Question

Do you know, without looking at the syllabus, what is Strategic Management Accounting?

Please do surface research on the web, just enough so you can start making up a map in your head about what we will be looking into during the term. Then start a discussion answering the following questions.

1. Did you know what SMA is about before this class?

2. If Yes, Please share your experience

3. If No, based on the name alone what did you imagine it would be

4. After Your research, (even if you already knew what it was) did your view change? As a thought what are the implications of this subject and why is it relevant to your Specialization.

5. Does the topic interest you beyond the scope of your MBA? If so, expand on your answer.

Answer 1

Strategic Management Accounting

1. Till commencement of this class, I know that, the term 'Strategic Management Accounting' was introduced in 1981 and was defined as 'the provision and analysis of management accounting data about a business and its competitors, for use in developing and monitoring business strategy'. Apart from the definition I doesn’t have any knowledge on the same.

2. N/A

3. As far as my imagination, Strategic Management Accounting is a concept wherein we use the Management Accounting data for various Strategic decision making through analysis.

4. The below are my research results:

Strategic Management is monitoring, evaluation, decision making and execution of strategy. The setting and measuring of KPI's are critical to either improve or redefine strategy. In today's world of online business and especially marketing, technologies such as big data and analytics can make organizations flexible and fast to react, or proact as the case may be. The main objectives of Strategic Management will be to ensure that the strategies are being executed and that the results are conveyed for decision making on how to proceed.

A strategic approach to management accounting also requires collection of data from the external environment. The process of strategic management includes goal setting, analysis, strategy formation, strategy implementation, and strategy monitoring.

Business owners use strategic management accounting to review the costs associated with these activities to ensure the company does not lose its relative cost position.

Techniques in Strategic Management Accounting:

• Target Costing
• Kaizen Costing
• Life Cycle Costing
• Theory of constraints
• Bench Marking
• Activity-Based Management
• Just-In-Time Method

Types of Strategies in Strategic Management:

• Competitive Strategy
• Corporate Strategy
• Business Strategy
• Functional Strategy
• Operating Strategy

7 Steps of Effective Strategic Planning Process

• Step 1 – Review or develop Vision & Mission
• Step 2 – Business and operation analysis
• Step 3 – Develop and Select Strategic Options
• Step 4 – Establish Strategic Objectives
• Step 5 – Strategy Execution Plan
• Step 6 – Establish Resource Allocation
• Step 7 – Execution Review

5. Considering the nature and benefits of Strategic Management Accounting obviously it creates interest in me and certainly it is useful for my studies and practical application. All the benefits and advantages are mentioned in my research results above (refer Answer to Question 4 above).