Revision Lecture
• Week 1
o Management account refers to processes and techniques that focus on the effective and efficient use of resources to support managers in making decisions
o Financial accounting deals with past information but management does not o Management accounting processes and techniques
• Systems to support strategy formulation and implementation
• Information for planning and control
• Estimates of product costs
o Need to be aware of how information affects stakeholders
• Week 2
o Ethics-system of moral principles that affect how people make decisions and live their lives
o Code of ethics/code of conduct- integrity, objectivity, professional competence and due care, confidentiality, professional behaviour
• Week 3
o Strategy- outline of basic steps that management plans to take to achieve an objective or a set of objectives
o Corporate, business and function strategies o Corporate level strategy
• Growth
§ Concentration
§ Diversification(related or unrelated)
• Stability or pause
§ Continuous improvement
§ Maintain status quo
• Defensive or retrenchment
§ Turnaround
§ Divestiture
§ Liquidation
• Combination
o In a practical question I Need to identify which of the 4 strategies and then the specific one under the section
o Business level strategy
• Cost leadership
§ Broad market
§ Lower costs than competitors
§ High volume of sales to achieve profits
• Differentiation
§ Broad market
§ Unique product in its category
§ Can change a premium price
• Focus (cost leadership/differentiation
§ Narrow market segment o Environmental scanning
• SWOT analysis
§ Internal and external
• Porters 5 forces of competition o Portfolio planning
• BCG matrix- market share vs market growth
§
• GE business screen
• Week 4
o Managing costs
• Activity based management- driver and value analysis - to do with continuous improvement
• Business process re-engineering (BPR)
• Life cycle costing
• Target costing= target price- target profit margin o Managing quality
• Cost of quality report
§ Prevention costs
§ Appraisal costs
§ Internal failure costs
§ External failure costs o Managing capacity
• Capacity= time available/time needed for tasks
• Design capacity
• Effective capacity
• Actual capacity
o remove bottle necks by--- investing in more machinery etc
• Week 5
o Managing suppliers- supplier selection criteria e.g. cost, quality and delivery o Total cost of ownership= total supplier activity costs +total purchase price o Managing customers--- collecting and analysing data to understand individual
customers behaviour patters and needs
• Week 6
o Decentralisation- restructuring of the organisation into units
o Goal congruence- alignment of goals of managers with the goals of the organisation o Responsibility centre- a unit in an organisation where the manager is held
accountable for the units activities and performance
• Week 7
o Financial measures- ROI, RI and EVA
• Week 8
o Balance scorecard- tool that translates an organisations mission, objectives and strategies into performance measures that can be used to monitor and manage organisation performance
• 4 perspectives- financial, customer, internal business process, learning and growth
o Benchmarking- comparing activities to other benchmarks
• Week 9
o Control- process of measuring performance and taking action to ensure desired results
o Input/feedforward- controls in place to ensure right directions are set o Process/concurrent -
o Feedback/output controls - to ensure final results are up to standards o Simons levers of control:
• Belief system
• Boundary systems
• Diagnostic controls systems
• Interactive control systems
• Week 10
o Theories of motivation
• Content theories- are concerned with needs of humans and how they act/work/effort put into work
§ Maslow's hierarchy of needs
§ Herzberg's 2 factor theory
• Process theories
§ Expectancy theory
§ equity
• Reinforcement theory
§ Positive reinforcement
§ Negative reinforcement
§ Extinction
§ Punishment
• Week 11
o Corporate sustainability - interrelated impacts of activities on economy, environment and society
o 5 tiers of environmental costs- conventional, hidden, contingent, relationship and image, and societal costs