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

Подождите немного. Документ загружается.

Approaches to budgets

Approaches to budgets Chapter 3

kaplanpublishing 51

Performance evaluation

usingabudgetforperformance•

evaluationcanincreasethe

emphasisonachievementof

targets.

itcanalsoincreasethepotential•

fordysfunctionalperformance.

individualsmayconcentrate•

ontheitemsmeasuredand

rewardedtothedetrimentof

otheritems.

unmeasuredaspectsofthejob•

maybeneglected.

Managerial style

Therearedifferentmanagement•

stylesofbudgetuse:

– budget-constrained,afocus

 onachievingshort-term

 budgettargets

– profit-conscious,afocusis

 onachievinglonger-term

 budgettargets

– non-accounting,where

 performanceevaluationis

 notlinkedtobudgetary

 targets.

Approaches to budgets

52 kaplanpublishing

Notes:

Changes in business

structure and management

accounting

In this chapter

The relevance of traditional management •

accounting.

Performance management in different •

business structures.

Business integration.•

Business process re-engineering.•

Activity-based management.•

Staff empowerment.•

chapter

Changes in business structure and management accounting

54 kaplanpublishing

Changes in business structure and management accounting Chapter 4

You need to be able to assess and discuss the relationship between business structure and

management accounting requirements. This may be in the context of a case study.

The relevance of traditional management accounting

Exam focus

Changes in

the business

environment:

Competition•

globalisation•

increased•

complexity

increased•

risk.

newapproachestostrategic•

planning.

awarenessoftheneed•

forclear,sustainable

competitivestrategy.

agreateremphasisonquality.•

adriveforcostreductions.•

useofgreaterautomation•

inmanufacturingsystems.

aneedforgreaterflexibility.•

anincreaseinthestrategic•

significanceofiTandis.

aswitchtomoreflexible•

organisationalforms.

new•

management

accounting

practices.

Changes•

toexisting

practices.

lessrelevance•

oftraditional

methodssuch

asstandard

costing.

leadingto

Changes in business structure and management accounting

Changes in business structure and management accounting Chapter 4

kaplanpublishing 55

Performance management in different business structures

Functional organisations Divisional organisations

Information needs Centralised.•

Performance information required •

by top of organisation for planning

and control.

Data aggregated at the highest •

level before feedback given.

Decentralised.•

Greater participation lower •

down the organisation.

Information needs to be •

available lower down

organisation.

Advantages for

performance

management

Easier to assess and control •

performance of functions.

Easier to assess divisional/•

SBU performance.

Performance management •

can be tailored to local needs.

Problems for

performance

management

Difficult to assess performance of •

individual products or markets.

Unsuitable for diversified •

organisations.

Transfer pricing issues.•

Issue of allocation of central •

costs.

Potential problems with lack •

of goal congruence.

Changes in business structure and management accounting

56 kaplanpublishing

Changes in business structure and management accounting Chapter 4

NETWORK

ORGANISATION

Controlis

exercised

through

shared

goals

information

isneededby

thecore

company

systemsneed

tofacilitateco-

ordinationand

communication.

Organisational

structure

isatter

Eachparty

needsfeedback

onitsrelative

performance

Changes in business structure and management accountingChanges in business structure and management accounting Chapter 4

kaplanpublishing 57

Business integration

Business integration means that all aspects

of the business must be aligned to secure

the most efficient use of the organisation’s

resources so that it can achieve its objectives

effectively.

Processes are viewed as complete entities

from initial order to final delivery.

Definition

Changes in business structure and management accounting

58 kaplanpublishing

Changes in business structure and management accounting Chapter 4

Porter’s value chain

The value chain model

Shows how each activity adds to competitive advantage.•

Emphasises linkages and critical success factors within activities and for the value chain as a •

whole.

The value chain

Firminfrastructure

humanresourcemanagement

Technologydevelopment

procurement

Operations service

primaryactivities

support

activities

inbound

logistics

Outbound

logistics

Marketing

andsales

Changes in business structure and management accounting

Changes in business structure and management accounting Chapter 4

kaplanpublishing 59

BPR PROCESS

identification•

rationalisation•

redesign•

reassembly.•

Business process

re-engineering (BPR)

Business process re-engineering is the

fundamental rethinking and radical redesign

of business processes to achieve dramatic

improvements in critical, contemporary

measures of performance, such as cost,

quality, service and speed.

Improved customer satisfaction is often the

primary aim.

Definition

Changes in business structure and management accounting

60 kaplanpublishing

Changes in business structure and management accounting Chapter 4

Advantages Criticisms

Focused on customer needs.•

Provides cost advantages.•

Asks radical questions about •

how processes can be

improved.

Focused on entire processes •

across functional boundaries.

Elimination of unnecessary •

activities.

Common misconceptions of BPR:•

that it is just about making small changes to existing –

processes

that it is a cost-cutting exercise. –

BPR requires major commitment by the whole organisation.•

Needs a focus on the entire process to avoid efficiency •

in one department being improved at the expense of the

whole organisation.

Attention can become diverted from competitors activities •

and market developments.

Some implementations of BPR have just been about •

automation rather than redesign of processes.

Activity-based management

Activity-based costing (ABC)

The practice of attributing overhead costs to products in a manner linked to the activities that •

give rise to the overhead costs (cost drivers) and how far those activities relate to cost units at

the product and batch level.

Definition

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

Подождите немного. Документ загружается.