The firm can then set targets based on this broad view and develop strategies to achieve its goals. The Balanced Scorecard (BSC) is ‘a comprehensive set of performance measures designed to assist managers in formulating and implementing competitive strategies and monitoring performance with respect to them’ (Banker and Johnston 2002).īy measuring a firm’s activities from four perspectives, namely financial, learning and growth and innovation, customer satisfaction and internal business process, the BSC compliments the financial measure of company performance with the additional three non-financial measures and establishes a link between previously disconnected elements of the business through the understanding of the link between cause and effect (Bhimani et al 2008 Kaplan and Norton 2001 Mangena 2010).įig 2: The Four Perspectives of BSC (Source: Strategic Accounting, Lecture 8)įig 3: Establishing the Link between the Four Perspectives (Source: Strategic Accounting, Lecture 8) Motorola and Xenox are firms who carried out competitive intelligence research to analyse their competitors and their mode of operation, set new targets and developed strategic plans to achieve their targets (Gong and Zhang 2007).įig 1: Porter’s 5 Forces Model (Source: Strategic Accounting Lecture 2) This enables the management of a firm to map out strategies on how to actualise the firms’ vision and compete effectively and profitably in the market. Taking into account Porter’s 5 forces model (Porter 1995), this technique enables a firm to determine its position in the industry, its competitive advantage, strengths and weaknesses, by taking into the cognisance the state of the industry, the strengths of its competitors, their competencies and their weaknesses. The Competitor Analysis reviews the position of the firm by an analysis of its competitors and the competitive environment (Gong and Zhang 2007). Techniques such as the Competitor Analysis and Balanced Scorecard can be used as decision making tools in this regard. Critical decisions taken include which competitive strategies the firm should adopt, such as whether to go for a differentiation or cost leadership strategy, and the investment or capital project that should be undertaken.This function defines the long term goals and objectives of the firm and MA provides a framework for management to define the future shape of the business (Collier and Gregory 1995). Management accounting (MA) provides information that helps with the strategic management function of firm managers.MA thus plays a key role in consistently providing information that aids the decision making process aspects of which are stated below: In attaining set organisational goals and targets managers are constantly taking decisions which impact on an organisation and its capacity to remain as a going concern. Management accounting is a means of providing managers of a firm with both financial and non-financial information to assist them in achieving the goals of the organisation (Bhimani et al 2008). Management Accounting and Its Role in Strategic Decision Making: It then focuses on the costing, pricing and performance management challenges affecting Apple Plc and suggests MA techniques which can be used to resolve the issues raised, showing how management accounting techniques can be used to bring an improvement in the operational effectiveness of the company. The report introduces the concept of Management Accounting (MA) and explains the usefulness of its techniques in carrying out management functions. This report analyses the operations of Apple Plc with the aim of recommending techniques in management accounting to improve the processes of the company. The company currently uses traditional accounting techniques for its operations however this has resulted in costing and pricing issues, which has created a level of friction between managers of the firm. Apple Plc is a confectionary company involved in the production of candy bars, chews and other sweets.
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