Question

a. Identify the management accounting functions within multinational corporations (MNCs).

b. Explain how those functions are used by MNCs in their foreign investment strategy formulation and implementation.

Answer 1

The fuctions includes the followings

Stewardship Accounting:

Long-term and Short-Term Planning

Developing Management Information System (MIS)

Maintaining Optimum Capital Structure

Participating in Management Process

Control

Decision-Making

Functions area includes the followings:

Strategic Management: Advancing the role of the management accountant as a strategic partner in the organization.

Performance Management: Developing the practice of business decision-making and managing the performance of the organization.

Risk Management: Contributing to frameworks and practices for identifying, measuring, managing and reporting risks to the achievement of the objectives of the organization

B)

Usage of the fuctions of the in staregic formulations:

A guide to the strategic management includes the following:

1. Agreement on initiation of the strategic management process.

2. Identification and clarification of the organization’s mission, objectives, and current strategies.

3. Identification of the organization’s internal strengths and weaknesses.

4. Assessment of the threats and opportunities from the external environment.

5. Identification of key constituents/ stakeholders and their expectations.

6. Identification of the key strategic issues confronting the organization.

7. Design/ analysis/ selection of strategy alternatives and options to manage issues identified in step

8. Implementation of strategy.

9. Monitoring and review of the strategy’s performance.