ACCA Paper P5 (INT) Advanced Performance management - Pocket notes - Kaplan

Подождите немного. Документ загружается.

Introduction to strategic

management accounting

In this chapter

The role of strategic management accounting.•

Planning and control.•

The performance hierarchy.•

The product life cycle.•

Multinational companies.•

Short- and long-term conflicts.•

SWOT analysis.•

Benchmarking.•

Risk and uncertainty.•

The impact of government policy.•

chapter

Introduction to strategic management accounting

2 kaplanpublishing

Introduction to strategic management accounting Chapter 1

Exam focus

The emphasis of this section is on

understanding the role in performance

management of an organisation of

strategic management accounting and

specific tools. It is important that in addition

to understanding what the tools you can

apply them to specific situations.

Introduction to strategic management accountingIntroduction to strategic management accounting Chapter 1

kaplanpublishing 3

The role of strategic management accounting

Definition

‘STRATEGIC MANAGEMENT ACCOUNTING’

providesinformationonthenancialaspectsofstrategicplansandtheirimplementations

Managementoftheorganisationconsideringstakeholdersviews

Obtaininternalandexternalinformationtoappraiseprojects,evaluateperformanceandmakedecisions

Focusesontheexternalenvironment

Monitorsperformanceinlinewiththestrategicobjectivesinbothnancialandnon-nancialterms.

Introduction to strategic management accounting

4 kaplanpublishing

Introduction to strategic management accounting Chapter 1

Planning and control

The strategic planning process

The Johnson and Scholes three stage

model of strategic planning can be used to

highlight the role of critical success factors

in performance management:

Introduction to strategic management accountingIntroduction to strategic management accounting Chapter 1

kaplanpublishing 5

Strategic analysis

Externalanalysistoidentifyopportunitiesandthreatsand• criticalsuccessfactorsinmarketing.

internalanalysistoidentifystrengthsandweaknesses–thefirm’sresourcesandcore•

competencies.

stakeholderanalysistoidentifykeyobjectivesandtoassesspowerandinterestofdifferent•

groups.

• gapanalysistoidentifythedifferencebetweendesiredandexpectedperformance.

Strategic choice

strategiesarerequiredto‘closethegap’.•

Competitivestrategy–foreachbusinessunit.•

selectstrategieswherethefirmhas(orcanacquire)therequiredcorecompetenciestomeet•

theCsFsinthemarketsconcerned.

Directionsforgrowth–whichmarkets/productsshouldbeinvestedin.•

Whetherexpansionshouldbeachievedbyorganicgrowth,acquisitionorsomeformofjoint•

arrangement.

Introduction to strategic management accounting

6 kaplanpublishing

Introduction to strategic management accounting Chapter 1

Corporate planning is the formal process which facilitates this strategic planning process.

Stages in the process:

1 Clarifying corporate objectives

Conflicts between objectives need to be resolved.•

Objectives need to be translated into • SMART targets:

Specific –

Measurable –

Achievable –

Relevant –

Timebound. –

Strategic implementation

Formulationofdetailedplansandbudgets.•

TargetsettingforkpisforeachCsF.•

Monitoringandcontrol–especiallyofcorecompetencies.•

Introduction to strategic management accounting

Introduction to strategic management accounting Chapter 1

kaplanpublishing 7

Earnings

Times(years)

0 1 52 3 4 6 7 8

Diversication

gap

Expansiongap

Efciencygap

2 Gap analysis

To show how or whether strategies will enable the organisation to meet targets for key objectives.

The existence of the gap may lead to:

revision of the objectives•

taking action to improve performance expectations.•

Example: closing a profit gap

Introduction to strategic management accounting

8 kaplanpublishing

Introduction to strategic management accounting Chapter 1

8 kaplanpublishing

T 5 target

5 initial forecast

5 forecast adjusted for improvements in

internal efficiency

5 forecast adjusted for product-market

expansion

In this instance the objectives cannot

be achieved beyond year 4 without

diversification. This gap is significant if the

lead time for diversifying exceeds 4 years.

Recent past questions

December 2008 - Question 3.

Some students showed a lack of understanding

of the planning gap in December 2008.

3 Making strategic choices

The suitability, feasibility and acceptability

framework can be used to evaluate options.

Exam focus

Notes:

Introduction to strategic management accountingIntroduction to strategic management accounting Chapter 1

kaplanpublishing 9

Acceptability

Dotheoptionsmeetobjectives?

aretheyacceptableto

stakeholders?

Whataretherisks?

Suitability

aretheoptionsadequate

responsestotheassessment

ofthestrategicposition?

Feasibility

Doestheorganisation

havetheresourcesit

needs?

Evaluatingstrategicoptions

Financial analysis

Cashflowforecasts.•

npVandotherperformancemeasures.•

Cost-benefitanalysis.•

Ratioanalysis.•

sensitivityanalysis.•

Expectedvalues.•

shareholdervalueanalysis.•

Valuationofrealoptions.•

Financial analysis

Cashflowforecasts.•

budgetingresourcerequirements.•

abilitytoraisefinance.•

Workingcapitalimplications.•

Foreignexchangeimplications.•

Introduction to strategic management accounting

10 kaplanpublishing

Introduction to strategic management accounting Chapter 1

4 Checking progress towards objectives

Results are compared against stated objectives.•

Action taken to remedy shortfalls in performance.•

This is an ongoing process.•

Strategic planning & control Operational planning & control

Long-term, considering the whole organisation. Short-term, based on a set of assets and

resources.

Match activities to external environment and

identify future requirements

Rarely involves any major change.

High degree of uncertainty. Unlikely to involve major elements of

uncertainty.

Control by monitoring the strategy and how

well objectives are achieved.

Will not lead to changes in strategy.

ACCA Paper P5 (INT) Advanced Performance management - Pocket notes - Kaplan - 2010

Подождите немного. Документ загружается.