Cost Management and Strategic Decision Making Chapter 1
Provide management with information to evaluate the impact of current or proposed strategic and operational activities Create more value at less cost Minor role – measure and report costs that have already occurred The Role of Management Accounting
Strategy and information support Provide information and guidance Evaluate alternatives Cost management vs. cost cutting Value inventory Functions of the Management Accountant
Characteristics of the Management Accountant Team player Visionary Long-term focus Understands quantitative and qualitative aspects Self-guided Understands causality of costs Ethical
IMA Standards of Ethical Conduct Competence Continues education, follows laws, rules and standards, provides clear, complete information, recognizes and communicates own professional limitations Confidentiality Maintains and enforces confidentiality of information, refrains from using confidential information for unethical advantage
IMA Standards of Ethical Conduct Integrity Avoids conflicts of interest, outside influence, unethical conduct, subversion of organization objectives, activities that would discredit the profession Credibility Communicate information fairly and objectively, disclose all relevant information, disclose delays or deficiencies in information, timeliness, processing or internal controls
Identifying Competitive Advantages SWOT analysis Internal Strengths Weaknesses External Opportunities Threats
Identifying Competitive Advantages Value chain analysis Focus on improving customer’s perceived value Should not just look inward The way we do things is only a part of the chain How do we make money Cost vs. profit strategic business units (SBUs) Do we outsource?
Fostering a Culture of Improvement Identify a need or opportunity for change Get help Create a vision and strategy to achieve it Communicate in both directions Highlight achievements Learn from mistakes Do not fear or penalize failures