Session 7: Accounting, Innovation and Strategic Planning Flashcards
There are 3 philoophies that have shaped design and content of management accounting today which are?
1) Taylorism
2) Toytotism
3) The ‘strategic turn’
What is Taylorism?
Workers focus on one task.
It was crtiqued for dehumanising humans ( considered machines) and hardly transferable ( requires specific employees)
What is toyotism?
This was born after taylorism and was the equivalent to what taylorism was in the 19 century.
It docused on culture of labour management cooperation, mulit-skilling and cross divisional problem solving. Culture was key for sucess as opposed to taylorism. Production was mainly on J.I.T basis to respond to more customer demand.
What was the strategic turn?
In the beginning of the 21st century there were increasing calls for protizing strategic thinking and for adapting all organizational activities to the strategic goals formulated.
Do most people do strategy wrong?
Yes they take a simplistic approach, thus giving bad results, it isnt about being the best but its about being unique, it takes time.
What are the different dimensions you can see strategy from according to Henry Mintzberg?
the 5ps
1) Strategy as plan - Swot analysis
2) Strategy as a pattern - what is sucessful in the past can lead to sucess in the future
3) Strategy as a position - how you position yourself in market
5) Strategy as a ploy - getting the better of competitiors e.g dropping prices
6) Strategy as perspective - ideological perspective of the organisation.
What is a swot analysis and what p does it focus on?
Strengths Weaknesses Opportunities Threats. - can help formulate a plan that forumates an effective strategy.
What is porters 5 forces?
Analysed 5 factors to analyse profitability and attractiveness of an industry and compeitive intensity of industry.
What are the 5 forces ?
What are some properties of each of the components of porters 5 forces?
How is management accounting different to strategy accounting?
1 Management accounting is said to be focusing on what happens inside the organisation, whereas strategy accounting is said to be outward looking.
However, management accounting techniques do what?
1) help implement strategies efficiently
2) allow the measurement of market performance ( customer profitability profiles)
3) allow the control of external parties ( suppliers)
So what is strategic management accounting?
SMA - A form of management accounting in which emphasis is placed on information which relates to factors external to the firm.
What are traditional management accounting techniques and how is strategy seen, do the same for strategic management accounting?
What 2 strategic management techniques are we going to look at ?
Business plans
Life cycle costing
Bascially there are 5 stages, where you are always incurring costs, Pre market stage( not in the market), introduce into the market, growth, maturity and decline. If you have say intangible assets you might be in the negative profit area, and not look at the horizon of the product cycle, and so not go on with a product, as in the short term it will not make you profit, Also when deciding between 2, one might be cheaper than the other in the short term but in the long run its expensive.
what are the 4 aspects of BSC?
Identify the annual fixed costs in year 1, one time fixed cost and year 2 costs? What is the cost of the very first customer? We are trying to find out whether elizabeth should go along with venture.
You have to add depreciation to the costs, based on assumption.
Cost very first customer = VC + FC.
What are the variable costs per sale? and is the total variable costs for each scenario?
Find contribution per unit and the amount of sales in year 1 and year 2.
Lets do some sensitivity analysis for the 2 scenarios workout net profit/loss?
Can elizabeth make her decisiion.
Yes … in theory, and supposing that all the costs
have been taken into account!
( remember total revenue can be calculated as CM per customer x number of customers)
