Complete Summary
Enterprise Performance Management Year 1
University of Melbourne
2024/2025
Complete with visuals
Literature: Enterprise Performance Management A Complete Guide
Gerardus Blokdyk
,
,LEARNING OBJECTIVE 1:
Explain the concepts of management accounting and control
Virgin Airlines’ management accounting case questions
1. What factors might force an organisation such as an airline to review its strategic
direction?
2. What role might management accounting and control information play in developing
new strategic direction?
3. What role might management accounting play in monitoring the success of the new
strategic direction?
Traditionally: “Management accounting is the process of gathering, summarising, and
reporting financial and non-financial information used internally by managers to make
decisions” – Eldenburg et al 2010
More broadly, management control information has evolved to include a broader scope of
information than a traditional management accounting definition. This information may include
external information relating to processes, predictive information, as well as informal personal
and social controls and may serve multiple roles and decision contexts.
Essentially, management accounting and control is all about managing the organisation.
, For example, organisations might require management accounting and control information to:
Direct resources; consider investment opportunities; manage and improve production and/or
service delivery performance; improve quality; meet customer/client expectations; evaluate
customers and suppliers, develop suitable incentives.
Ultimately, management accounting and control information helps in the management of
organisations through:
• Directing behaviour, e.g. through the use of performance measures, incentives, bonuses
and rewards.
• Providing a mechanism for information provision and therefore facilitate decision-
making (e.g. providing cost information for pricing decisions) and/or influence decision-
making (e.g. advising on strategy)
• Providing feedback on performance across the organisation, e.g. formally in
performance appraisals
• Facilitating learning, e.g. getting better at what we do
4 FUNCTIONS OF CONTROL (SEE FLAMHOLTZ ARTICLE FOR A DETAILED
EXPLANATION OF EACH FUNCTION)
• Motivate decisions and actions consistent with organisational objectives and strategies
• Integrate the efforts of several different parts of the organisation (Avoid too much
“silo-mentality” – one department does not know what the other department is doing)
• Provide information about the results of operations and people’s performance
• Facilitate the implementation of strategic plans
BROADER ORGANISATIONAL CONTROL SYSTEM
LEARNING OBJECTIVE 2
Enterprise Performance Management Year 1
University of Melbourne
2024/2025
Complete with visuals
Literature: Enterprise Performance Management A Complete Guide
Gerardus Blokdyk
,
,LEARNING OBJECTIVE 1:
Explain the concepts of management accounting and control
Virgin Airlines’ management accounting case questions
1. What factors might force an organisation such as an airline to review its strategic
direction?
2. What role might management accounting and control information play in developing
new strategic direction?
3. What role might management accounting play in monitoring the success of the new
strategic direction?
Traditionally: “Management accounting is the process of gathering, summarising, and
reporting financial and non-financial information used internally by managers to make
decisions” – Eldenburg et al 2010
More broadly, management control information has evolved to include a broader scope of
information than a traditional management accounting definition. This information may include
external information relating to processes, predictive information, as well as informal personal
and social controls and may serve multiple roles and decision contexts.
Essentially, management accounting and control is all about managing the organisation.
, For example, organisations might require management accounting and control information to:
Direct resources; consider investment opportunities; manage and improve production and/or
service delivery performance; improve quality; meet customer/client expectations; evaluate
customers and suppliers, develop suitable incentives.
Ultimately, management accounting and control information helps in the management of
organisations through:
• Directing behaviour, e.g. through the use of performance measures, incentives, bonuses
and rewards.
• Providing a mechanism for information provision and therefore facilitate decision-
making (e.g. providing cost information for pricing decisions) and/or influence decision-
making (e.g. advising on strategy)
• Providing feedback on performance across the organisation, e.g. formally in
performance appraisals
• Facilitating learning, e.g. getting better at what we do
4 FUNCTIONS OF CONTROL (SEE FLAMHOLTZ ARTICLE FOR A DETAILED
EXPLANATION OF EACH FUNCTION)
• Motivate decisions and actions consistent with organisational objectives and strategies
• Integrate the efforts of several different parts of the organisation (Avoid too much
“silo-mentality” – one department does not know what the other department is doing)
• Provide information about the results of operations and people’s performance
• Facilitate the implementation of strategic plans
BROADER ORGANISATIONAL CONTROL SYSTEM
LEARNING OBJECTIVE 2
