled.
- Provide real-world examples where possible to illustrate the application of each technique.
- Cite any sources used to support your analysis.
- Submit your completed assignment Handwritten by September 3, 2024.
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1.1 Course Description
The course will acquaint students with comprehensive knowledge and skills to examine the management accountant’s role in dynamic organizations operating in the global business environment. In this role, the management accountant engages with the organization’s management team and contributes to strategy development and implementation, to create customer and shareholder value and a strong competitive position for the organization.
1.2 Course Objectives
The objective of the course is to enable students to;
b) Gain proficiency in strategic cost management techniques, including activity-based costing and life-cycle costing
c) Explore the design and implementation of performance measurement systems aligned with organizational strategy
d) Study the role of strategic management accounting in identifying and managing risks.
e) Develop skills in budgeting and planning processes that support strategic goals.
Learning Outcomes.
1.3 At the end of this course, students will be able to;
a) Demonstrate the ability to integrate financial data with non-financial information for comprehensive decision-making
b) Show proficiency in strategic cost management techniques, including activity-based costing and life-cycle costing
c) Design and implement performance measurement systems aligned with organizational strategy
d) Demonstrate the role of strategic management accounting in identifying and managing risks.
e) Develop skills in budgeting and planning processes that support strategic goals.
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1.1 Overview of Strategic Management Accounting
1.2 The strategic management processes
a) The role of management accountants in strategic management •
b) The key challenges facing management accountants • Challenges • Causes of change in the business environment
1.3 Analytical techniques available to management accountants •
- Value analysis (value chain analysis) •
- Strategic cost analysis
- Managing customers
- Managing corporate value
- SWOT analysis
- Internal analysis
- External analysis
- Competitor analysis : Porter’s Five Forces model •
- Lifecycle accounting
- Target accounting,
- Balanced Scorecard
- Benchmarking
- Attribute Costing
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1.2.0 Strategic Cost Analysis
- Strategic cost analysis Overview
- Assumptions of strategic costs analysis
- The process of Strategic costs analysis
- The application (Strategic fit)
- The four key questions
- Key strategic cost functions for Managers
- Calculation of the Total costs for products and Profit Analysis under ABC & Full costing Techniques
- Direct costing method
- Full costing or Absorption costing method; definition; process; example; challenges
- Activity Based Costing method (ABC): Definition; process; example illustration
- Hierarchical ABC Profit Analysis
- Time-Driven ABC (TDABC) Costing method
- Practice Questions for Profit Analysis under Traditional and ABC Costing methods
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- Value Analysis (Shareholder, Customer, Stakeholder)
- Pricing models: Value pricing vs Cost-plus pricing
- Assumptions of Value pricing
- The Value pricing Equation
- Value Chain Analysis: 2x2 Matrix (Value adding activities and Non Value adding Activities)
- Practice Question on Value chain analysis
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(a) The role of management accountants in influencing stakeholder decision-making
• Balancing stakeholder requirements and information delivery
• Differing levels of information in the organization
• Importance of linking information to strategy
• Roles of the management accountant (
b) Upgrading or replacing information systems
• The stimulus for a new or updated system
• Making a preliminary assessment
• Pitfalls in evaluating major information needs
• Analyzing new and existing information systems
• Evaluating a suggested information solution
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Instructions:
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Presentations:
- Group 1: Will present on 25th October.
- Group 2: Will present on 29th October.
- Group 3: Will present on 1st November (During class hours).
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Submission Deadline:
- The complete assignment must be submitted by 8th November 2024 at 6:00 PM.
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Guidelines:
- The assignment should be a maximum of four pages.
- Use Times New Roman font, size 12, with 1.5 spacing.
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Presentation Guidelines for Group A Time (Minutes) Introduction of Members 5 2. Section I: The Role of Management Accountants in Influencing Stakeholder Decision-Making a. Key Information Provided by Management Accountants 5 b. Influence on Strategic and Operational Decision-Making 4 c. Case Study: Data-Driven Insights in Decision-Making 5 d. Ethical Responsibilities of Management Accountants 4 Q&A and Responses for Section I 6 3. Section II: Pitfalls in Evaluating Major Information Needs a. Common Challenges in Identifying Information Needs 5 b. Role of Management Accountants in Avoiding Misalignment 5 c. Impact of Biases and Assumptions on Information Accuracy 5 d. Real-World Examples of Misinformation and Suboptimal Decisions 3 Q&A and Responses for Section II 8 4. Closing Remarks and Summary 5 Total 60 Minutes -
Presentation Structure
Section
Time Allocated
1. Introduction
3 minutes
2. Information Levels in Organizations
3 minutes
3. Impact of Information on Decision-Making at Various Levels
6 minutes
4. Balancing Stakeholder Needs Through Information
6 minutes
5. Role of Management Accountants in Aligning Information with Strategic Objectives
7 minutes
6. Consequences of Misaligned Information Systems
5 minutes
7. Mitigation Strategies by Management Accountants
5 minutes
8. Conclusion and Q&A
5 minutes
Key Questions:
i. Analyze how different levels of information (strategic, tactical, operational) affect decision-making at various levels of an organization. Discuss how each of these information types is critical for balancing the needs of different stakeholders. (15 marks)
ii. How can management accountants help ensure that information delivery is aligned with an organization’s strategic objectives? Discuss the potential consequences of failing to link information systems with strategic goals, and the ways management accountants can mitigate these issues. (15 marks)
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Description
Time Allocated
1. Briefly introduce the topic, purpose, and importance of information system upgrades or replacements in today’s organizations.
3 minutes
2. Identify and explain the primary internal and external factors that push organizations toward upgrading or replacing their information systems.
10 minutes
3. Explain external pressures
4 minutes
4. Overview of the steps involved in assessing both new and existing information systems as a preliminary evaluation.
5 minutes
5. Approaches for evaluating a new system or upgrade; organizational, stakeholder needs, ROI, and scalability.
10 minutes
6. Explain how to analyze current processes and requirements to determine compatibility and future needs.
3 minutes
7. Highlight the importance of identifying and prioritizing the needs of key stakeholders in the evaluation.
3 minutes
8. Discuss the evaluation of expected returns, scalability, and adaptability to future needs.
4 minutes
9. Present a brief case example or real-life scenario of an organization’s decision-making process for an information system upgrade or replacement.
7 minutes
10. Q& A
5 minutes
Assignment Questions
I. Evaluate the factors that drive an organization to upgrade or replace its information systems. What are the internal and external stimuli that typically necessitate such changes? (15 marks)
II. Discuss the process of conducting a preliminary assessment of both new and existing information systems. How would you approach the evaluation of a proposed solution, considering the needs of the organization and its stakeholders? (15 marks)
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