PART A: VALUE SMA functions 2. Strategic planning and choice
INTRODUCTION (pg. 3) • provide forward-looking information to assist management Involving developing specific strategies, actions and me
Primary objective of SMA in decision-making. For example part of Apple’s success is due to its unique
Is the creation of sustainable value for organisations to • evaluates external information e.g. trends in costs, prices, features of products and how these features and produ
improve an organisation outcomes. market share, competitors, suppliers and technologies— complement each other e.g. iPod that plays music from
Role of Management Accountants (pg. 3) and their impacts on resources which can be stored on Apple’s Mac computer
To support management in creating, managing and protecting • uses a wide range of tools and techniques that support 3. Strategic implementation
value. each stage of the strategic management process. Involves creating an effective organisational structure,
Value (pg. 3) • Enables and it is a catalyst that helps initiate and drive organisational processes and culture.
Involve Increasing shareholder wealth. However, this is both strategic management activity. For example, the rate of Amazon’s innovations in suppl
narrow and simplistic because it ignores other important and • helps organisations in their desire to create long-term, management has been significant, with investment in s
interested parties or stakeholders sustainable value that is of benefit to all stakeholders. chain automation lessening the overall product delivery
Each group has its own interests and desires so its own PART B: THE STRATEGIC MANAGEMENT PROCESS and increasing the number of warehouses.
definition of ‘value’ it wishes to receive from an organisation. BROAD CATEGORIES OF MANAGEMENT ACTIVITY: 4. Strategic evaluation (performance measurement,
Failure to consider stakeholder needs and desires will make it Broad differences between strategic and operational feedback and review)
difficult to maintain and increase shareholder wealth. management (pg. 8) Involves measuring performance, providing feedback a
Shareholder Value (pg. 3 – 4) Strategic Management Operational management undertaking continuous review for improvement.
Organisations seek to generate wealth for the owners. The Directly linked to survival of an Not directly linked, but indirectly Focus of every organisation is to lead strategically to at
owners have either started or invested in the organisation to organisation influences organisational survival long-term goals. How managers interpret the performa
Organisation-wide Relates to specific operations of the
obtain appropriate returns for the risk involved. critical to evaluating strategy.
phenomenon organisation
Actions to create shareholder value need to be sustainable e.g. Long-term process Focused on short and medium terms Operational Management (pg. 7 – 9)
if natural environment is not acknowledged, long-term Involves non-routine activities Involves routine day-to-day activities Focus on the medium to short-term tasks of running an
sustainable shareholder value is unlikely to be achieved. Sometimes very ambiguous Does not involve any ambiguity Underneath the senior management team (which focus
Customer Value (pg. 4) Requires high-level strategic Requires tactical management strategic management) are the operational managers w
Primary task is to create an output that has customer value. A management orientation orientation and focus on doing, Should be a strong link between senior and operationa
implementing and achieving
Requirement is to produce outputs at a cost lower than the operational excellence
management via the strategic implementation phase.
price the customer is willing to pay, this leads to profitability Manages critical success factors Performs activities on a day-to-day • However, strategy often fails at the implementatio
and creates shareholder value. (CSFs) of the organisation basis due to poor integration of the strategic and operat
Organisational Value Chain (pg. 4) Strategic Management (pg. 6 – 7) levels as formal strategies are often ignored or pos
The strategic management process involves: as day-to-day issues receive all the attention.
• addressing key issues, including determining the vision, Strategic management supports operational planning w
mission and purpose of an organisation tools including budgeting, costing systems and variance
• setting specific objectives analysis. Constant feedback is required for an organisat
• creating + implementing strategies to achieve these achieve short-term plans.
objectives. • If there is a deviation from plan, the objective may
Stakeholder Value (pg. 4) The Strategic Management Process (pg. 6 – 7) be adjusted or controls put in place to correct situa
By-product of generating value in other areas SMA - line managers (pg. 9 – 10)
Which Viewpoint Should Be Taken When Determining Orgs have become leaner with fewer employees and ha
‘Value’? (pg. 4 – 5) their hierarchies flattened with reduced levels of mana
Collecting and communicating key performance inform
are now delegated to line managers and employees.
MAs are required to provide support and training to as
, PART D: THE KEY CHALLENGES FACING MANAGEMENT Structural change (pg. 18 – 21) Technology (pg. 23– 25)
ACCOUNTANTS Economies are experiencing significant change in terms of: Capital equipment (pg. 24)
CHALLENGES (pg. 15 – 17) • average growth rates • Physical systems and processes allow organisations
Technology (pg. 15 – 16) • government philosophy on spending convert raw materials into outputs faster, with mor
Effective implementation of major information system projects • government, company and individual debt levels • efficiency and less waste
presents both a challenge and an opportunity. • consumer spending habits Information and communication technologies (pg. 24
Technology has allowed the automation of traditional number- • new regulations. Some important trends that have arisen and need to be
crunching activities and provides the tools to improve the Examples of structural change managed carefully:
quality of information provided to management which has • significant reductions in spending so that government debt • Cloud computing - has enabled the development of
increased expectations of management accountants may be reduced. internet-based storage, software applications and
Managing resources (pg. 16) • new regulations aimed at minimising or preventing the programs,
The following areas should be mastered: same types of problems that caused the GFC e.g. Basel III - benefits including reduced costs in storage, in-h
• Effective use and control of assets are required for Globalisation (pg. 21 – 23) technical knowledge and need to deploy employ
superior results. Significant reductions in trade barriers, lower transport costs, globally, instant access to organisational inform
• cash flow management and SCM increasing competition across national borders, large - Risks of this approach include exposure to data
• forecasting and scheduling tools, achieving reductions in multinational corporations, unrestricted capital flows and theft, privacy issues and jurisdictional issues.
inventory levels and maintaining effective links with faster information transfers have all had a significant effect on • Employee-owned devices and open systems:
suppliers are necessary organisations - a much greater risk of loss of confidential infor
Innovation (pg. 16) Creates difficult issues that must be addressed include: or IP in more open systems
Drives competitiveness by creating efficiencies and new and • taxation - Policies that encourage efficiency and protect
better products. • protection of IP as well as technical integration with company-
Innovation is an • cross-border money laundering software are key areas that management acco
• outcome—that is, a new product or service • financing of illegal activities may be involved in.
• process—a combination of decisions, structures, resources • different cultures, rules and levels of enforcement in • Big data (explored more in Module 2)
and skills that produce outputs and outcomes. different countries and regions. - Data collected and stored is growing exponentia
In a more competitive environment, constant innovation is Four main drivers of globalisation: often in unstructured or difficult-to-analyse form
required to achieve objectives, often through small, minor 1. global competition Provides significant insights into customer beha
improvements but may also involve radical change • Reasons to expand globally: and business activity.
CAUSES OF CHANGE IN THE BUSINESS ENVIRONMENT (pg. 17 - local market for goods are saturated or in decline. Sustainability (pg. 25– 31)
– 31) - pursuing rapid growth. Corporate social responsibility—a stakeholder focus (p
Causes of change in the contemporary business environment - obtaining lower-cost raw materials and labour. The focus on sustainability means there is:
(pg. 18) - may be a defensive strategy because low-cost • broader consideration of qualitative and non-financ
competitors have entered their domestic market. factors when making decisions about long-term pro
- avoid trade barriers such as quotas • stronger focus on reporting a broader range of info
- internet has also enabled smaller organisations to and being held accountable for more than just econ
immediately compete globally. results
2. physical and capability factors – Management accountants will be involved in preparing
• A series of breakthroughs, particularly rapid advances types of reporting:
in transport and communication, have encouraged • Environmental reporting
- economies of scale • Social reporting
- outsourcing of component supplies to low-cost • Sustainability reporting—combines environmental
countries social information with economic performance.
INTRODUCTION (pg. 3) • provide forward-looking information to assist management Involving developing specific strategies, actions and me
Primary objective of SMA in decision-making. For example part of Apple’s success is due to its unique
Is the creation of sustainable value for organisations to • evaluates external information e.g. trends in costs, prices, features of products and how these features and produ
improve an organisation outcomes. market share, competitors, suppliers and technologies— complement each other e.g. iPod that plays music from
Role of Management Accountants (pg. 3) and their impacts on resources which can be stored on Apple’s Mac computer
To support management in creating, managing and protecting • uses a wide range of tools and techniques that support 3. Strategic implementation
value. each stage of the strategic management process. Involves creating an effective organisational structure,
Value (pg. 3) • Enables and it is a catalyst that helps initiate and drive organisational processes and culture.
Involve Increasing shareholder wealth. However, this is both strategic management activity. For example, the rate of Amazon’s innovations in suppl
narrow and simplistic because it ignores other important and • helps organisations in their desire to create long-term, management has been significant, with investment in s
interested parties or stakeholders sustainable value that is of benefit to all stakeholders. chain automation lessening the overall product delivery
Each group has its own interests and desires so its own PART B: THE STRATEGIC MANAGEMENT PROCESS and increasing the number of warehouses.
definition of ‘value’ it wishes to receive from an organisation. BROAD CATEGORIES OF MANAGEMENT ACTIVITY: 4. Strategic evaluation (performance measurement,
Failure to consider stakeholder needs and desires will make it Broad differences between strategic and operational feedback and review)
difficult to maintain and increase shareholder wealth. management (pg. 8) Involves measuring performance, providing feedback a
Shareholder Value (pg. 3 – 4) Strategic Management Operational management undertaking continuous review for improvement.
Organisations seek to generate wealth for the owners. The Directly linked to survival of an Not directly linked, but indirectly Focus of every organisation is to lead strategically to at
owners have either started or invested in the organisation to organisation influences organisational survival long-term goals. How managers interpret the performa
Organisation-wide Relates to specific operations of the
obtain appropriate returns for the risk involved. critical to evaluating strategy.
phenomenon organisation
Actions to create shareholder value need to be sustainable e.g. Long-term process Focused on short and medium terms Operational Management (pg. 7 – 9)
if natural environment is not acknowledged, long-term Involves non-routine activities Involves routine day-to-day activities Focus on the medium to short-term tasks of running an
sustainable shareholder value is unlikely to be achieved. Sometimes very ambiguous Does not involve any ambiguity Underneath the senior management team (which focus
Customer Value (pg. 4) Requires high-level strategic Requires tactical management strategic management) are the operational managers w
Primary task is to create an output that has customer value. A management orientation orientation and focus on doing, Should be a strong link between senior and operationa
implementing and achieving
Requirement is to produce outputs at a cost lower than the operational excellence
management via the strategic implementation phase.
price the customer is willing to pay, this leads to profitability Manages critical success factors Performs activities on a day-to-day • However, strategy often fails at the implementatio
and creates shareholder value. (CSFs) of the organisation basis due to poor integration of the strategic and operat
Organisational Value Chain (pg. 4) Strategic Management (pg. 6 – 7) levels as formal strategies are often ignored or pos
The strategic management process involves: as day-to-day issues receive all the attention.
• addressing key issues, including determining the vision, Strategic management supports operational planning w
mission and purpose of an organisation tools including budgeting, costing systems and variance
• setting specific objectives analysis. Constant feedback is required for an organisat
• creating + implementing strategies to achieve these achieve short-term plans.
objectives. • If there is a deviation from plan, the objective may
Stakeholder Value (pg. 4) The Strategic Management Process (pg. 6 – 7) be adjusted or controls put in place to correct situa
By-product of generating value in other areas SMA - line managers (pg. 9 – 10)
Which Viewpoint Should Be Taken When Determining Orgs have become leaner with fewer employees and ha
‘Value’? (pg. 4 – 5) their hierarchies flattened with reduced levels of mana
Collecting and communicating key performance inform
are now delegated to line managers and employees.
MAs are required to provide support and training to as
, PART D: THE KEY CHALLENGES FACING MANAGEMENT Structural change (pg. 18 – 21) Technology (pg. 23– 25)
ACCOUNTANTS Economies are experiencing significant change in terms of: Capital equipment (pg. 24)
CHALLENGES (pg. 15 – 17) • average growth rates • Physical systems and processes allow organisations
Technology (pg. 15 – 16) • government philosophy on spending convert raw materials into outputs faster, with mor
Effective implementation of major information system projects • government, company and individual debt levels • efficiency and less waste
presents both a challenge and an opportunity. • consumer spending habits Information and communication technologies (pg. 24
Technology has allowed the automation of traditional number- • new regulations. Some important trends that have arisen and need to be
crunching activities and provides the tools to improve the Examples of structural change managed carefully:
quality of information provided to management which has • significant reductions in spending so that government debt • Cloud computing - has enabled the development of
increased expectations of management accountants may be reduced. internet-based storage, software applications and
Managing resources (pg. 16) • new regulations aimed at minimising or preventing the programs,
The following areas should be mastered: same types of problems that caused the GFC e.g. Basel III - benefits including reduced costs in storage, in-h
• Effective use and control of assets are required for Globalisation (pg. 21 – 23) technical knowledge and need to deploy employ
superior results. Significant reductions in trade barriers, lower transport costs, globally, instant access to organisational inform
• cash flow management and SCM increasing competition across national borders, large - Risks of this approach include exposure to data
• forecasting and scheduling tools, achieving reductions in multinational corporations, unrestricted capital flows and theft, privacy issues and jurisdictional issues.
inventory levels and maintaining effective links with faster information transfers have all had a significant effect on • Employee-owned devices and open systems:
suppliers are necessary organisations - a much greater risk of loss of confidential infor
Innovation (pg. 16) Creates difficult issues that must be addressed include: or IP in more open systems
Drives competitiveness by creating efficiencies and new and • taxation - Policies that encourage efficiency and protect
better products. • protection of IP as well as technical integration with company-
Innovation is an • cross-border money laundering software are key areas that management acco
• outcome—that is, a new product or service • financing of illegal activities may be involved in.
• process—a combination of decisions, structures, resources • different cultures, rules and levels of enforcement in • Big data (explored more in Module 2)
and skills that produce outputs and outcomes. different countries and regions. - Data collected and stored is growing exponentia
In a more competitive environment, constant innovation is Four main drivers of globalisation: often in unstructured or difficult-to-analyse form
required to achieve objectives, often through small, minor 1. global competition Provides significant insights into customer beha
improvements but may also involve radical change • Reasons to expand globally: and business activity.
CAUSES OF CHANGE IN THE BUSINESS ENVIRONMENT (pg. 17 - local market for goods are saturated or in decline. Sustainability (pg. 25– 31)
– 31) - pursuing rapid growth. Corporate social responsibility—a stakeholder focus (p
Causes of change in the contemporary business environment - obtaining lower-cost raw materials and labour. The focus on sustainability means there is:
(pg. 18) - may be a defensive strategy because low-cost • broader consideration of qualitative and non-financ
competitors have entered their domestic market. factors when making decisions about long-term pro
- avoid trade barriers such as quotas • stronger focus on reporting a broader range of info
- internet has also enabled smaller organisations to and being held accountable for more than just econ
immediately compete globally. results
2. physical and capability factors – Management accountants will be involved in preparing
• A series of breakthroughs, particularly rapid advances types of reporting:
in transport and communication, have encouraged • Environmental reporting
- economies of scale • Social reporting
- outsourcing of component supplies to low-cost • Sustainability reporting—combines environmental
countries social information with economic performance.
