Q1. What are the key roles which a strategic management accountant would undertake in an organisation such as Jessup?
Strategic management accountant will be related with provisions and accounting information in an organization to the managers.
THE DECISION MAKING PROCESS
Some activities like planning and control comes under decision making process. Because the management accountants give the information produced and those must be judged because one has to see what the outcome of those decisions made is. The decision making process plays an important role in management accounting. Planning and controlling comes under the making of decision process which is in the diagram below.
Planning is one of the most important step of the decision making process. Planning is defined as making choices between alternatives that which one to choose and is an important decision making activity.
Controlling is the process of comparing actual and planned outcomes to ensure that the alternatives chosen are correct and could be carried out. It is also the most important step of decision making in an organization
Identifying objectives mean that before we make a good decision, there will be a direction and an aim that enables the makers of decision access towards favour an action on another. The first stage of decision making in an organization should be to identify the goals and objectives.
SELECT APPROPRIATE COURSES OF ACTION
In the second stage of decision making model is to find possible courses of action because of which the objectives should be achieved. If the company concentrates entirely on its present range of product and markets, and market shares are fallen down, then a danger arises of surviving the company in future. So to survive the company its important that the managers should find threats and opportunities in an environment and must take such steps that the organization would not be surprised if any development is made in future. The organization should use the following courses of action Making of new products in market
Making the new products for the new markets
Making the previous products for new markets
APPROPRIATE ALTERNATIVE COURSES OF ACTION
Information must be gathered accordingly to the growth rates of alternative activities which are not yet identified, the potential of company to make appropriate shares of market. The profits for every single product of the replacement of activity. The alternatives must be selected to appoints ways of action that specifies objectives of organization best.
EXECUTION OF DECISIONS
Once the ways of actions are chosen they also must be executed because of the long time planning process and budgeting. Budget is financial plan for the decision made by the management, to implement different decisions on them. Budgets for various decisions are in cash outflows or inflows, expenses and sales revenues. Those of the budgets are collected into one statement of the organization assumptions for future periods.
COMPARING PLANNED AND ACTUAL OUTCOMES
This is the last stage of making of decision process. It responses to the changing of plans shown in the firms control process. Measurement, subsequent correction and reporting of performance to know that the firm has achieved its objectives is the managing function of controling. The accountant needs to produce performance reports and should present these reports to managing teams who are guilty for the making of different decisions. Performing reports must consist of actual outcomes and planned outcomes and must be issued time to time. Those reports give feedback by comparing the results. The efficient control needs that correct action must be taken so the actual results changes to planned results. (Hiedmann, 2008)
BY CHANGING PRODUCT LIFE CYCLES
It can be defined as the period of time from starting expenses on development and the research to the time by which...
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