GM1403 MASC Flashcards
Why reflective writing? (Carlile & Jordan)
- Adaptive response to change
- Professional expertise
- Academic discourse, critical thinking and continuing professional development
- Deep learning
- Construction and dissemination of shared meaning
- Self-empowerment
Competence is
Knowledge x skills x attitude = competence
Factors influencing the accountant’s involvement in the strategic management process (CIMA)
Accountant led factors
Organisational factors
Practicalities
(Accountant + organisational = business knowledge)
(Accountant + organisational + practicalities = ability to add value)
CGMA – Competency framework
Technical skills
Business skills
Leadership skills
People skills
Digital skills (influences all other)
What are the Accountant led factors in the CIMA framework?
Skill set
- interpersonal
- technical
Desire
What are the organisational factors in the CIMA framework? (4)
Position in organisation
Culture
Trust/Credibility
Relationship
What are the practicalities factors in the CIMA framework?
Resource capacity
Provision of information
Information systems
(CGMA) Finance professionals add value to the organisation through the process of
- Assembling information
- Generating insights
- Influence decision makers
- Achieving impact
Different techniques used by SME ? (CIMA,2016)
See picture:
Model for reflection (5 steps)
- Describe the event as if you were a video camera
- Feed in additional information.
- Reflect
- Rethink everything again in the light of later experience.
- So what? Did you learn something? Have you discovered anything? Etc.
Strategic management accounting:
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
Traditional management accounting
Focus on financial targets and a kind of “now” picture
Value based management
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))
Strategic management accounting differs from Value base management
as there is more focus on competitor analysis, and how value is created and sustained
Four components (levels) of Self leadership
Intention
Self-awareness
Self-confidence
Self-efficacy
Self-leadership is…..
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
The problems with using MCS techniques such as balance scorecard, benchmark, and budgeting
- Mostly internal focus
- Different techniques
- Much focus on costing
- Much focus on the past (except budgeting)
- Number exercise & accounting tasks
- Very hands-on and operational
- Today management control area mostly
- From strategy to implement tactical & operational
What is needed in order to meet the problems with using MCS techniques?
- Internal and external focus with benchmarks
- SWOT language
- Business concept/model and strategy language
- Strategy integration and involvement
- Value creation
A well-constructed balance scorecard should be able to answer questions such as
- 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
Strategic vs Traditional management accounting
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”
Three Elements for each piler ? (Bocken)
-Value Proposition
-Value creation & Delivery
-Value Capture
Key challenges for designing a business model? (Bocken)
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
Business model for sustainability definition? (Bocken)
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.
The main 3 categorizes in Bocken’s sustainable business model?
Technological
Social
Organisational
The 8 pilers ? (Bocken)
1-3 Technological
4-6 Social
7-8 Organisational
- Maximize material and energy efficiency
- Create Value from Waste
- Substitute with renewables and natural processes
- Deliver functionality rather than ownership
- Adopt a stewardship role
- Encourage sufficiency
- Repurpose for society /enviroment
- Develop scale up solutions
Definition of 1st Piler: Maximize material and energy efficiency
Do more with fewer resources, generating less waste, emissions and pollution.
Definition of 2nd piler: Create Value from waste?
Important to seek and identify and create new value from what is currently perceived as waste.
Definition of 3rd piler: Substitute with renewables and natural processes
Reduce environmental impacts and increase business resilience by addressing resource constraints ‘limits to growth’ associated with non-renewable resources and current production systems
Definition of the 4th piler: Deliver functionality, rather than ownership.
Provide services that satisfy users’ needs without having to own physical products.
Definition of the 5th piler: Adopt a stewardship role
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).
Definition of 6th piler: Encourage sufficiency
Solutions that actively seek to reduce consumption and production.
Definition of 7th piler: Re-purpose the business for society/environment.
Prioritizing delivery of social and environmental benefits rather than economic profit (i.e. shareholder value) maximisation, 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.
Definition of 8th piler: Develop scale-up solutions.
Delivering sustainable solutions at a large scale to maximise benefits for society and the environment.
Limitations of Bocken article?
- Business models are based on historical examples of innovations, though a renewal from time to time might be needed.
- High focus on environmental innovations compared to social innovations.
- Low quantity of good articles (data) for the research because sustainable business models are emerging in academia.
The biological cycle? (F.Ingesson & Mellgren)
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. ”
The technical cycle? (F.Ingesson)
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.
4 guidelines to CE (F.Ingesson)
- Engage in conversation, change the rules.
- Build a foundation of knowledge and engage coworkers
- Communicate and collaborate with customers and partners
- 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!!
What is (management) control?
Strategies and tools to influence employees, groups, and units to work towards organisational goals.
Who works with inter-organisational control?
Almost everyone!
Marketing & Sales
R&D & Production
Logistics
Quality management
Legal, finance, and other support functions
Controllers
(Almost everyone)
Why do we need inter-organisational control?
- To manage opportunism/fairness
- Safeguard against being exploited
- Profit sharing and pricing issues - To enable efficient exchange
- Co-ordination of operational exchange
- Information sharing
- Knowledge transfer sharing - To align inter- & intra-organisational goals and strategies.
What are inter-organisational relationships
Interconnections between organisations that allow for economic specialisation
Inter-organisational dimensions of relationships?
Structural dimensions (hard factors)
Affective dimensions (soft factors)
Temporal dimensions (relationships are not static)
What are the structural dimensions of inter-organisational relationships? (hard factors)
- Activity system (who does what)
- Resource distribution (who has what)
= Product - Interaction patterns
- Contracts
- Investments
- Adaptations
What are the affective dimensions of inter-organisational relationships? (soft factors)
- Trust
- Commitment
- Norms
- Satisfaction and Conflict
- Goals and negotiations
What are the temporal dimensions of inter-organisational relationships? (Relationships are not static)
Longevity (livslängd)
Cumulativity (the importance of history)
Institutionalisation (normer i företaget)
Van der Meer-Kooistra & Vosselman (2000)’s model of phases and transactional relationships
Transactional relation
Contact phase
Contract phase
Execution phase
Inter-firm relationship pattern
Market-based pattern
Bureaucratic pattern
Trust-based pattern
Van der Meer-Kooistra & Vosselman (2000) - Characteristics of Contingency factors ?
Transaction characteristics, transaction environment characteristics and party characteristics.
Van der Meer-Kooistra & Vosselman (2000) - Characteristics of Contingency factors based on the different patterns.
See pic:
4 Formal joint costs management techniques? (Agndal)
Concurrent engineering
Interorganizational cost investigation
Quality-function-price trade off
Kaizen “Value analysis”
Superiors’ managers control? (Cäker)
- 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)
Opaque selves?
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.
Exposed Selves?
- Performative perspective!
- Choose between showing good or doing good.
- Demand for accounts changes how we act.
What to do about the limits of accountability?
See pic:
MECH and digitalisation? Read only.
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Integrated control system typology ? (Peter)
Designed sustainability strategy (Low, Low)
- A company may follow a reactionary sustainability strategy that incurs additional costs to respond to external stakeholder pressure, without developing a business case for sustainability. A sustainability strategy that focuses on managing a company’s reputation is also consistent with this cell
Reconcevied product and market sustainability focus (High,Low)
- An organization with this configuration is likely at an early stage of maturity and focused on developing sustainability-related products and services, similar to the “sustainability-driven strategy” configuration. This configuration is largely consistent with a paradoxical frame that views sustainability concerns as an end in themselves. Under this configuration, the organization might not yet have well-developed systems for collecting diagnostic information about sustainability metrics related to its value chain.
Value chain-driven sustainability focus (Low, High)
- Corresponds to the situation at MECH from 2005 to 2018. During this time period, the organization had an internal focus on improving performance on sustainability metrics related to the firm’s value chain, consistent with the responsible business case. The company did not have a strong focus on external demand drivers for its portfolio of sustainability-related products, except for the limited cases of the automotive, aerospace, and wind energy industries.
Integrated sustainability strategy (High, High)
- Able to support an “integrated sustainability strategy” MECH began moving toward this strategy in 2018, with the development of fee-based contracts that incorporate digitalization technology and respond to customer demand for cost-effective products that reduce carbon dioxide emissions and other environmental impacts.
1st dimension of the framework from Hansen?
SBSC HIERARCHY
Strictly hierarchical = Most dominant perspective. SBSC supports decisions requiring trade-offs and is seen as the appropriate design for a ‘strategy scorecard’ It may be the case that trade-offs tend to favour short-term financial performance too strongly. Maximizing approach?
Semi hierarchical = The semi-hierarchical SBSC is rooted most strongly in social/political and normative theory. From a ‘maximizing’ to a ‘satisficing’ approach in which decisions ‘‘will ensure an out- come that is at least minimally satisfactory along all dimensions’’ Two modifications: Cause & effect chain & Broadening of the financial perspective from a focus solely on the financial bottom line of organisational performance to the triple bottom line
Non-hierarchical (network) = Try to balance (weighting) strategic goals and uses loops, mulitpul strategic objetives at the same time. Arguing against a linear cause-and-effect chains. Wants to deliver at more holistic view.
What are the 4 motivations toward sustainability which are brought up in the article of Schaltegger et al. (2018). ?
1st: The protection of the existing way of doing business and short-term financial interests of the company. High self-interest or self-seeking.
2nd: By the narcissistic concern to protect the reputation of a company and the managers themselves.
3rd: Seeks to embed social and environmental concerns within the performance management systems of a business.
4th: Seeks to go beyond the boundaries of the entity and create a dialogue with those who are vulnerable to the unintended and unacknowledged conse- quences of corporate conduct.
OctoPussy from Peter?
See Pic:
Read: Business Model innovation
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Digitalisation vs. Digital Technique ?
Digital Technique= it’s about the 1s and 0s, coding etc.
Digitalisation = Automize, inform, transform, visualize, analyze. What you do with the technology! Not only the new technology. It has to add value to people.
Description from picture:
1.Mobility: Workspace – you can work from home – creates freedom.
2. Storing in the cloud.
3. Social media.
4. Internet of things: Connects systems, companies with customers etc.
5. Big Data – A lots of data, what the technology allows.
6. Data analytics – What they do with the data.
7. Artificial intelligence – Intelligence of the machines.
8. Machine learning – Machine doesn’t need us any longer. They learn by themselves.
9. Blockchain - Crypto.
How to measure success in a digital world?
See pic:
The theory of enabling control? 4 design charactheristics.
Repair: In the event of a breakdown, the employee is invited to fix the problem or not? E.g. if the writer breakdown, can the employee fix it by himself or does he need help?
Internal transparency: The main outcome of the theory – everyone should understand how something works. Could be about the system itself and operations.
Global transparency – we can never have a perfect system. Employees will always act somewhat on own behalf.
Flexibility – if the system doesn’t fit us, we have the choice to terminate/disregard it.
Formalisation in an organisation?
With good formalization we should feel good because everything around me works and thus I can do a good work as well. See pic for more info:
Management control and stress? (Behavioural)
You have to have a good balance for enabling control (for the employees). Too much empowerment could be bad? Link to mediated selves.
SBSC Strategy Map (Hansen)?
See Pic:
