cpa104 (author: laikwan)

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DESCRIPTION Question:M1:1-15; M2:16-34; M3:17-54; M4:55-66; M5:67-85

Mgt accounting attempted to satisfy internal needs using financial info in dev phase

Traditional purpose of mgt accounting-1 Score keeping,2 attention directing 3 Problem solving

Mgt accounting provide managers with appropriate information (internal) customers

Mgt functions&a/c support: Plan, Control, Direct, Communicate, Coordinate & Decision-making

Mgt a/c activity example-Score Keeping, Attention directing & Problem solving

Mgt accountant-identify & record evolving roles and functions in contemporary workplace

Advisory services:1 opinions tendering 2 assisting making evaluation 3 dev norm or objective

Information services:1 historical information 2 future-oriented information

Mgt accounting three factors-compliance; control & competitive support

Compliance-compliance with external regulation & rept requirement

Control-prov independent oversight of the use & conservation of resources

Competitive support-financial & non-financial services to mgt team to enhance competitiveness

Corp Governance: a set of relationships between co's mgt, board, shareholder & stakeholders

Sydney Electricity-Role of mgt a/c in an empowered organisation 'info need of mgt change'

Mgt accountants task-compliance; control & competitive support

Mgt a/c significance factors in analysis mgt a/c work summarised-compliance;control;support

Mgt accountant role in organisation on difference type, size, structure and form of ownership

Mgt a/c function is essentially the same

Manufacturing & services difference-change nature of mgt a/c work

Dysfunctional behaviour-manager pursue own goals to detriment of organisation's goal

Decision-making: responsibility will respond well to having decision-making delegated

Mgt a/c prodcutes info help managers & executives in organisation make better decisions

Mgt a/c-positive role of supporting the financial needs of mgt in directing & controlling business in the best interest

Australian economy-changes 1800-2000

Global markets-reductions in trade barriers, improved IT resulted freeing up of markets

Global firm:legal&political environment 2 economic/competitive environment 3 national culture

Manufacturing & services organisation consideration factors-peculiar for Manu & service co

Sustainable development-maintaining dwindling supply nature resources for future generations

Charges & taxes

Smorgon Steel-recycling scrap ferrous products

Mgt accountants involve 'the design & operation of financial advisory & information sys in organisational setting & mgt of the functional area

Certified Mgt Accoutnants: survey future mgt accountant a lower % on data collection & financial statement preparation a higher % on financial analysis

Motivation: People often motivated to improve their performance by 1 affect design & operation mgt a/c sys 2 participative budgeting

Budget-'bottom up' better then 'top down' budget, Internalised better for motivational purposes than externally-imposed goals

Performance evaluation: motivation to reach or better of performance 1 clear performance expected 2 performance measured consistent with the standard, objective & unambiguous 3 conferral of reward is clearly linked

Mgt accounting activity adds value in 5 objectives-info,assist directing & control: 1 proactively as part of mgt team 2 assisting managers in directing & controlling; 3 motivating managers & other employees; 4 measuring activities performance; 5 assessing organisation's competitive position

Mgt a/c: recognises the weakness in omitting strategic aspects, observing 1 support sys 2 financial info & control 3 advice & participation;4 mgt functional area that overlooks any reference to a leading role

Mgt a/c-is changing: 1 world economic & social structure 2 globalisation of mkt; 3 environmental issues; 4 IT dev 5 importance of quality; 6 customer-focused

Business environments: 1 truly integrated world economy is emerging 2 global co no ties to any locations changing the rule of economic games 3 Asia is new economic powerhouse 4 production transormed

Economic structures-Asia-Pacific region major growth are in world trade primary resource people gained competitive advantage

Int'l trade policy changes: tariff protection reduced, business globally competitive defend domestic mkt against foreign competitors

Environmental protection authorities: cost associate 1 penalties 2 future liability 3 land degradation 4 water availability

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Subsidies & tax concessions

Financial enforcement incentives

Deposit refund systems

property rights & mkt creation

Economic instruments:

Environmental issues: 'corp environmental concerns' ISO14000 standard provide co guidelines

Body Shop-Oppose animal testing, fair trading relationship&campaign human rights world-wide

Environmental mgt ays-Arguments & against, Implication for co,community & mgt a/c

Technology-improvement innovation & dev in research, product design, prod, distribution..

Production technology-EDI, computer Aided Design,E-commerce, Robotics&Digital camera

Technology development affected Mgt a/c

Quality-adding value to a product & reducing the costs of producing the product

Mgt principles-endures as a valid guide to quality reform in business

Quality accreditation-ISO 9000 accredited supplier adopted by AU firms

TQM-customer focus, total involvement & continuous improvement

Quality influence practice of mgt a/c

Competitive advantage: advantage over competitors, constituted product in consumers' eyes

Value chain-basis for strategic cost analysis and cost mgt generally

Quality of design-product or service meet customers needs

Rise & Fall of mgt a/c-arguments traditional costing; technological advance….

Japanese mgt a/c sys-support and reinforce corp strategies & not hamstring by financial rept

Mgt a/c sys1customer focus2value chain3key success factor4continuous improve&benchmark

Mgt a/c-key themes driving change

New Age corp-middle mgt & employees move to specialist firms supply service (outsourcing)

Accountability & responsibility- foster accountability for financial results by all manager

Team based structures-1 Temporary 2 permanent 3 Entrepreneurial self-managing

Organisational culture-consists of prevailing beliefs, value, symbols & ritual characterise

Changes in business environment & implication for mgt a/c

Strategic-mgt model-example of strategy formulation/implementation/evaluation

Outsourcing-advantages and disadvantages

Int'l Mgt-managers need to skilled in managing across national boundaries

Human resources mgt- Flatter organisational, decentralised decision making & less practices

Employee empowerment: employees valuable contributors to decisions regarding their work

JIT & IT dev, value-add mgt, continuous improvement, benchmarking, TQM

ABC: not volume which drove overhead costs but activities undertaken

Backflush costing: recording charges unites of finished good appear

Value engineering involves a systematic evaluation of all aspects or R&D

Target costing: targeted profit; target profit margin from the target price

Kodak-TQM

Mgt actions & philosophies to be considered; Areas of mgt action

Organisational & mgt changes in contemporary business environment influenced mgt a/c

Mgt activities needed to succeed in contemporary business

Strategic role, critical success factor, long vs short-term, measurement & rept

Strategic role of mgt a/c-define strategic business & mkt segments

Critical success factors-co perform successfully or risk not being able to compete successfully

Medical centre critical success factors

Long-term vs short-term horizons-incorporate financial & non-financial indicator performance

Measuring & reporting of performance-guide of top Mgt wish to measure and rept

Strategic mgt a/c 'evaluate enterprise's competitive advantage or value added relative to competitors'

Strategic mgt a/c 'externally focused final goods mkt, make profit & encounter competitors'

Mgt recognised need to undertake restructuring to develop organisations: 1 dynamic mkt 2 flexible & adaptable to change 3 customer-focused

Decentralised divisional structure-more effective in decentralised in diversify industries: decentralised divisional structure base on products or mkt has replaced the functional form

Strategic mgt-assessed external environment & formulation, implementation & evaluation of strategies to achieve overall objective of the organisation

Organisational structures to be supplemented by more flexible work practices & highly skilled employees as new IT eliminated old job categories & created new ones

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Strategic mgt a/c 'provision of financial info on product mkt & competitors' cost & structures

Strategic mgt a/c emphasis on info related to factors external to firms & non-financial info

Strategic mgt a/c provide info concerning mkt competitors on internal data strategic perspective

Framework for mgt a/c in next decade and beyond

Strategic mgt a/c definition-external industry & market factors & consideration of internal issue

Mgt accountants revised role-spend less time dealing with financial a/c, audit & tax

Mgt a/c: skills as key prerequisites for a/c graduates. Technical a/c skills no longer sufficient

Strategic management-carries the strategic planning process one step further

Strategic-1 strategic analysis 2 strategic choice 3 strategy implementation 4 evaluation & control

Strategic-Mgt model-Dev mission>audit>long-term objective>select strategies>policies

Goals are open-ended statements: Objective ^% annual profit; Goals Increase profitability

Strategic mgt focus on objectives rather than goals

Strategic mgt: qualitative objective ex. To be a 'responsible community member'

Time-related - state time period over the objective: ex. Achieve 5% ROI in 5 years

Context of the actual business environment at the time of their setting-internal & external area

Strategic mgt benefit-1 clearer sense,2 sharper focus,3 understanding changing environment

Functional objective and strategies

Corporate strategy-mission statement 3 elements:Co Vision, philosophical value,key goals

South Pacific Tyres-Int'l successful tyre co through attaining world class performance in…..

Miss Maud-Totally customer-driven organisation with the impetus for every initiative …….

Mission statement-profit 'increasing shareholders' wealth' &not-for profit accountability funds

Growth strategy - existing businesses & product line or new business & product or markets

Stability strategies-pause & take stock before continuing proactive strategy or continue oper

Retrenchment strategy-quick cutback on costs to stop rapidly declining profitability (sell-off)

Strategy build int'l building material group: growing int'l

Strategic analysis-consideration external environment, customers, supplies, IT, competitors & political

Evaluating the external factors-identify critical success factors & treats might jeopardise future

Dimensions of geographic growth vector

Threats & opportunities-external environment for organisation to gain detailed understanding

Strategic mgt tool: 1 New entrants 2 Buyers 3 Suppliers 4 Substitutes 5 Industry Competitors

New Entrants-threat to the current competitor's ability to generate desired financial returns

Economies of scale-High-volume competitors generate cost reduction discount fm suppliers

Product differentiation-brand names & trademark make it difficult for a new entrant establish

Capital requirements-some co need high capital investment to deliver service

Switching costs-current competitors' product high cost to changing to an alternative

Access to distribution channel-New entrants difficulty distributing goods & services

Gov't policy: Gov't restrict new entrants through licensing restrictions

Bargaining power of buyers-returns that competitors can expect in an industry by bargaining

Bargaining Power of suppliers-suppliers can affect the returns to any competitors

Threat of substitute products or services-direct substiture&substitute fulfils same need

Australian airline industry analysis Porter's five forces

Record studios go the way of rhino-digital technology 'home' proj studios chg recording ind.

Int'l societal environments - Economic,Technological,Political-legal&Sociocultural

Australian specialty cheese industry-Compare current situations with competitors EX2.4

Strategic mgt a/c: emphasis of son external industry & mkt factors & a consideration of internal issues impacted by the factors

Mgt accountant new skill: familiarity with business, interpersonal skills, leadership skills, analytical skills, understanding & speaking & presentation skills

Strategic mgt 3 level-1 Corporate strategy: overall direction 2 Business strategy: industry or mkt strategic 3 Functional Strategy: key functional areas strategy

Objective & strategies: business definition not in name, statutes or articles of asso of the mission & purpose make possible clear & realistic business objectives

CSF:1 Control mechanisms of mgt control sys 2 measured mangers performances 3 reward & incentive sys to motivate

Rivalry among existing competitor: intense rivalry-competitors amt,rate of industry growth, fixed cost,capacity, exit barriers

PEST analysis:-Political, Environmental, Social,Technological: external analysis not only industry analysis also general society change 1 political-legal 2 economic 3 sociocultural 4 IT

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Internal appraisal-identifying strengths & weaknesses-durability & limitability

Life cycle: Product stages 1conception 2introduction 3growth 4maturity 5decline 6abandonment

Cash cows: high market share of slowly growing products to be large generators of cash

Growth/share matrix - competitive position: Cash cows, Stars, Questions marks, Dogs

Question marks either problems/beneficial: further investment increase to star or withdraw cash support slip to dogs

Dogs produce very little cash

Growth/share matrix & life cycle: Relationship

Product lifestyle & growth/share matrix determining profits & strategies: example

Growth/share matrix for mgt a/c:cashflow/profit planning, product life-cycle costing********

Value chain analysis-Industry value chain & value chain in the paper products industry

Value chain primary activates: 1 Inbound logistics 2 Operations 3 Outbound logistics 4 Sales 5 Service

Value chain support activities: 1 Procurement 2 Technology development 3 HR mgt 4 Firm infrastructure 4 Market

Sara Lee Corp-Re-configuration of value chain:outscource contract, concentric on value add

Value chains in paper ind-F2.10 p2.23-understand end user, determine competitive advantage..

Sara Lee's Value chain before outsourcing

Gap analysis: comparer the results with desired objectives

Competitive advantage: lowest cost base or differentiating. Danger 'get stuck in the middle'

Strategy-1 Market penetration 2 market development 3 product development 4 diversification

Competitive advantage: Cost leadership, differentiation, cost focus, differentiation focus

TOWS matrix-matching environmental threats & opportunities with weaknesses & strengths

Entrepreneur Dick Smith-Australia produces the best food in the world typical supermarket

Forster's Light launch: low-alcohol beers

Formulation strategy-group prod/customers/business;set;achieve;navigation objective;review

Polar chart or 'radar' comparison between several quantitative or qualitative aspect situation

Hayes & Wheelwright: What are the objectives of our business: competitive priorities

Strategy formulation process Phase 5: choice strategies on quantitative & qualitative evaluation

Strategy formulation process Phase 6 Dynamic environment embedded in feedback concept

Strategic decision-making cost accumulation including close examination of influence of ABC

Impact of contemporary costing for prod-different cost allocation bases on product cost

Starts are potential 'cash cows' cash absorbers if competitive position heavy expenditure. Mkt growth decline, become cash cows if hold mkt shares

Skyrockets-one-off in spectacular mkt, e.g. souvenirs of Olympic games or memorabilia accompanies visit of Pope or other world leaders

Internal analysis in value chain is linked set of value creating activities, a series of value-added activities to end customer

Value chain-value creating activities: 2 segments upstream-r&d, growth, product engineering & downstream-distribution, mkt, after sales services

Value chain critical foundation: end user need, competitive advantage, concept of strategic mgt, principle of value-chain analysis, strategic cost analysis & other techniques (PLC)

Internal analysis: organisational structure, co culture, strategic financial issue, R&D, Strategic operations, strategic HR, strategic information system issues

Formulation & implementation of strategies: 1 providing a/c info & rept, 2 help to decide appropriate structure, 3 preparing budget; 4 design mgt rept sys; 5 identifying reward sys

Organisations can successful by continuing reason: 1 objective of growth 2 concept of PLC over a period of time, sales eventually decline

Formulation 6 phases-internal & external environments 'chess game' 1 Grouping products/services 2 business objectives 3 current strategy 4 assess current strategy to achieve objectives 5 align action with objectives & strategy 6 review objectives & strategy

Strategy formulation process Phase 1: Group prod,customersorbusiness-1 gather info 2 process&organis info 3 Cluster 4 Collecting data on identified strategic areas

Strategy formulation process Phase 2: Competitive priorities 1quality 2lead-time 3cost 4flexibility 5innovation 6dependability

Strategy formulation process Phase 3&4 Gap analysis remains mgt tool despite internal & external environments are changing

Direct labour-based assignment: DL decreasing total cost for manufacturing & IT advancement, fixed costs increasing

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Cost categories as components of total cost: Director materials/Direct labours/overheads

ABC & ABM (emphasis on mgt): define activities 'action achieve goals & function objective'

ABC: cost drivers interrelationship among underlying activities. Activities aggregated in single cost pool

RACV included cost hierarchy 'membership-sustaining cost' as meaningful product identified

ABC & Traditional costing sys

Cost-driver identification: identifying suitable cost drivers in appropriate # a perplexing task

Cost-driver identification: 80% explained by few cost drivers, 20% on total cost drivers

Comalco rolled products-implement ABC identification of suitable performance measure

Cost-drivers used by respondents increased as firm moved towards ABC product cost sys

Cost-driver: primary output of activity direct cause-and-effect relationship

Market-driven ABC system: evaluate profitability & unprofitable customers

Customer profitability analysis: Australian banks: 4 types of customers to particular package

Value-chain incorporating suppliers and customers

Crookes Healthcare and CAP-closed-loop CAP; direct product profitability (DPP)

ABC & CAP analysis

Customer profitability analysis and devise alternative strategies

ABC: activity analysis for cost mgt purposes focus on mgt cost via mgt of activities=ABM

Value-adding reduce product service in long run, non-value-adding poor process, planning

ABM activity analysis useful in identification of value-adding & non-value-adding activities

Value-adding & non-value-adding activities and costs

ABM in billing dept of an overnight courier

Value-adding & non-value-adding activities

Activity-based mgt application: cost mgt focus rather than a product costing focus

Value-chain: linkage 1.supplier 2.customers 3.within co value chain 4.across co value-chain

Strategic mgt: activity or transaction-costing emphasis on internal cost & cost to product

Strategic mgt: opportunity to satisfy consumer by value chain achieve competitive advantage

Strategic mgt: focus on mkt & retain customers & repel competitors; cost position competitor

Cost mgt: umbrella term of ABM with multi-dimensional tools & characteristics

Strategic cost analysis: understanding firm's cost structure for competitive advantage

Strategic cost analysis: Individual firm & industry in which it operates

Value chain not a collection of independent activities but a complex interdependencies

Generic strategies formulation-cost leadership, differentiating & market focus

DuPont analysis reveals profit margin improved along with sales

ABC: co need to conduct own activity analysis, traditional cost at functional area detail at task level, Activity analysis is between task & functional

Activity analysis-Consume resource & products consume activities: 1 more cost as direct than indirect 2 identification cost pool 3 diff base to particular cost or pool 4 cost drivers both volume & non-volume related 5 non-manufacturing cost & value-chain concept

Cost hierarchy: expenses not fixed all & do not vary with how many units. Accurate perspective obtained by aggregating all product exp to 4 class cost hierarchy total exp figure

Cost hierarchy-1 Unit-level "DL/DM" 2 Batch level "set-up cost" 3 Product level "design& testing cost" 4 Facility-sustaining level "adm cost"

CAP features: 1 central role value-chain, 2 focuses on customer not transaction 3 focus single customer than multiple products 4 costs related to customers 5 highly aggregate level

CAP: 1 reliable customer revenue & cost 2 downstream costs of customers 3 long-term view rather than short-term 4 recognising diff drivers of customer costs

Cost reduction: 1 Reduce time & effort 2 eliminate unnecessary activities 3 select low-cost activities 4 share activities whenever possible 5 redeploy unused resources

Strategic formulation support role by mgt a/c: integration of costs into strategy by cost ana; determining cost structure of competitors

Strategic mgt a/c approaches:1 evaluation competitive position, 2 strategic cost analysis,3 quality,4 life-cycle cost 5 target cost

Cost mgt: 1 ABC&ABM, 2 performance measurement, 3 quality cost & TQM, 4 continuous improvement, 5 target costing, 6 investment & justification & asset deployment

Value chain analysis characteristics: 1 emphasis on source of competitive advantage 2 understanding interrelationships 3 formulation of cost leadership, differentiation & mkt focus

Competitive advantage:1 Internal linkages "prod dev reduce cost" 2 interrelationships "e.g. Honda leadership on IT" 3 vertical relationships "supplier & buyers"

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Industry value chain: include 1 supplier 2 customers 3 competitors

Value-chain analysis suggested in Airline strategies

Shell co of Australia Ltd-effectively in operational and strategic mgt 'conclusion p3.46'

Esso Australia-cost mgt exercise eliminate non-value added activities across dept 'p3.46'

Organisation's chart of a/c & outline the rationale behind its design

Critical activity is one which is capable of creating value for customer

Organisation understanding customers and diff between traditional a/c sys & ABC

Sub-units interdependent obstacle using value-chain analysis

Value-chain approach to determining cost-disadvantage relying upon traditional cost budget

Strategic mgt a/c survey value-adding activities 'rendered invisible by submerging o/h pool'

Strategic aspects of quality: quality is total exp incurred by co to prevent poor quality

Quality Mgt 'schools' 1 Joseph Juran 2 W.Edwards Deming 3 Philip Crosby 4 Japanese approach

Quality mgt:4 category 1 prevention cost 2 appraisal cost 3 internal failure cost 4 external failure

Quality mgt: dev quality mgt principle accepted in Japan & USA

Quality mgt 3 phases: Phase 1 mgt thinking regarding quality&cost

Quality mgt approaches to quality: 4 School summary *****************************

Traditional views vs TQM contrasting quality paradigms

TQM contrasting cost mgt vs Traditional vies contrasting cost mgt paradigms

Mgt a/c approaches to support TQM: Japanese concern with quality is paramount

TQM: Japanese organisation's strategy suggest mgt a/c sys will be in support

Quality is strategic variable that mgt a/c can no longer ignore

Mgt a/c approaches to supporting TQM: Deming-low role,Crosby-middle&Juran-High role

Life cycle budget: Home Entertainment Pty Ltd

Life cycle costing strategic aspects: Life-cycle costs & revenue for new product development

Life cycle costs & cost commitment for a typical product

Life cycle profit & loss statement difference: 1.difference period 2.costs&revenues separately

Industry Value chain: 1 cost, revenues & assets to activity 2 what driving each business in industry 3 competitive advantage potential areas. Predict competitors' strategic configured

Value-chain ana data collecting: 3 area:1 structural issues 2 linkage & interrelationship 3 traditional budget vs value-chain concept

Value-chain ana: 1st step define boundaries business segments. A/C sys not centre strategic business as basis for data accumulation

Value-chain ana: 2nd step identify critical activities on competitive advantage. A/C data not likely correspondence between critical activities by value chain & responsibility centers

Value-chain ana: 3rd step Defining prod in three-fold 1 physical prod not a/c for value creation 2 traditional a/c sys not non-manufacturing 3 physical prod not major source value to buyer. A/C data hard to identify buyer value, costs., revenue & assets to cost objectives

Value-chain ana: 4th step Linkages & interrelationships: Linkage can between variety of configuration of value chains F3.10 A/C sys assume independence of sub-unit basic & questionable method of modeling interdependence

Value-chain ana: 5th step Traditional budgeting vs value-chain-chain: firm must know activities responsible for competitive advantage. Problem occur determining value to consumer of intermediate activities if no mkt price. A/C inability to quantify financial rept

Traditional cost a/c data for value-chain analysis problem 1.data not for strategic business 2.no critical activities in value chain & cos centre 3. Difficulty in buyer value to cost objective 4.shortcoming between sub-unit 5.budget fail to measure long-run resources

Quality mgt: 'making it right the first time' of zero defect conformance & non-conformance cost; 'quality mgt maturity grid' dev quality thinking fm wakening enlightenment & wisdom to certainty

Japanese approach: quality uniformity around target; cost of quality not as goal; quality mgt maintain at lowest level emphasis at highest level; quality is a way of life not a target

Quality mgt 3 phases: Phase 2 Cost of quality (COQ) ana; 4 categories: prevention; appraisal; internal failure & external failure

Quality mgt 3 phases: Phase 3 cost-of-quality ana 1 poor quality actual cost often higher; quality dollars in wrong place; increased long-term reduce failure costs; building customers relations on product; top mgt commitment to quality programs; conventional mgt is a hindrance in TQM

Life cycle rept benefit: 1 cull set of statement for each product 2 highlighted each product PLC in early state 3 highlighted cost categories e.g. may cut back R&D 4 enhanced product mix decision before products launch 5 comparison product PLC even newer product

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Target costing strategic aspects: Japanese cost reduction strategy by target costing

Drifting cost: use value-engineering team & techniques to reduce product cost to target cost

Japan accounting function plays a key role in target costing

Focused on middle price range not quality differentiation, pursuing low-cost strategy

Generic strategies: stuck in the middle was dangerous

Market penetration strategy: Twinings introduced new pack size matched mainstream Tea

Strategy differentiation-e-tailing: Dstore-online department store: success online

Ishikawa diagrams & Fishbone diagram analyse: Cause-and-effect. Decide effect to analyse

Benchmarking definitions-several generic definitions by Xerox, Quality, Dictionary, Generic

Benchmarking process: identify>measure>select>identify gaps>achieve new goals>implement

Internal benchmarking: comparison of business process to a similar process inside organisation

Competitive Benchmarking: direct competitor-to-competitor comparison of a product

Functional Benchmarking: Comparison to similar or identical practices within functions outside

Generic Benchmarking: Unrelated business processes or functions can practiced similar way

Benchmarking- fails:1 unclear objective 2 leading team fail 3 lack of involvement 4 poor plan

Strategic benefit: 1 Internal 2 market 3 enhancement of existing products 4 risk reduction

Benchmarking managerial performance role in internal & external

Matrix constructed firm's strategies: benefits internal, market, enhancement prod&risk reduction

Strategic formulation in mgt a/c both conventional & strategic perspectives summary

Mgt rather be involved with strategy formulation & development than implementation

Strategy implementation process leading-senior mgt lead implementation process

Strategy implementation of changing environmental factors, internal & external factors

Strategy implementation occurred, select team, experience, leadership skill&knowledge ability

Strategy implementation program-Business process mgt (BPM) & total quality mgt (TQM)

Process approach-regarded as radical new perspective. Value chain useful 'process thinking'

Target costing process: 1 determine target price 2 calculate target profit 3 calculate target cost 4 value-engineering teams to reduce cost (drifting cost) 5 set aggregate cost & monitor cost

ABC & target costing: mgt accountant need to profit & cashflow throughout stages of PLC, dev & introduction, loss will sustain & cashflow will negative, growth & maturity stages, profit will earned & cashflow positive, decline, profits & cashflow will negative*********

Identify major competencies organisation can choose the correct strategies: Mayne Nickless, Pacific Dunlop & Canon.

Strategic & analytical process of continuously measuring an organisation's performance against a recognised leader in the field: Xerox Corp foremost benchmarking pioneer

Benchmarking attributes: structured process become better than the best; measuring performance against world-class organisations; disciplined method on best practices; learning leading co; tool for improving

Benchmarking requirements: thorough understanding, planning, analysis, set goals & standards; mgt commitment; measurement; HR & financial resources

Benchmarking types:1 Internal-business inside the organisation 2competitive-competitor 3 functional-similar function outside industry 4 generic benchmarking-regardless of industry

Strategies: allow strategic benefits to be without precise quantification & tested against managerial experience: monetary benefit & scale benefits can't converted into financial terms

Strategic cost mgt approach ana:1 value-chain ana, 2 cost-driver ana 3 competitive-advantage. Porter lack of link between strategic & financial analyses

Strategy implementation overall goal: unite organisation strategy, effective strategy execution, generate a commitment at all organisational levels

Strategy implementation: proficient organisation; sufficient resources; strategy-supportive; best practices & continuous improvement; linking rewards & incentives; corp culture; strategic leadership

Strategy implementation require action-oriented, operations-driven people & sys mgt activity: 1 leading 2 motivating involved,3 structure chg,4 re-engineer. Responsible by CEO & head of major organisational units

Strategy implementation is difficult & time-consuming: variety of managerial activities; multiplicity of approaches; breadth of people mgt skills; problematic issues on ongoing basis; resistance to change

Characteristics: active role in every person; no standard checklist; strategy mgt open-ended; best evidence of rights & wrong fm experiences; every case is unique

Attributes: business experience; current position experience; diagnostic, adm, interpersonal & problem-solving skills; authority level; leadership style ; understanding of their role

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Process mgt: determining what process, ensuring aware of the importance, measuring process

Process mgt-improving, eliminating or redesigning component of relevant process TQM&BPR

Process approach vs functional approach: process 'set of logically related tasks performed…

TQM: continual improvement; customer focus & employee empowerment on benchmarking

Clean slate: existing processes may limit creative ability of people involved

TQM vs BPR-TQM continuous improvement, BPR radical change 'clean slate'

Process approach success and failure-failures in lack of mgt leadership, unrealistic, resistance

Manufacturing Assembly Pilot project compresses lead time in supply chain

TQM build incrementally on ongoing basis & BPR one-off solution to a problem

Devenport & Short 5 stage approach & difficulties arise in process example

Project manager to coordinate people & activities; keep project on time; control project cost

Project manager-coordinate people & activities, keep the project on time & control cost

Project mgt & incentive for on-time, on-budget completing

Gantt charts: resources consumed & intermediate tasks completed relative to time on bottom*

Sensitivity analysis during project scheduling & planning phase

Gantt chart for Isetan's new store

Gantt chart advantage: 1 simplicity, 2 planning, 3 performance measures & disadvantage***

Repetitive: change over time not applicable for PET. Non-repetitive: PERT useful

PERT network analysis-five step process: identify activities, concurrently, draw up, calculate...

PERT=Optimistic time (O) + 4 Most likely time (M) + Pessimistic time (P) / 6*************

Crashing a project-time reduction in safety or quality in least costly ******************

Project not achieve; 1 original estimate inaccurate 2 operation not successfully implemented

Strategic mgt accountants: Project not only achieve financial goal also for social & environmental expectations.

Successful: involvement decision-makers; policies regularly updated & review; assigned responsibilities

Implementation audit-timing,cost,operational, general & Post-implementation audit feasibility

Non-financial consideration in project evaluation: strategic consideration in project appraisal

Toyota launched Camry move to new manufacturing facility; Perception Inc non-financial

Moving baseline concept apparent financial non-viability long-term investment advance IT

MJG investing new production technology

Social & environmental consideration in project appraisal: social benefits outweighed costs

Gov't & not-for profit investment projects: Gov't on political or ideological grounds

Feedback & re-evaluation of strategy: performance measurement system

Business level performance:3 Agree performance,4 signing off 5 embed top-level performance

Business process re-engineering (BPR)-Radical redesign of business process dramatic improve 1 dev vision & objective 2 identify process redesigned 3 understand & measure existing processes 4 Use IT 5 design new process

Process approach benefits-1 greater understanding of linkages & customer focus 2 customer focus 3 dev performance measure for processes rather than activities, tasks or dept

PERT advantages: 1 probabilities,2 critical events & activities 3 inter-relationship 4 Forced planning & performance measures*******************************************

PERT advantage: 1 systematic basis 2 co-ordination & communication 3 highlight right & wrong 4 critical path identify to all 5 sub-network to simplify mgt 6 plans can review & update

PERT disadvantage: 1 must keep update 2 specialist skill required 3 project confuse lines of authority 4 too detail confuse decision makers 5 cost-benefit must considered

Implementation audit: 1 assess implementation performance & resolve problems before occur 2 identify opportunities 3 provide recommendation for corrective action

Post-implementation project evaluation-1 strengthen existing procedures,2 improve decision 3 identify deviation factors 4 identify risk 5 promote accountability

Establishing evaluation criteria: project-planning process, objective are set to achieve one it is operational not only financial criteria

Purpose: 1 Evaluate methodology estimate cashflow 2 performing once operational 3 decide abandon project not achieving targets

Mgt Accountant's role:1 provide actual cash flow 2 assist evaluating overall performance by financial & non-financial factors

Benefit: 1 improved decision-making 2 effective mgt of project risk 3 increased value from capital investments 4 enhancement in corp accountability

Activity level performance: 6 identify driver 7 decide drivers 8 agree driver 9 signing off performance for key drivers10 embedding performance for key drivers

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Feedback: provide info for formulation of business strategy on continual process & review

Traditional 'value adding': shareholder wealth; customer satisfaction; employee productivity in $-oriented

Balanced scorecard: 1 Customer 2 Internal 3 Innovation&learning 4 Financial perspective***

Triple bottom-line rept: stakeholder focus: financial returns; social responsibilities; environmental accountability

Financial profitability no longer regarded as sole measure of performance also 'healthy'

Strategy implementation issues summary

Performance measures purposes: Planning, control, decision-making, reward sys & motivation

Mgt a/c control model & specific

Mgt a/c facilitation the planning & control at Daily News

Mgt control sys linking with strategies:

Performance measures:1 employee set standards or targets 2 standard level difficulty s/b set

Performance measures to variety of people allow feedback for control & motivation

Performance measures: rept an important impact on use info & degree facilitate self-control

Performance evaluation sys: prov activities info vary form great to little significance to individual

Performance measures: motivation for subordinated by extrinsic, intrinsic or both

Performance evaluation in a responsibility a/c sys setting standard or benchmarked

Organisational structure appropriate importance: JIT,ABC,value-added, TQM & target costing

Conventional responsibility a/c structure: sub-objectives;budget;decentralise or centralised

Cost centers manager perform task at minimum cost: engineered & discretionary cost centre

Profit centers attain agreed profit target: responsible for revenues-maximise sales; cost only-minimised costs

Investment centers generate target profit by 1 ROI 2 residual income

Profit centre definition & profit result in evaluating performance

Corp strategy continuum with 'single business' strategy at one end & 'unrelated diversification' at the other end

Corporate strategies categorisation & diff corp strategies: Mgt control difference

Boston consulting Group (BCG): build-?; hold-Star; harvest-cash cow; divest-dog strategies.

Mgt a/c influenced by organisational structure: by diff responsibility centre, diff structures

Performance measurement dysfunctional measure use

Performance measurement relationship between purpose level & type

Performance measurement conventional approach: Financial performance measures

ROI =1 Operation profit / Total assets 2 Profit / Sales * investment turnover times ********

Mgt control sys-mgt a/c info & techniques: 1 long-term objective & strategies 2 suitable organisational structure 3 short-term objective (budgets) 4 performance measurement 5 comparison of actual & planned performance 6 higher level of mgt rept 7 corrective action 8 reward sys

Mgt control sys: conventional model fail to recognise the power which mgt control sys have in strategy formulation process

Characteristics of performance measures:1 Completeness-important features of task ' ROI' 2 Objectivity-no personal judgment 3 Controllability-subordinate mgt influenced or controlled

Performance measure characteristics, nature of standards, source of discrimination, pattern of communication, speed & frequency of communication, type of activity, sources of motivation

Performance evaluation: discriminator s/b a trusted person, immediate superior regard budget rept as credible or little incentive to perform

Responsibility centers is important: 1 identifies sub-objective & performance indicators 2 budget centre identified 3 rept sys performance determined 4 identified responsibility degree decision-making centralised at higher level of mgt or decentralised to lower level

Mgt control implemented differentiated strategies linked to strategy diff co in diff strategic context, diff strategies require diff task; control sys influence behaviour ; continuing concern design & behaviour induced consistent with strategy

Mgt control: tendencies, not universal truths. Control sys s/b designed in the context of organisation's unique external environment, IT, strategy, organisation sturcture, culture & top mgt style

Performance measures levels&types:1corp(ex/internal) 'ROI' 2 business unit(profit centre) 'same marco-level measures prevail at unit level' 3 responsibility centre level-financial & non-financial 'std cost for cost central' 4 managerial level-'controllable vs non-controllable factors'

DuPont achieve ROI: Profit/Assets = 1 Decrease operating cost; 2 Increase sales 3 Decrease assets***************************************************************

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Profit-related measures: profit centre have advantage over cost centre & disadvantages

Financial performance measure general problems

Financial performance measures specific problem:1 operating profit 2 asset base & how valued

ROI: simple; compare division of unequal size; comparison to outside; useful diagnostic tool

Profit-related measure-Corp constraints, other constraints, Transfer pricing considerations

Transfer pricing is a key component of most undergraduate mgt a/c courses

Mgt interventions impact: Complexities fm diverse & discerning customers & intense & skilled

Business process re-engineering: incremental improvement & radical chg & innovation

A study of turnaround: BPR approach success managed carefully

Continuous improvement-quality control (TQM) & benchmarking-formal approach improvement

Benchmarking activities in Australian businesses

Quality: continuous improvement on identifying the quality drivers in product-related processes

Time: 1 new product to mkt 2 on-time delviery 3 time taken to meet customer request service

Flexibility: 8 alternative ways in increasing flexibilty; 12 flexibility drivers

KSFs-Key success factors focus on quality,time,flexibility,productivity & innovation

Multiple performance measures

Non-financial performance measure

Developing measures with drive performance combined measures

Balanced scorecard balanced presentation including financial & operating measure on budget

Non-financial performance measures - reading

Performance measures commonly cited: customer/internal business/innovation/financial

Balanced scorecard features: clear translation/financial & non-financial/output&performance

Financial measures or operational measures should inclusive in measures performance

Financial & operation measures complement each other: provide a/c result

Balanced scorecard provide a more complete measure of performance: prevent dysfunctional

Balance scorecard appear mgt decide: 4 perspectives in goals and progress

Mitsubishi Motors Australia Ltd (MMAL): well-articulated mission statement & objectives

Dynamic modeling process: confined to paint shop 2 measure help monitor,

Measure of performance & hierarchy of measure for quality

Balanced scorecard for Clean Living

Reward systems: useful observation relationship between rewards & performance

Incentive compensation: important mechanism encourages & motivate managers to objectives

Employee share plan-employees pur discounted shares

Gainsharing: cash bonuses to employees when exceeds a performance target (EBIT/ROI)

Residual income = 1 operating profit - % on capital charges 'total assets' 2 Sales / investment turnover times * imputed interest rate *****************************************

Performance measuring: emphasis on customer satisfaction as quality, availability, time & innovation not only financial

Supplier performance: frequency & defect%; on-time delivery; price fairness & settlement terms; cooperation in solving problems

Plant performance: PPM defect rate; %yield, scraps & reworks; first-pass yields %; #of plant days between accidents; on-time deliveries %; #engineering change orders per period

Manufacturability: measures of design quality: # of parts per product & % of parts in a prod common to other high-volumen prod

Customer acceptance: cusomer complaints#; customer locations failures#; rtn & allowances #; warranty claims #; repeat order #; on-time deliveries %; mean delivery delay; customer rating products; elapsed time fm receipt of order to delivery to customers

Cost of quality: designed to provide single measure of all the costs attributable to ensuring prod meet specification as well as incurred of failure of prod to meet specifications

Toyota: concentrating on time take in performing critical operation as production, dealer ordering, lant scheduling & new prod dev

Productivity: 1 ratio of process time to available time to bottleneck equipment 2 occupany rate in hotels & motels 3 direct labour hours per unit or transaction 4 ratio of actual to standard # of units per period at practical capacity 5 standard cost efficiency measures

Innovation process diff to measure can be measures 1 # new prod or services dev per year 2 % of prod & service concept reaching launch 3 % of successful prod & services launched 4 time fm concept to prototype/launch/launch of prod or services 5 avg dev cost 6 performance

Expectancy theory: expectancy-individual perception 2 instrumentality-achieving result lead to reward; valence- employee preference for reward

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Gainsharing: BOC Gas Cylinders: employees accustomed performance measures by gainsharing

Performance-related rewards problems: subjective, particularly

Compensation plan for branch managers criteria

Base salary scheme & payment of bonuses

Further options for bonuses & salary scheme

Performance measurement summary

Quality major element strategic approach: use zero defect, involving everybody, build quality..

AnPac Banking Corporation:

Non-financial performance measures: 1 semi-conductor described high-technology manufacturers sys 2 KSF monitored & actions to traded off for another 3 financial outcome improve non-financial performance measures 4 GAAP std costs involvement office in same cases but not in others 5 Std cost variance local measure of performance focus narrow set of attributes. identifies opportunity 'gaming' endemic feature of performance measurement sys

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RELATED PAGE#

Mgt accounting 1.03

Mgt accounting in last decade 1.04

Honrngren, Datar & Foster 1.05

Mgt accounting supporting 1.05 Table 1.1

Mgt accounting 1.05 SA1.01

Strategic mgt a/c-mgt a/c expand role 1.05 SA1.02

Birkett views of Mgt Accountants 1.06

Mgt Accountants 1.06


Birkett view: Mgt Accountants 1.06




OECD Defined Corp Governance 1.07

Mgt accounting practice 1.07 Ex 1.1

Mgt accounting: 62% a/c sys & rept 1.08 Ex 1.2

Mgt accounting tasks 1.08 SA1.03

Birkett's three factors 1.09-10

Role of mgt accountant 1.10 F1.1&1.2

Mgt a/c function 1.11

Mgt a/c between manufacture & service 1.11

Goal congruence & dysfunctional 1.12

Delegation and Decision-making 1.12

Mgt a/c influence by human behaviour 1.12

Budget-planning & control 1.13

Rewards and performance evaluation 1.13

Hilton-Managerial a/c definition 1.14

Atkinson Et al-Mgt a/c definition 1.14

Birkett-Mgt a/c definition 1.15

Ward-Mgt a/c definition 1.15

Factors creating change in mgt a/c 1.16 F1.3

Burrel-traditional&contemporary environ 1.17

Asia-Pacific region growth in world trade 1.17-18

1.18

Australian economy 1.18 F1.4

Global markets-add'l factors impacting 1.18-19

Global markets add'l factors of global firm consider1.19

Service&Manufacture co consider factor 1.20

Environmental issues 1.20




Outsourcing of non-core actives growth of service sector

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Environmental issues 1.22 SA1.06

Information Technology 1.23

Information technology-PC, sys 1.23

Mgt a/c-technology dev 1.24

Porter-value-chain/cost-effective 1.24-25

Deming-Shank & Govindarajan 1.25

Gov't recognition 1.26

TQC=TQM 1.27

Mgt a/c influence by quality influence 1.27

Porter, Michael-Competitive advantage 1.28

Porter-value chain/differentiation 1.28 F1.5

Conformance quality-relative design 1.28 SA1.07

Johnson & Kaplan's relevance Lost 1.29-30

Johnson & Kaplan's relevance Lost 1.30

Horngren, Datar & Foster 1.31

Horngren, Datar & Foster 1.31 F1.6

Organisation & mgt implications 1.34

Divisional structure 1.34

Ruthven, P-Outsourcing/licensing 1.35 F1.7

Flatter organisational structures 1.36

Team based structures 1.36

Culture of organisational 1.36

Mgt a/c-change & implications 1.37

Strategic management process 1.38

David, F.R.-Cimprehensive strategic-mgt 1.38 F1.8

Outsourcing 1.38 SA1.09

International Mgt 1.39

Employee empowerment 1.39

Human resources mgt 1.39

Employee relations 1.40

Manufacturing technology 1.40-41

Johnson & Kaplan 1.41

Cost Mgt programs 1.41



Kodak 1.42 Ex1.10

Elements of change 1.43

Organisation & mgt changes 1.43 SA1.11


Mgt a/c developed framework 1.44

Strategic mgt 1.44

Coles Myer Ltd & Telstra success factor 1.45

Medical centre critical success factors 1.45 SA1.13

Long-term vs short-term 1.46

Measuring & reporting of performance 1.46

Bromwich 1.47

Chartered Institute of Mgt Accountant 1.47

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Bromwich & Bihmani 1.47


Clarke 1.47

Mgt a/c next decade & beyond 1.47 F1.9

Simmonds 1.47-48

Strategic mgt a/c 1.47-48

Kaplan 1.48

Kershaw & Mahenthiran 1.48

AAA & CPA Australia 1.48

Strategic planning-long term plan 2.04

Johnson & Scholes-Strategic mgt 2.04

David, Fred R-Strategic mgt 2.04 F2.1

Objective:end results continuous plan 2.05

Qualitative objective: measurable 2.05

Qualitative objective: difficult to evaluate 2.05

Realistic & achievable 2.06

Strategies means by achieved objective 2.06

Porter, Michael: objective of strategy 2.06

2.07

Ward, K-Strategic mgt a/c 2.07 F2.2

Mission statement: key ingredient 2.08

Drucker, Peter: objective & strategies 2.08

Terziovski & Samson in Langfield-Smith 2.08 EX2.1

Klobas & Reidpath in Langfield-Smith 2.08 EX2.1

Mission statements 2.08 SA2.01

Strategy: Concentration/diversification 2.09

Strategy: Stability strategies(no change) 2.09

Strategy: Turnaround/divestment 2.09

CSR Ltd 2.09 EX2.2

Strategic analysis starts with analysis 2.10

Critical success factors (CSFs) 2.10


Ansoff, The New corp Strategy 2.10 SA2.01

Ward, K. Strategic mgt accounting 2.11 F2.3

Poter's Industry analysis 2.11-12 F2.4

Porter's five sources of competition 2.13











Environmental scanning:PEST analysis 2.15

Porter's five sources of competition 2.15 SA2.02

James-Impact of changing technology 2.16 EX2.3

Wheelen, T.L.-important variables 2.16 T2.1

Derrinallum food & Cheese cooperative 2.17-18 T2.2

Corp strategy, Business strategy ,Functional Strategy

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Strengths & weaknesses 2.18-19

Life cycle: sales & time relationship 2.19 F2.5

Boston matrix: Smith, M 2.20

Boston matrix: Smith, M 2.20 F2.6





Life cycle & growth/share matrix 2.21 F2.7

Value chain analysis in internal analysis 2.22

Product lifestyle & growth/share matrix 2.22 F2.8

Life cycle & growth/share matrix***** 2.22 SA2.03***

Shank, J. K. & Govindarajan, V. 2.23 F2.9&10

Porter, M. E.-Competitive advantage 2.24 F2.11

Viljoen, J & Dann, S-Primary activities 2.25 T2.3

Viljoen, J & Dann, S-Supporting activities 2.25 T2.4

Value chain Critical foundation 2.26

Sara Lee: Playing with the recipe 2.26 EX2.5

Shank, J. K. & Govindarajan, V. 2.26 F2.10p.23

Sara Lee's value chain analysis 2.26 SA2.04

Functional resources: strength & weak 2.26-27 T2.5

Johnson, G. & Scholes, K. 2.28 F2.12

Porter 2.29

Ansoff four separate strategies 2.29 F2.13

Porter's model of generic strategies 2.30 F2.14

Weihrich, H-TOWS :SO,WO,ST,WT 2.30-31 F2.15-16

Lloyd, S-Smith's crusade hits the spot 2.32 EX2.7

Shoebridge-Forster's Light 2.33

Mgt accountant role on strategies 2.33

Competitive strategies 3.05

Strategy formulation process 3.05 F3.2

Strategy formulation process-Phase 1 3.06

Formulation six Phases 3.06-3.10

Radar or Polar charts 3.07 F3.3

Foo & Friedman Formulation: Phase 2 3.08

3.08

Navigating to objective: Phase 5 3.09

Review of objective & strategy: Phase 6 3.09

3.09 SA3.3

Role of contemporary mgt a/c techniques 3.11

Direct labour or machine hours 3.12-14 EX3.1

Johnson & Kaplan: Relevance lost 3.15

Competitive priorities: Objectives of business Phase 2

Gap analysis-current strategy can achieve objectives: Phase 3&4

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Nguyen, Van Hieu - cost categories 3.15 T3.1

Berliner&Brimson-ABC & ABM 3.16 F3.4

Cooper, Robin: ABC 3.17

Morrow: ABC 3.17 F3.5

ABC 3.18 F3.6 EX3.2

Cooper & Kaplan: cost hierarchy 3.21

Cooper four class activities 3.21-22

Oliver, J. ABC in service organisation 3.22 CS3.1

ABC & Traditional costing sys 3.22-24 SA3.6

Sharman: lower level closer Morrow 3.24

Chalos & Sharman: 80:20 3.24

Lamond, S. Activity-based mgt 3.24 CS3.2

Nauyen: Cost drivers survey 3.24 T3.2

Burch: Cost driver 3.25

Burch: Customer profitability analysis 3.25

Market-driven ABC system 3.25

Value-chain 3.26 F3.8

Foster et al-CAP analysis 3.26-3.27

Foster et al-key challenges CAP 3.27

CAP-Connolly 3.28

CAP & ABC 3.28 SA3.07

CAP 3.29 SA3.08

ABM & ABC 3.30

Atkinson et al 3.31

Turney: Activity-based mgt (ABM) 3.31 F3.9

Non-value-adding activities & costs 3.31-32

Value-adding & non-value-adding 3.32 CS3.4

Value adding & non-value-adding 3.32 SA3.09

Turney-five guidelines cost reduction 3.33

Quality costing-value&non-valueadding 3.33 CS3.5

Shank & Govindarajan-4 profit improve 3.34

Johnson & Kaplan: costing approach 3.35

Porters: costing approach 3.35

Bromwich: strategic mgt a/c 3.35

3.35

Strategic mgt a/c approaches 3.35-36

Brinker, Barry: cost mgt definition 3.36

Campi: ABM 3.36

Shank & Govindarajan: strategic cost 3.37

Value-chain approach&analysis 3.37

Hergert & Morris 3.37

Strategic mgt 3.37

Complex linkages & interrelationships 3.38

Ajax Airline-Value-chain analysis 3.38-42 EX3.4

Profit margins 3.39

Strategic mgt a/c regard any notion of widespread practice implementation

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RELATED PAGE#

Langfied-Smith, Thorne & Hilton 3.42-43


Value-chain analysis 3.43 SA3.10

Caplan, Russell-Shell Co of Australia 3.44-45 EX3.5

Boreham, T.: One way of cutting costs 3.45-46 EX3.5

Porter, Shank & Govindarajan, Hergert & Morris 3.46

Strategic business for strategic planning :1st step 3.46

Chart of a/c:designated as strategic 3.46 SA3.11

Critical activities: 2nd step 3.47

Critical activities diff between traditional 3.47 SA3.12

Product or product group segregated: 3rd step 3.48

Traditional a/c sys & ABC 3.48 SA3.13

Linkages & interrelationships 3.48-49 F3.10

Sub-units interdependent 3.49 SA3.14

Traditional cost centre bdg disadvantage 3.50 T3.3

Traditional cost centre bdg disadvantage 3.51 SA3.15

value-chain analysis 3.52

Boromwihc & Bhimani-survey 3.52;53

Strategic consideration-TQM 3.53

Schools of quality mgt 3.53

Juran, Joseph: quality mgt schools 3.53-54

Deming, W. Edwards: quality mgt 3.54

Crosby, Philip: quality mgt school 3.54

Japanese approach: quality mgt school 3.54

Shank & Govindarajan-3 phases 3.55

Shank & Govindarajan: quality mgt *** 3.55 T3.4*****

Shank&Govindarajan-Tradition vs TQM 3.56 T3.5

Cost of quality four categories 3.57

Shank&Govindarajan-Tradition vs TQM 3.57 T3.6

Cost-of-quality analysis 3.58

Mgt a/c sys support non-financial measure 3.58

Bromwick & Bhiman support TQM 3.58

Shank & Govindarajan: quality strategic 3.59

Shank & Govidnarajan-role for mgt a/c 3.59 F3.11

Home Entertainment Pty Ltd 3.60 EX3.6

Bursten-Life-cycle costs & revenues 3.60 F3.12

Burstein: Life cycle costing 3.62 F3.13

Life-cycle profit & loss statement 3.63 SA3.17

Life-cycle rept format benefit 3.63 SA3.18

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Bromwich & Bhimani: Target costing 3.64


Target costing 3.65

Target costing 3.65

Life cycle & target costing******** 3.65-66*****

Core competencies to dev strategies 3.67-68 EX3.7

Sainsbury: generic strategic 3.68-69 EX3.8

Porter: generic strategic 3.69

Twinings penetration strategy 3.70 EX3.9

Dstore online department store 3.70-71 EX3.10

Fishbone diagram & Ishikawa 3.71-72 F3.14

Benchmarking 3.73

Benchmarking definitions 3.73

Benchmarking attributes 3.73

Benchmarking requirements 3.73

Langfield-smith: benchmarking 3.74 F3.16

Benchmarking types 3.74 T3.7

Benchmarking 3.74 T3.7




Benchmarking 3.75

Bromwich & Bhimani follow Japanese 3.75


Benchmarking 3.75 SA3.19

Matrix of strategic benefits 4 categories 3.75, 3.77 F3.17

3.76

Strategic formulation in mgt a/c 3.79-80


Strategy implementation 4.05 F4.2

Strategy implementation main responsible 4.05-06

Strategy implementation 4.06

Strategy implementation most 'visible' 4.06 SA4.1

Strategy implementation process 4.06-07

Strategy implementation mgt team attributes 4.07

Mgt implementation style 4.07 F4.3

Strategy implementation 4.08 SA4.02

Strategy implementation 4.08 SA4.03

Strategy implementation 4.09

Strategy implementation: process approach 4.09

Shank & Govindarajan: strategic & financial. Porter lacks

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Process 'example-product development' 4.10

Process mgt 4.10

Functional approach: Process not task 4.10 F4.4

Customer focus&employee empowerment 4.11

BPR(Business process chg)-5 step method 4.11

Andrew: BPR value-adding activates 4.11

BPR-innovation vs TQM-improvement 4.11 T4.11

Process approach benefits 4.12

BPR-re-engineering replace by redesign 4.12-13

USAF Manufacturing Tech. Prog Status 4.13 CS4.1

Devenport & Short-TQM & BPR 4.13 SA4.04

BPR implementation difficulties 4.14

Project implementation & mgt 4.15

Project time & cost mgt 4.15-16 F4.5

Project mgt & incentive for on-time/bdg 4.17 CS4.2

Project mgt: Gantt charts ********** 4.17 CS4.3****

Project scheduling & planning phase 4.18 SA4.06

Gantt charts 4.19 SA4.07

Gantt charts: hard to deal with complexity 4.19*******

4.20********

PERT: advantage 4.21

PERT: disadvantage 4.21

PERT: diff types of operations 4.21

PERT network building steps 4.21

PERT: expected time formula******** 4.24********

PERT network crashing*********** 4.24-25******

Audit-mgt accountant role 4.26

Post-implementation project evaluation 4.27

Evaluation criteria on project-planning 4.27

Post-implementation audit failure 4.27


4.28

Post-implementation successful principle 4.29

Strategic mgt accountant's role 'post-imp 4.29

Post-implementation project benefit 4.29

Implementation&post-implementation 4.29 SA4.09

Strategic consideration project appraisal 4.30

Alpha mgt focus strategic factors 4.30-31 CS4.5-4.7

Non-investment decision techniques 4.32-33 F4.12

Financial analysis investing technology 4.33 SA4.10

Environmental & social consideration 4.34 CS4.8-9

Not-for-profit & Gov't investment project 4.34-35 CS4.10

Re-evaluation & Feedback of strategy 4.36 F4.13

Performance evaluation sys: Marco level 4.37

Performance evaluation sys: micro level 4.38

PERT-sequences activities & parameters*******************

Post-implementation audit concern: social & environmental;

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Feedback mechanism 4.38

Kaplan&Norton:5 perspective 'wellbeing' 4.38-39

Kaplan&Norton:4 perspective******* 4.38-39/5.45***

Triple bottom-line rept 4.39

Triple bottom-line rept 4.40 SA4.12

Strategy implementation issue summary 4.41

Performance measures mgt activities 5.06

Mgt control&performance measurement 5.08

Mgt a/c control model 5.09 F5.1

Daily News a/c facilitates plan & control 5.09-10 EX5.1

Mgt control sys linking with strategies 5.11

5.11 SA5.01

Lawler & Rhode: natural of adm control sys 5.12

5.12

Standards or targets 5.13

Source of discrimination 5.13

Pattern of communication 5.13

Speed & frequency of communication 5.14

Type of activity 5.14

Motivation for activity 5.14

Performance evaluation 5.15 SA5.02

Business:customer-focus & competition 5.16

Conventional responsibility a/c structure 5.16

Responsibility centers 5.17 T5.1

Cost centers 5.18

Profit centers 5.19

Investment centers 5.19

Anthony & Govindarajan: mgt controls 5.19

Profit centers & profit results 5.19 SA5.03

Anthony & Govindarajan: corp strategy 5.20

Corporate strategies categorisation 5.20 T5.2 F5.4

Anthony & Govindarajan: business unit 5.21-22

Organisational structure influence Mgt 5.22

Anthony & Govindarajan: mgt controls 5.22-23 F5.5-6

5.24

Performance measure 5.25 SA5.04

Performance measures levels & types 5.25 T5.3

Investment centers 5.26 EX5.2

Performance measure*****MC Q5.12 5.27********

Performance measure (Profit/Assets)** 5.28 EX5.3****

Simons: mgt sys important in implementation & formulation


Anthony & Govindarajan: 4 levels 1 Corp; 2 business unit; 3 Responsibility centre 4 individual manager

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5.28 EX5.3****

Profit centre; cost centre effectiveness 5.29

Performance measure 5.30

John & Kaplan: chg manufacturing IT 5.30

Investment-related measure 5.30-31

Residual income: advantage&disadvantage 5.31

Corp constraints & other constraints 5.32

Porit central 3 types decision 5.33

Contemporary mgt interventions 5.34

World-class manufacturing & ser face 5.34

A study of a turnaround 5.34 EX5.4

Benchmarking&continuous improvement 5.35-36 F5.7

Benchmarking activities 5.37 EX5.5

Performance measurement 5.38







Bower & Hout: Toyota 5.39




Multiple performance measures 5.42

Measures&target based ideal performance 5.43

Non-financial performance measures 5.43

Combined measures-developing measures 5.44

Kaplan & Norton: balance scorecard 5.44

Non-financial performance measures 5.44 SA5.07

Developing measures 5.44-45

Balanced scorecard strategy map 5.46 F5.8-9

Operational measures 5.47 SA5.08a

Operation & Financial measures 5.47 SA5.08b

Balance scorecard 5.47 SA5.08c

Balance scorecard 5.47 SA5.08d

Performance measure for MMAL 5.48 EX5.6

Balanced scorecard approach 5.48-49 F5.10

Balanced scorecard of Navigator Inc 5.49-50 F5.10

Balanced scorecard of Balanced scorecard 5.50 SA5.09

Emmanuel, Otely & Merchant 5.52-53

Anthony & Govindarajan-incentive 5.52-53

Anthony & Govindarajan: Expectancy 5.53

Performance-related reward systems 5.54


Performance measure *********************MC Q5.13

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Performance-related reward systems 5.54 EX5.8

Performance-related rewards problem 5.55

AnPac Banking Corporation 5.55 SA5.10a

AnPac Banking Corporation 5.55 SA5.10b

AnPac Banking Corporation 5.55 SA5.10c

Performance measurement summary 5.56

Mgt a/c implication: use quality 5.59 SA3.16*

Fisher, Joseph R5.01 SA5.7

AnPac Banking Corporation R5.02

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ABC & CAP analysis





ABM activity analysis useful in identification of value-adding & non-value-adding activities

ABM in billing dept of an overnight courier






























Attributes: business experience; current position experience; diagnostic, adm, interpersonal & problem-solving skills; authority level; leadership style ; understanding of their role






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Business process re-engineering: incremental improvement & radical chg & innovation




Charges & taxes










Context of the actual business environment at the time of their setting-internal & external area












Cost-driver identification: identifying suitable cost drivers in appropriate # a perplexing task










Characteristics: active role in every person; no standard checklist; strategy mgt open-ended; best evidence of rights & wrong fm experiences; every case is unique






Cost reduction: 1 Reduce time & effort 2 eliminate unnecessary activities 3 select low-cost activities 4 share activities whenever possible 5 redeploy unused resources

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Drifting cost: use value-engineering team & techniques to reduce product cost to target cost




















Financial profitability no longer regarded as sole measure of performance also 'healthy'













Formulation 6 phases-internal & external environments 'chess game' 1 Grouping products/services 2 business objectives 3 current strategy 4 assess current strategy to achieve objectives 5 align action with objectives & strategy 6 review objectives & strategy

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Forster's Light launch: low-alcohol beers



Functional objective and strategies
















Growth strategy - existing businesses & product line or new business & product or markets











Internal appraisal-identifying strengths & weaknesses-durability & limitability



Int'l societal environments - Economic,Technological,Political-legal&Sociocultural



Japan accounting function plays a key role in target costing



Kodak-TQM





Internal analysis in value chain is linked set of value creating activities, a series of value-added activities to end customer




CPA104-Description

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Manufacturing & services organisation consideration factors-peculiar for Manu & service co

Manufacturing Assembly Pilot project compresses lead time in supply chain

Market penetration strategy: Twinings introduced new pack size matched mainstream Tea








Mgt a/c approaches to supporting TQM: Deming-low role,Crosby-middle&Juran-High role










Mgt a/c-positive role of supporting the financial needs of mgt in directing & controlling business in the best interest


Mgt accountant-identify & record evolving roles and functions in contemporary workplace














Mgt Accountant's role:1 provide actual cash flow 2 assist evaluating overall performance by financial & non-financial factors


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Mgt rather be involved with strategy formulation & development than implementation









Non-financial consideration in project evaluation: strategic consideration in project appraisal


Organisation understanding customers and diff between traditional a/c sys & ABC







Performance evaluation sys: prov activities info vary form great to little significance to individual





Mgt control sys: conventional model fail to recognise the power which mgt control sys have in strategy formulation process









Performance evaluation: discriminator s/b a trusted person, immediate superior regard budget rept as credible or little incentive to perform


Performance measure characteristics, nature of standards, source of discrimination, pattern of communication, speed & frequency of communication, type of activity, sources of motivation

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Performance measures: rept an important impact on use info & degree facilitate self-control

Performance measures:1 employee set standards or targets 2 standard level difficulty s/b set







Process approach-regarded as radical new perspective. Value chain useful 'process thinking'

















Quality is strategic variable that mgt a/c can no longer ignore


Quality mgt 3 phases: Phase 1 mgt thinking regarding quality&cost













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Quality mgt approaches to quality: 4 School summary *****************************

Quality Mgt 'schools' 1 Joseph Juran 2 W.Edwards Deming 3 Philip Crosby 4 Japanese approach










Retrenchment strategy-quick cutback on costs to stop rapidly declining profitability (sell-off)











South Pacific Tyres-Int'l successful tyre co through attaining world class performance in…..

Stability strategies-pause & take stock before continuing proactive strategy or continue oper

Strategic analysis-consideration external environment, customers, supplies, IT, competitors & political

Strategic aspects of quality: quality is total exp incurred by co to prevent poor quality


Strategic cost analysis: Individual firm & industry in which it operates

Strategic cost analysis: understanding firm's cost structure for competitive advantage


Strategic formulation in mgt a/c both conventional & strategic perspectives summary

Strategic management-carries the strategic planning process one step further









Strategic cost mgt approach ana:1 value-chain ana, 2 cost-driver ana 3 competitive-advantage. Porter lack of link between strategic & financial analyses

Strategic formulation support role by mgt a/c: integration of costs into strategy by cost ana; determining cost structure of competitors


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Strategic mgt a/c definition-external industry & market factors & consideration of internal issue






Strategic mgt a/c approaches:1 evaluation competitive position, 2 strategic cost analysis,3 quality,4 life-cycle cost 5 target cost

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CAP & ABC 3.28 SA3.07



ABM & ABC 3.30




Turney: Activity-based mgt (ABM) 3.31 F3.9

Value-adding & non-value-adding 3.32 CS3.4



ABC 3.18 F3.6 EX3.2





Strategy implementation mgt team attributes 4.07

















Benchmarking 3.75









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World-class manufacturing & ser face 5.34








Strategy implementation process 4.06-07







Porter 2.29





Strategies means by achieved objective 2.06









Cost centers 5.18




Campi: ABM 3.36


Turney-five guidelines cost reduction 3.33


Sharman: lower level closer Morrow 3.24




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CAP-Connolly 3.28



CAP 3.29 SA3.08










Target costing 3.65


Profit margins 3.39























Triple bottom-line rept 4.40 SA4.12





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Shoebridge-Forster's Light 2.33



Ward, K-Strategic mgt a/c 2.07 F2.2
















Strategy: Concentration/diversification 2.09















Value chain analysis in internal analysis 2.22


Strengths & weaknesses 2.18-19



Wheelen, T.L.-important variables 2.16 T2.1

1.18



Target costing 3.65




Kodak 1.42 Ex1.10


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Service&Manufacture co consider factor 1.20

USAF Manufacturing Tech. Prog Status 4.13 CS4.1

Twinings penetration strategy 3.70 EX3.9








Shank & Govidnarajan-role for mgt a/c 3.59 F3.11












Ward-Mgt a/c definition 1.15



Strategic mgt a/c-mgt a/c expand role 1.05 SA1.02


Kaplan 1.48

Strategic mgt accountant's role 'post-imp 4.29



Mgt accounting 1.03





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5.11 SA5.01






Strategy implementation most 'visible' 4.06 SA4.1











Strategic consideration project appraisal 4.30




Traditional a/c sys & ABC 3.48 SA3.13









Type of activity 5.14

Source of discrimination 5.13


5.12






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5.24




Speed & frequency of communication 5.14

Standards or targets 5.13




4.20********











Strategy implementation: process approach 4.09


Process mgt 4.10





Profit centers 5.19












Shank & Govindarajan: quality strategic 3.59


Shank & Govindarajan-3 phases 3.55




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Shank & Govindarajan: quality mgt *** 3.55 T3.4*****

Schools of quality mgt 3.53











5.28 EX5.3****


Strategy: Turnaround/divestment 2.09













Terziovski & Samson in Langfield-Smith 2.08 EX2.1

Strategy: Stability strategies(no change) 2.09


Benchmarking 3.73

Strategic analysis starts with analysis 2.10

Strategic consideration-TQM 3.53


Value-chain approach&analysis 3.37

Shank & Govindarajan: strategic cost 3.37

3.76


Strategic formulation in mgt a/c 3.79-80

3.35

Strategic planning-long term plan 2.04

2.07


Shank & Govindarajan: strategic & financial. Porter lacks

Strategic mgt a/c regard any notion of widespread practice implementation


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Strategic mgt a/c approaches 3.35-36

Strategic mgt a/c 1.47-48


Bromwich 1.47


Clarke 1.47


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Toyota launched Camry move to new manufacturing facility; Perception Inc non-financial






Strategy-1 Market penetration 2 market development 3 product development 4 diversification





Value-adding reduce product service in long run, non-value-adding poor process, planning



























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Strategic mgt a/c survey value-adding activities 'rendered invisible by submerging o/h pool'






TQM vs BPR-TQM continuous improvement, BPR radical change 'clean slate'




Target costing strategic aspects: Japanese cost reduction strategy by target costing


Strategic mgt: focus on mkt & retain customers & repel competitors; cost position competitor

TQM: Japanese organisation's strategy suggest mgt a/c sys will be in support








ABC & CAP analysis











Toyota: concentrating on time take in performing critical operation as production, dealer ordering, lant scheduling & new prod dev



Strategies: allow strategic benefits to be without precise quantification & tested against managerial experience: monetary benefit & scale benefits can't converted into financial terms

Target costing process: 1 determine target price 2 calculate target profit 3 calculate target cost 4 value-engineering teams to reduce cost (drifting cost) 5 set aggregate cost & monitor cost



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Target costing: targeted profit; target profit margin from the target price

Value engineering involves a systematic evaluation of all aspects or R&D



Strategy build int'l building material group: growing int'l


TQM: continual improvement; customer focus & employee empowerment on benchmarking


Strategic-mgt model-example of strategy formulation/implementation/evaluation

Strategic-Mgt model-Dev mission>audit>long-term objective>select strategies>policies






TQM build incrementally on ongoing basis & BPR one-off solution to a problem


Strategy formulation process Phase 2: Competitive priorities 1quality 2lead-time 3cost 4flexibility 5innovation 6dependability










Value-chain ana: 2nd step identify critical activities on competitive advantage. A/C data not likely correspondence between critical activities by value chain & responsibility centers



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Strategy differentiation-e-tailing: Dstore-online department store: success online






Charges & taxes








Subsidies & tax concessions

Sustainable development-maintaining dwindling supply nature resources for future generations














Value chain not a collection of independent activities but a complex interdependencies












Strategy formulation process Phase 3&4 Gap analysis remains mgt tool despite internal & external environments are changing

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Technology-improvement innovation & dev in research, product design, prod, distribution..








Strategic mgt: activity or transaction-costing emphasis on internal cost & cost to product



Strategic-1 strategic analysis 2 strategic choice 3 strategy implementation 4 evaluation & control






Traditional 'value adding': shareholder wealth; customer satisfaction; employee productivity in $-oriented


Kodak-TQM


















Value-chain ana: 4th step Linkages & interrelationships: Linkage can between variety of configuration of value chains F3.10 A/C sys assume independence of sub-unit basic & questionable method of modeling interdependence

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Strategic role, critical success factor, long vs short-term, measurement & rept







Technology development affected Mgt a/c








Traditional purpose of mgt accounting-1 Score keeping,2 attention directing 3 Problem solving

Sydney Electricity-Role of mgt a/c in an empowered organisation 'info need of mgt change'




Strategy implementation process leading-senior mgt lead implementation process






Strategy formulation process Phase 5: choice strategies on quantitative & qualitative evaluation



Non-financial performance measures - reading


Value-adding & non-value-adding activities and costs











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Time: 1 new product to mkt 2 on-time delviery 3 time taken to meet customer request service























Supplier performance: frequency & defect%; on-time delivery; price fairness & settlement terms; cooperation in solving problems




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Transfer pricing is a key component of most undergraduate mgt a/c courses


Strategic mgt benefit-1 clearer sense,2 sharper focus,3 understanding changing environment












Switching costs-current competitors' product high cost to changing to an alternative

Threat of substitute products or services-direct substiture&substitute fulfils same need


Strategic mgt: opportunity to satisfy consumer by value chain achieve competitive advantage

Value chain-basis for strategic cost analysis and cost mgt generally


Strategic mgt accountants: Project not only achieve financial goal also for social & environmental expectations.


Successful: involvement decision-makers; policies regularly updated & review; assigned responsibilities

Strategic mgt tool: 1 New entrants 2 Buyers 3 Suppliers 4 Substitutes 5 Industry Competitors













Strategic mgt: qualitative objective ex. To be a 'responsible community member'

Strategic mgt focus on objectives rather than goals


Value chain-value creating activities: 2 segments upstream-r&d, growth, product engineering & downstream-distribution, mkt, after sales services

Value-chain ana data collecting: 3 area:1 structural issues 2 linkage & interrelationship 3 traditional budget vs value-chain concept






Value-chain ana: 3rd step Defining prod in three-fold 1 physical prod not a/c for value creation 2 traditional a/c sys not non-manufacturing 3 physical prod not major source value to buyer. A/C data hard to identify buyer value, costs., revenue & assets to cost objectives

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Time-related - state time period over the objective: ex. Achieve 5% ROI in 5 years




Strategy formulation process Phase 6 Dynamic environment embedded in feedback concept








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ABC 3.18 F3.6 EX3.2


ABM & ABC 3.30


Alpha mgt focus strategic factors 4.30-31 CS4.5-4.7






Ansoff four separate strategies 2.29 F2.13


5.24








Atkinson et al 3.31










Benchmarking 3.75






Benchmarking 3.73






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Boromwihc & Bhimani-survey 3.52;53







Bower & Hout: Toyota 5.39



BPR-innovation vs TQM-improvement 4.11 T4.11



Bromwich 1.47






Bromwich: strategic mgt a/c 3.35

Bromwick & Bhiman support TQM 3.58








Campi: ABM 3.36

CAP 3.29 SA3.08

CAP & ABC 3.28 SA3.07

CAP-Connolly 3.28





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Clarke 1.47



3.08











2.07


Cost centers 5.18







Critical activities: 2nd step 3.47




CSR Ltd 2.09 EX2.2


Customer focus&employee empowerment 4.11


David, F.R.-Cimprehensive strategic-mgt 1.38 F1.8

David, Fred R-Strategic mgt 2.04 F2.1






Devenport & Short-TQM & BPR 4.13 SA4.04


Competitive priorities: Objectives of business Phase 2


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Dstore online department store 3.70-71 EX3.10


































3.09 SA3.3





Hergert & Morris 3.37

Gap analysis-current strategy can achieve objectives: Phase 3&4

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Information Technology 1.23










Johnson & Kaplan: costing approach 3.35




Johnson & Scholes-Strategic mgt 2.04



Kaplan 1.48



Kaplan&Norton:5 perspective 'wellbeing' 4.38-39



Kodak 1.42 Ex1.10












Linkages & interrelationships 3.48-49 F3.10


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Mgt a/c developed framework 1.44








Mgt a/c-technology dev 1.24








Mgt accounting 1.03

Mgt accounting in last decade 1.04

Mgt accounting practice 1.07 Ex 1.1






Mgt implementation style 4.07 F4.3







Navigating to objective: Phase 5 3.09



Non-financial performance measures 5.44 SA5.07


Non-value-adding activities & costs 3.31-32






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1.18








5.28 EX5.3****


























4.20********




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Porit central 3 types decision 5.33

Porter 2.29

Porter, M. E.-Competitive advantage 2.24 F2.11

Porter, Michael: objective of strategy 2.06


Porter, Shank & Govindarajan, Hergert & Morris 3.46















Porters: costing approach 3.35

Porter-value chain/differentiation 1.28 F1.5


4.28





Post-implementation successful principle 4.29

Poter's Industry analysis 2.11-12 F2.4



Process mgt 4.10


Product or product group segregated: 3rd step 3.48

Profit centers 5.19



Profit margins 3.39






Qualitative objective: difficult to evaluate 2.05

Qualitative objective: measurable 2.05


Post-implementation audit concern: social & environmental;

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Realistic & achievable 2.06




Review of objective & strategy: Phase 6 3.09








cpa104 (author: laikwan)

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