lOMoARcPSD|6536636
CPA Australia - SMA - M1
Summary
Strategic Management Accounting (Macquarie
University)
, lOMoARcPSD|6536636
Module 1: Introduction to strategic management
accounting
Preview
Introduction
SMA is defined as creating sustainable value by:
supporting the formation, selection, implementation and
evaluation of organizational strategy + synthesising
information that captures financial and non-financial
perspectives for both the internal and external
environments, to enable effective resource allocation.
Entities are like 8linked chains9 of resources and
activities that produce products and services of value to
consumers and end users.
Essential requirements for successful performance: 1.
generate products and services with value that consumers
are willing to pay for. 2. constantly develop and improve
the resources, activities and processes used to generate
that value.
For value creation = a clear strategy, based on a vision
and mission that combine resources (including people,
technology and time) + effective use
information flow from the strategic level to the
operational level and feedback and reporting come back
from the operational level.
The organisation must also be aware of the external
environment in which it operates. Like competitor
activity and the broader economic and regulatory
1
, lOMoARcPSD|6536636
environment, etc, so that organization can adapting to
change.
The management accountant is at the centre of all these
activities.
Part A: Value
Value influence an organisation9s behaviour and drive
org to achieve its vision, mission and goals. It combines
resources in a manner that creates desirable outcomes.
The role of management accountants is to support
management in creating, managingand protecting value.
There are a range of stakeholders, shareholder,
employees, customers, suppliers, regulators, lenders and
community groups. Each group has its own interests and
desires and therefore its own definition of the 8value9 it
wishes to receive from an organisation.
Value creation in contemporary organisations is based on
creativity and innovation. Including new materials,
technologies and processes, as compared to value
creation in the past, which was based on economiesof
scale and mass production.
Shareholder value
The ultimate outcome for many organisations is to
generate wealth for the owners. However, to ensure that
an organisation is able to create shareholder value over a
prolonged period, its actions and use of resources need to
be sustainable.
2
, lOMoARcPSD|6536636
Customer value
The primary task for an organisation is to create an
output that has customer value at a cost that is lower than
the price the customer is willing to pay, which leads to
profitability and creates shareholder value.
Figure 1.3 shows a simple version of the organisational
value chain. This provides an overview of how the
organisation performs a sequence of activities to provide
outputs or outcomes to create customer value.
Figure 1.3: Organisational value chain
Business cycle: operation-sale-distribution-after sale
Support activities: RD-Accounting-HR-IT and infrasture
Stakeholder value
Shareholder wealth based on generating value from
others. To create products or services, an organisation
will require community permission who will only supply
their effort if conditions are adequate.
Which viewpoint should be taken when determining
8value9?
The most obvious perspective says value is anything that
is good for the business. While others believes including
that of society.
People are interested in org9s economic value and how it
is created and org impact. CSR reporting helps people
understand those from a social and environmental
perspective and increase org9s level of ethics and
accountability.
3
CPA Australia - SMA - M1
Summary
Strategic Management Accounting (Macquarie
University)
, lOMoARcPSD|6536636
Module 1: Introduction to strategic management
accounting
Preview
Introduction
SMA is defined as creating sustainable value by:
supporting the formation, selection, implementation and
evaluation of organizational strategy + synthesising
information that captures financial and non-financial
perspectives for both the internal and external
environments, to enable effective resource allocation.
Entities are like 8linked chains9 of resources and
activities that produce products and services of value to
consumers and end users.
Essential requirements for successful performance: 1.
generate products and services with value that consumers
are willing to pay for. 2. constantly develop and improve
the resources, activities and processes used to generate
that value.
For value creation = a clear strategy, based on a vision
and mission that combine resources (including people,
technology and time) + effective use
information flow from the strategic level to the
operational level and feedback and reporting come back
from the operational level.
The organisation must also be aware of the external
environment in which it operates. Like competitor
activity and the broader economic and regulatory
1
, lOMoARcPSD|6536636
environment, etc, so that organization can adapting to
change.
The management accountant is at the centre of all these
activities.
Part A: Value
Value influence an organisation9s behaviour and drive
org to achieve its vision, mission and goals. It combines
resources in a manner that creates desirable outcomes.
The role of management accountants is to support
management in creating, managingand protecting value.
There are a range of stakeholders, shareholder,
employees, customers, suppliers, regulators, lenders and
community groups. Each group has its own interests and
desires and therefore its own definition of the 8value9 it
wishes to receive from an organisation.
Value creation in contemporary organisations is based on
creativity and innovation. Including new materials,
technologies and processes, as compared to value
creation in the past, which was based on economiesof
scale and mass production.
Shareholder value
The ultimate outcome for many organisations is to
generate wealth for the owners. However, to ensure that
an organisation is able to create shareholder value over a
prolonged period, its actions and use of resources need to
be sustainable.
2
, lOMoARcPSD|6536636
Customer value
The primary task for an organisation is to create an
output that has customer value at a cost that is lower than
the price the customer is willing to pay, which leads to
profitability and creates shareholder value.
Figure 1.3 shows a simple version of the organisational
value chain. This provides an overview of how the
organisation performs a sequence of activities to provide
outputs or outcomes to create customer value.
Figure 1.3: Organisational value chain
Business cycle: operation-sale-distribution-after sale
Support activities: RD-Accounting-HR-IT and infrasture
Stakeholder value
Shareholder wealth based on generating value from
others. To create products or services, an organisation
will require community permission who will only supply
their effort if conditions are adequate.
Which viewpoint should be taken when determining
8value9?
The most obvious perspective says value is anything that
is good for the business. While others believes including
that of society.
People are interested in org9s economic value and how it
is created and org impact. CSR reporting helps people
understand those from a social and environmental
perspective and increase org9s level of ethics and
accountability.
3
