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					 Cost Management and
Strategic Decision Making


         Chapter 1
      The Role of Management
            Accounting

Provide management with information to
 evaluate the impact of current or proposed
 strategic and operational activities
  Create more value at less cost

Minor role – measure and report costs that
 have already occurred
   Functions of the Management
            Accountant

Strategy and information support
Provide information and guidance
Evaluate alternatives
Cost management vs. cost cutting
Value inventory
Characteristics of the Management
           Accountant
Team player
Visionary
  Long-term focus
  Understands quantitative and qualitative
   aspects
Self-guided
Understands causality of costs
Ethical
 IMA Standards of Ethical Conduct
Competence
  Continues education, follows laws, rules and
   standards, provides clear, complete information,
   recognizes and communicates own professional
   limitations

Confidentiality
  Maintains and enforces confidentiality of
   information, refrains from using confidential
   information for unethical advantage
  IMA Standards of Ethical Conduct
Integrity
  Avoids conflicts of interest, outside influence,
   unethical conduct, subversion of organization
   objectives, activities that would discredit the
   profession
Credibility
  Communicate information fairly and objectively,
   disclose all relevant information, disclose delays
   or deficiencies in information, timeliness,
   processing or internal controls
Identifying Competitive Advantages

SWOT analysis
  Internal
    Strengths
    Weaknesses

  External
    Opportunities
    Threats
Identifying Competitive Advantages
Value chain analysis
  Focus on improving customer’s perceived
   value
  Should not just look inward
    The way we do things is only a part of the chain
  How do we make money
    Cost vs. profit strategic business units (SBUs)
       Do we outsource?
Fostering a Culture of Improvement
Identify a need or opportunity for change
Get help
Create a vision and strategy to achieve it
Communicate in both directions
Highlight achievements
Learn from mistakes
  Do not fear or penalize failures

				
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posted:10/4/2012
language:English
pages:9