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Accounting GM 1401 > GM1403 MASC > Flashcards

GM1403 MASC Flashcards

1
Q

Why reflective writing? (Carlile & Jordan)

A
  1. Adaptive response to change
  2. Professional expertise
  3. Academic discourse, critical thinking and continuing professional development
  4. Deep learning
  5. Construction and dissemination of shared meaning
  6. Self-empowerment
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2
Q

Competence is

A

Knowledge x skills x attitude = competence

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3
Q

Factors influencing the accountant’s involvement in the strategic management process (CIMA)

A

Accountant led factors
Organisational factors
Practicalities

(Accountant + organisational = business knowledge)
(Accountant + organisational + practicalities = ability to add value)

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4
Q

CGMA – Competency framework

A

Technical skills
Business skills
Leadership skills
People skills
Digital skills (influences all other)

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5
Q

What are the Accountant led factors in the CIMA framework?

A

Skill set
- interpersonal
- technical
Desire

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6
Q

What are the organisational factors in the CIMA framework?

A

Position in organisation
Culture
Trust/Credibility
Relationship

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7
Q

What are the practicalities factors in the CIMA framework?

A

Resource capacity
Provision of information
Information systems

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8
Q

(CGMA) Finance professionals add value to the organisation through the process of

A
  1. Assembling information
  2. Generating insights
  3. Influence decision makers
  4. Achieving impact
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9
Q

Different techniques used by SME ? (CIMA,2016)

A

See picture:

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10
Q

Model for reflection (5 steps)

A
  1. Describe the event as if you were a video camera
  2. Feed in additional information.
  3. Reflect
  4. Rethink everything again in the light of later experience.
  5. So what? Did you learn something? Have you discovered anything? Etc.
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11
Q

Strategic management accounting:

A

Provision and analysis of management accounting data
Internally & from competitors
To develop and monitor business strategy.

Prospective
Relative
Out-ward looking
Competitive focus
Proactive
Information oriented

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12
Q

Traditional management accounting

A

Focus on financial targets and a kind of “now” picture

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13
Q

Value based management

A

Focuses on how to increase shareholder wealth, through identifying and managing value drivers

((such as residual income or net present value through the identification and management of value-drivers))

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14
Q

Strategic management accounting differs from Value base management

A

as there is more focus on competitor analysis, and how value is created and sustained

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15
Q

Four components (levels) of Self leadership

A

Intention
Self-awareness
Self-confidence
Self-efficacy

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16
Q

Self-leadership is…..

A

Develop sense for:
-Who you are
-What you can do
-Where you are going
Coupled with the ability to actively influence your
-Communication
-Feelings
-Behaviour

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17
Q

The problems with using MCS techniques such as balance scorecard, benchmark, and budgeting

A
  1. Mostly internal focus
  2. Different techniques
  3. Much focus on costing
  4. Much focus on the past (except budgeting)
  5. Number exercise & accounting tasks
  6. Very hands-on and operational
  7. Today management control area mostly
  8. From strategy to implement tactical & operational
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18
Q

What is needed in order to meet the problems with using MCS techniques?

A
  1. Internal and external focus with benchmarks
  2. SWOT language
  3. Business concept/model and strategy language
  4. Strategy integration and involvement
  5. Value creation
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19
Q

A well-constructed balance scorecard should be able to answer questions such as

A
  • What internal processes should be improved?
  • Which customer should be targeted and how will they be attracted?
  • Additionally, it links measurements on a cause-effect basis. Where improvement of one measurement leads to better performance in other
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20
Q

Strategic vs Traditional management accounting

A

Strategic management accounting recognises
- Strategic choice
- Choice in measures & implementation

Traditional management accounting
- Focused on the analysis of existent activities
- Often “one size fits all”

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21
Q

Three categories for a business model for each piler ? (Bocken)

A

-Value Proposition
-Value creation & Delivery
-Value Capture

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22
Q

Key challenges for designing a business model? (Bocken)

A

One of the key challenges is designing business models in such a way that enables the firm to capture economic value for itself through delivering social and environmental benefits

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23
Q

Business model for sustainability definition? (Bocken)

A

Innovations that create significant positive and/or significantly reduced negative impacts for the environment and/or society, through changes in the way the organisation and its value-network create, deliver value and capture value (i.e. create economic value) or change their value propositions.

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24
Q

The main 3 categorizes in Bocken’s sustainable business model?

A

Technological
Social
Organisational

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25
Q

The 8 pilers ? (Bocken)

A

1-3 Technological
4-6 Social
7-8 Organisational

  1. Maximize material and energy efficiency
  2. Create Value from Waste
  3. Substitute with renewables and natural processes
  4. Deliver functionality rather than ownership
  5. Adopt a stewardship role
  6. Encourage sufficiency
  7. Repurpose for society /enviroment
  8. Develop scale up solutions
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26
Q

Definition of 1st Piler: Maximize material and energy efficiency

A

Do more with fewer resources, generating less waste, emissions and pollution.

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27
Q

Definition of 2nd piler: Create Value from waste?

A

Important to seek and identify and create new value from what is currently perceived as waste.

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28
Q

Definition of 3rd piler: Substitute with renewables and natural processes

A

Reduce environmental impacts and increase business resilience by addressing resource constraints ‘limits to growth’ associated with non-renewable resources and current production systems

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29
Q

Definition of the 4th piler: Deliver functionality, rather than ownership.

A

Provide services that satisfy users’ needs without having to own physical products.

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30
Q

Definition of the 5th piler: Adopt a stewardship role

A

Proactively engaging with all stakeholders to ensure their long-term health and well-being.

(Downstream Stewardship: include proactively tackling the health issues of consumers. This is particularly relevant in the food, beverage and tobacco sectors, where health issues are arising due to modern diets and over-consumption, combined with increasingly sedentary life-styles. The food and beverage sector therefore has an opportunity to enhance public health through actively encouraging a more healthy diet.)

(Upstream Stewardship include the Marine Stewardship Council (MSC, 2012), the Forestry Stewardship Council (FSC, 2012) and the Better Cotton Initiative. Features of such business models are often a supplier accreditation programme that drives more ethical or sustainable business practices at the grass-roots level (often in developing nations).

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31
Q

Definition of 6th piler: Encourage sufficiency

A

Solutions that actively seek to reduce consumption and production.

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32
Q

Definition of 7th piler: Re-purpose the business for society/environment.

A

Prioritizing delivery of social and environmental benefits rather than economic profit (i.e. shareholder value) max- imisation, through close integration between the firm and local communities and other stakeholder groups. The traditional business model where the customer is the primary beneficiary may shift.

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33
Q

Definition of 8th piler: Develop scale-up solutions.

A

Delivering sustainable solutions at a large scale to maximise benefits for society and the environment.

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34
Q

Limitations of Bocken article?

A
  1. Business models are based on historical examples of innovations, though a renewal from time to time might be needed.
  2. High focus on environmental innovations compared to social innovations.
  3. Low quantity of good articles (data) for the research because sustainable business models are emerging in academia.
35
Q

The biological cycle? (F.Ingesson & Mellgren)

A

Represents the flow of biological materials such as food, cotton or wood that can be safely returned to the environment. Central for value extraction in this cycle are cascades. Used products or materials are cascaded into different uses as value extraction degrades them over time. Finally, they are returned to the biosphere to serve as nutrients for living systems, such as soil, which provides the economy with renewable resources. An example would be wood that is firstly used as furniture material, then chipboard, and finally firewood before it re-enters the biosphere as ash. ”

36
Q

The technical cycle? (F.Ingesson)

A

Represents the flow of technical materials such as metals, synthetic chemicals, and plastics. It is vital that these materials do not become waste. They should instead be reused, remanufactured or recycled so that they may re-enter the economy. As the consumption of technical material should be avoided, the customers of these materials should be regarded as users rather than consumers. This article will focus on the technical cycle.

37
Q

4 guidelines to CE (F.Ingesson)

A
  1. Engage in conversation, change the rules.
  2. Build a foundation of knowledge and engage coworkers
  3. Communicate and collaborate with customers and partners
  4. Design the elements of the circular offering.
  • No one-size-fits-all solution!
  • Core question to ask themselves is: How can we as a company, most efficiently, reduce our dependence on virgin material?
  • Product (re) design: the design of the product need to support re-use.
  • Takeback system: How should we return the product to reuse it? Close relationship with customers or a logistic solution?
  • Revenue model: The revenue model should instead be designed to achieve two things. Firstly it needs to decouple the revenue from the dependence on virgin material and secondly, it needs to support the takeback system.
  • It’s vital to understand the customers value in order to make the correct choices!!
38
Q

What is (management) control?

A

Strategies and tools to influence employees, groups, and units to work towards organisational goals.

39
Q

Who works with inter-organisational control?

A

Almost everyone!
Marketing & Sales
R&D & Production
Logistics
Quality management
Legal, finance, and other support functions
Controllers
(Almost everyone)

40
Q

Why do we need inter-organisational control?

A
  1. To manage opportunism/fairness
    - Safeguard against being exploited
    - Profit sharing and pricing issues
  2. To enable efficient exchange
    - Co-ordination of operational exchange
    - Information sharing
    - Knowledge transfer sharing
  3. To align inter- & intra-organisational goals and strategies.
41
Q

What are inter-organisational relationships

A

Interconnections between organisations that allow for economic specialisation

42
Q

Inter-organisational dimensions of relationships?

A

Structural dimensions (hard factors)
Affective dimensions (soft factors)
Temporal dimensions (relationships are not static)

43
Q

What are the structural dimensions of inter-organisational relationships?

A
  1. Activity system (who does what)
  2. Resource distribution (who has what)
    = Product
  3. Interaction patterns
  4. Contracts
  5. Investments
  6. Adaptations
44
Q

What are the affective dimensions of inter-organisational relationships?

A
  1. Trust
  2. Commitment
  3. Norms
  4. Satisfaction and Conflict
  5. Goals and negotiations
45
Q

What are the temporal dimensions of inter-organisational relationships?

A

Longevity
Cumulativity (the importance of history)
Institutionalisation

46
Q

Inter-organisational types of relationships can be

A

Transactional or collaborative

47
Q

Can you, as a company, choose whether you have inter-organisational relationships?

A

No, it’s necessary for efficient allocation of resources and activities. It is not a question of whether you have relationships, but what kind of relationships

48
Q

What determines what kind of inter-organisational relationships you have?

A
  1. Nature of product
    - commodity vs adapted
  2. Importance of the product
    - consequence of loss
  3. Supply market conditions
    - readily available or scarce
  4. Resources to spend on relationship maintenance and development
  5. The counterpart’s interest in us
  6. Our joint history
49
Q

Van der Meer-Kooistra & Vosselman (2000)’s model of phases and transactional relationships

A

Transactional relation
Contact phase
Contract phase
Execution phase

Inter-firm relationship pattern
Market-based pattern
Bureaucratic pattern
Trust-based pattern

50
Q

Van der Meer-Kooistra & Vosselman (2000) - Characteristics of Contingency factors ?

A

Transaction characteristics, transaction environment characteristics and party characteristics.

51
Q

Van der Meer-Kooistra & Vosselman (2000) - Characteristics of Contingency factors based on the different patterns.

A

See pic:

52
Q

Agndal & Nilsson’s extended exchange process?

A
  1. Supplier selection
  2. Concept development
  3. Joint product and/or process design
  4. Deliveries (production)
  5. Price revisions & Product and process redesign.
53
Q

4 Formal joint costs management techniques? (Agndal)

A

Concurrent engineering
Interorganizational cost investigation
Quality-function-price trade off
Kaizen “Value analysis”

54
Q

3 main ways of reducing costs in a joint cost management:

A

(1) to design a product that can be manufactured more cheaply,
(2) to reduce the costs of on- going production, and
(3) to make the relationship as such more efficient.

55
Q

Relationships can be built upon? (Agndal)

A
  1. Emergent relationship development
  2. Strategic relationship transformation
    - Commanding interventions
    - Engineering interventions
    - Teaching interventions
    - Socializing interventions
56
Q

Open Book Accounting (OPA)?

A

(Need of an atmosphere of trust.)

Sharing costs and other accounting information in a supply chain (mostly common suppliers providing customers)

Buyer perspective (why?)

Supplier perspective (why not?)

Incentives (buyer to supplier)

57
Q

Why would suppliers not want to engage in open book accounting? (Agndal)

A
  1. Distrust
  2. Pricing model
  3. Uncertain benefits
  4. Policy
  5. Buyer’s competence (not enough)
  6. Time horizon (taking a risk today, but benefits will come in the future)
  7. Investments required)
  8. Relies on new logics
58
Q

Why do the buyer want to engage in Open book accounting?

A
  1. Cost control
    - Efficient processes (the suppliers)
    - Purchases (are the suppliers-suppliers’ prices fair)
    - Continuous improvements
  2. Price control
    - Avoid overcharging
    - Competitive supply chain
  3. Avoid misunderstandings
    - Concerns both parties
  4. Relieve tension and gain knowledge to
    - Learn about supply chain
    - Use against supplier
59
Q

What incentives can buyers give suppliers to engage in open book accounting?

A
  1. Basic requirement (If you don’t you won’t be our supplier, Volvo says this) Power relationship
  2. Efficiency gains
    - Within relationship (more likely to be selected next
    time)
    - Outside relationship (more competitive when
    competing for other contracts)
  3. Understanding
  4. Relieves tension
  5. Profit margin (if known you could’ve guaranteed the
    profit margin)
  6. Special incentives (promise to)
    - Favoured supplier
    - Longer contract
    - Greater volumes
60
Q

Relationship purchasing strategy (Agndal)

A

Asset specificity
Significant relationship-specific investments
High degree of commitment
Focus on joint benefits

Uncertainty
Few alternative suppliers
High switching costs
Product critical to buyer
Interdependence
Self-regulating behaviour through trust
Cumulatively

A relational purchasing strategy is employed with formally independent suppliers when there are significant efficiencies arising from adaptation, coordination and control that are not possible with market procurement. One aim of relationship-specific investments is long- term inter-organizational cost management

61
Q

Transactional purchasing strategy

A
  1. Asset specificity
    Limited relationship-specific investments
    Low degree of commitment
    Focus on own benefits
  2. Uncertainty
    Many alternative suppliers
    Low switching costs
    Product of limited importance to buyer
    Interdependence
    Opportunism checked by buyer
    No Cumulativity

Transactional purchasing strategy = A transactional purchasing strategy is associated with market procurement. This approach is preferred when the market generates greater efficiencies than are possible through coordinated internal investments. It is also more likely when investment specificities are not offset by the frequency or volume with which a product is needed or by the costs involved in identifying and contracting new suppliers.

62
Q

Read only: Two Scenarios with OPA and the different strategies.

A
  1. With a relational purchasing strategy, information sharing based on an open book policy is intended to support activities aimed at reducing costs in a supply chain, such as joint product development. n that sense, openly sharing data may be the foundation of an inter-organizational management control system enabling, for example, value engineering and continuous improvements/kaizen. Trust building.
  2. With a more transactional purchasing strategy, disclosing data to build trust is arguably less relevant. In this context, the “control” purpose of OBA refers to facilitating the monitoring of suppliers and exerting accountability rather than supporting the planning and coordination of activities within and across organizations. For an open book policy to be likely under these circumstances, we would therefore expect power asymmetries favoring the buyer. Such forced (vs. cooperative) approach also implies that the supplier has to accept forms om accounting communication dictated by the buyer.
63
Q

Techniques for inter-organisational value creation in the Supplier evaluation stage (Agndal)

A

Joint target costing

Open book accounting

64
Q

Techniques for inter-organisational value-creation in the Concept Discussion Stage (Agndal)

A

Cost platform (Often simultaneous with supplier evaluation)

65
Q

Techniques for inter-organisational value creation in the Joint production & process design stage (Agndal)

A
  1. Expected annual price reductions (learning, other efficiencies)
  2. Factors that might change prices (volumes, raw material prices)
  3. Product and process redesign
  4. Simple value analysis and target costing
    (Often costly to change products and processes)
66
Q

Informal use of open books

A

Uses of open books not tied to a formal cost management technique

67
Q

How does the purchasing strategy influence usage and result of open book practises

A

Transactional purchasing strategy
- Cost data is used to reduce purchase price

Relational purchasing strategy
- Cost data supports joint cost reduction

68
Q

Agndal & Nilsson (2010) open book accounting practises expressed in terms of:

A
  1. Nature of data and accounting data disclosure practises
    - Types of data
    - Main cost objects
    - Extent of disclosure
    - Forms of disclosure
    - Direction of data disclosure
  2. Uses of disclosed accounting data
    - Main purposes
    - Specific decisions and activities supported
  3. Conditions of open book accounting
    - Attitudes to cost data disclosure
    - Incentives to disclose data
69
Q

What should not be underestimated in regard to OPA? (Agnedal)

A

The cost.

Read text:

”Till exempel betonar representanter för ReTailer att deras begränsade resurser tillåter dem att endast driva ett fåtal projekt åt gången och att implementering av ett allmänt system med öppen bokföring tar tid och kräver betydande investeringar. Även om OBA bör ses som ett sätt att minska förhands-och efterhandskostnader, kan implementering och användning av systemet därmed också generera stora transaktionskostnader.”

70
Q

Direct relationship and pros? (Alenius)

A

Interdependencies - You show your book to another company and they show them yours. Doesn’t only have to be cost management, but also could one company want to make the other company more efficient which in turn will help both with cost reducations.

71
Q

Indirect effects of OBA? (Alenius)

A
  • Could use information from OBA as a benchmark for negotiations with other (new) suppliers.
  • Another example of accounting for indirect effects is when Food Store used the other supplier relationships to identify areas for improvement and managed to use the market forces to put pressure on Meat Raw.”
72
Q

Key role of OBA according to Alenius?

A

”We believe that the key role of OBA is that it works as a catalyzer and points out areas for improvement and therefore areas where actors can learn how to develop and use resources more effectively.”

73
Q

Indirect relationship from a managerial perspective (Alenius):

A

”From a managerial perspective we believe it is of considerable importance to acknowledge the importance of indirect relationships. If a firm strives to increase revenue or to cut costs, the effects of these efforts will be leveraged provided that the focus is on indirect relationships and their resource interfaces. For example, the leverage of using the price mechanism will be a more powerful tool if it is applied through the embedded relationships instead of only within the direct ones.”

74
Q

Enabling control? (Cäker)

A

Employees are flexible, knows/learns how the system works (repair the systems etc), trust that people are fulfilling the systems.

75
Q

Socialising accountability? (Cäker)

A

-Face-to-face communication
- It’s harder to “hålla minen” if you have done or planning to do something unethical with socialising accountability.

76
Q

Hierarchical Accountability? (Cäker)

A

-Contrast to social accountability

  • We might prioritise showing good instead of being good.
  • Overall goals aren’t prioritized over my own goals. “Don’t risk lending my employees to you because then there’s a risk, I will miss my set goals.”
77
Q

Organisational approach to accountability, problem and solution? (Cäker)

A

Hierarchical accountability is dominating in organisation because of high self-interest from employees and sub-managers.

Solution? At the after-works or business trips superior managers wants to skip the “performance talk” and involve the other managers in discussions without involving the “numbers”.

78
Q

Internal transparency, Flexibility, Repair and Global Transparency? (Cäker)

A

IT= Regular meetings for discussing the focus “KPI:s” for example.

Flex= It’s not important that you don’t have good numbers, but it’s important to know why it’s bad and what you’re going to do about it.

Repair = A yearly meeting for discussing if a need in KPI:s or PI is needed. PI changes all the time but the KPI:s only change if you have a good reason for it.

Global Transparency = You don’t only contribute to your own division and KPI, but also at least one other divison, to create a better holistic view over the company.

79
Q

Superiors’ managers control?

A
  • Accountability perspective is that if a manger fails, then it’s the superior managers fault of putting that manager in that division in the first place.

(Column 2 Enabling design (How managers could support the divisions, BRM e.g.,)

(Column 3 (How we trigger the enabling design, how managers should gå tillväga or use the design)

80
Q

3 Limits of accountability?

A

Opaque selves selves, mediated selves & exposed selves.

81
Q

Opaque selves?

A

When we can’t explain ourselves – we don’t know why we did it. “I have a hunge, a feeling and did it”.

Companies don’t like this – if it works, fine! But otherwise no.

Auditor example: If put 5 hours extra to investigate and find something – then its good but otherwise it will be problematic.

82
Q

Exposed Selves?

A
  • Performative perspective!
  • Choose between showing good or doing good.
  • Demand for accounts changes how we act.
83
Q

Mediated selves ?

A
  • The ways in which we can account are limited

2 problems:
Too few opportunities (ways to account) – we have more things we would like to show but cannot do this because of the lack of time or opportunities. “We know it looks bad in the report right now, but in next year it will look good “

Too many ways to account. You as an employee – you have to choose to be a good colleague, be cost efficient or this this this this this… We are offered more ways to account but this causes stress and you have a hard time to prioritize and you want to succeed in every accounting way but it’s not possible.

84
Q

What to do about the limits of accountability?

A

See pic:

Accounting GM 1401 (3 decks)

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