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Strategic Management and Organisational Structure

In the 1960s and 1970s strategic planning consisted of complex and bureaucratic processes which culminated in a comprehensive strategic plan. Over time it was realised that this type of strategic plan was of little use, as changes in conditions and unexpected events made the plan obsolete. The main benefit of this type of planning was the process itself, which increased understanding of the organisation and its situation. Modern planning systems tend to be more flexible and informal. The plans produced focus on general principles and trends, rather than detailed actions.

Managerial Ethics and Social Responsibility

Business ethics has come to the fore recently following a series of corporate collapses caused by dishonest behaviour by senior executives. One such case was the well-publicised failure of US energy giant Enron which resulted from dishonest accounting aimed at boosting the stock price. Public concern over global warming and environmental pollution has forced organisations to confront the issue of sustainable and responsible development.

Understanding the Organisational Environment and Culture

Most managers are faced by an overload of information, so a key skill they need is the ability to filter information to identify what is relevant to the organisation. They also need to analyse information to understand its significance and to communicate it to those who need to act on it. Effective knowledge management can give the organisation a competitive advantage. A major aspect of the organisation's external and internal environment is culture. Managers have to be sensitive to the culture around them.

Topic Ten: Managerial Decision Making

Cost-volume-profit (CVP) analysis involves studying the interrelationships between; the prices of products, the volume or level of activity, variable costs per unit, total fixed costs and the mix of products sold. Cost-volume-profit analysis is a key factor in many decisions, including choice of product
lines, pricing of products, marketing strategy and use of production facilities. Let us now examine the various types of cost-volume-profit analyses that are available.

Topic Nine: Performance Measurement Considerations

Performance measures are metrics that monitor our effectiveness in performing an activity and our efficiency in using resources. Efficiency is the attainment of maximum output with minimum resources. Improved efficiency is achieved if fewer inputs are used to produce a given amount of output, or a given level of input leads to increased output. Effectiveness is concerned with ensuring that the output from any given activity is achieving the desired
results.

Topic Eight: Budgeting and Capital Investment

Nearly everyone budgets to some extent, even though some people may not recognise what they are doing as budgeting. They estimate income, plan expenditures and restrict spending in accordance with the plan. They use estimates of income and expenditures to predict their future financial condition. Whilst such budgets may exist only in the mind of the individual, they are budgets nonetheless.

Costing Systems and Cost Control

We start this topic with an introduction to the process of assigning costs to individual products to determine total product cost. We then discuss the two 'traditional' absorption costing systems—job costing and process costing - before looking at two other systems ncreasingly being adopted: just-in-time and activity-based costing. We will also briefly discuss the nature of the variable costing method and its potential uses before concluding the topic with a discussion of standard costing and cost control.

Fundamental Management Accounting Concepts

Management accounting is the branch of accounting designed to meet the needs of internal users. It is concerned with an information process and system that measures and provides financial and non-financial information to assist managerial decision making, motivate behaviour and create a culture which will achieve the stated objectives of the organisation.

Analysis and Interpretation of Financial Statements

The income statement, the balance sheet, changes in equity and the cash flow statement provide explicit 'bottom line' indicators, however is of little significance unless provided additional context. These contexts are measured by financial ratios. Interpretation of such ratios must follow calculation.

Financial analysis techniques can be used to show:

  • areas of operation where performance is deteriorating
  • areas of operation where performance is below that of companies operating in the same area of business activity

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