Management Decisions and Control Notes

7 Found helpful • 20 Pages • Complete Study Notes • Year: Pre-2021 • Previously uploaded under: 22421 - Management Decisions and Control

Management Accounting: What is it? Who Cares?  Management accounting: processes and techniques that focus on the effective and efficient use of organisational resources to support managers in their tasks of enhancing both customer value and shareholder value  Management accounting systems (MAS)  Management accounting info  Used by Managers  MAS provide timely and accurate information to facilitate efforts to control costs, to measure and improve productivity, and to divide improved production processes  MAS must be accurate so that decisions can be made with the best possible information  Large decentralized organisation requires systems to motivate and evaluate the performance of their managers  should provide appropriate incentives Why organisations need management accounting 1. Support organisation’s formulation and implementation of strategy 2. Contribute to improving organisation’s competitive advantage 3. Provide info to help manage resources through systems of planning and control 4. Provide estimates of costs of organisation’s outputs Why measure performance?  “what gets measured gets done”  Implement and monitors strategy progress and success  Supports managerial decision making  more info = better decision  Motivates managers and employees (incentives)  Communicate with stakeholders What is ‘performance’ in organisations?  Achievement of organisational objectives  what are we trying to achieve, specific aims? o Profit and returns to shareholder o Reputation and customer satisfaction o Environmental and stakeholder management o Employee safety and satisfaction o Quality of products o Long-term growth How do we achieve objectives? Organisational strategy  Long term direction to achieve an organisation’s mission

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