A 14907 - Strategic Management Accoun6ng (2018-2019) Session 7 - PowerPoint PPT Presentation

A 14907 - Strategic Management Accoun6ng (2018-2019) Session 7 Strategic Management Accoun6ng Paul G. Smith B.A., F.C.A

Course Objec6ves Students will learn to use a range of tools for cos2ng, decision making, planning and controlling and consider their applicability within the context of Strategic Management. They will also be able to read and understand a financial statement prepared according to Interna2onal accoun2ng Standards A 14907 Strategic Management Accoun6ng 3

Course Overview 1. Financial Vs Management Accoun4ng 10. Investment Decisions 2. Accoun4ng Principles and Valua4on Criteria – 11. Opera4onal Decisions PGS Current and Fixed Assets 3. Accoun4ng Principles and Valua4on Criteria – 12. Exam Current and Fixed Assets ..Cont’d PT 4. Financial Statement Analysis 13. Target Cos4ng and Life Cycle Cos4ng 5. Performance Measurement and Cost 14. Servi4za4on and Cost Management Accoun4ng 6. Exam 15. Performance Measurement, Sustainability and CSR LS 7. Strategic Management Accoun4ng 16. Voluntary Disclosure and Balanced Scorecard – Case Study 8. Budgets and Performance Management 17. Presenta4on and Discussion of Case Study PGS 9. Pricing Decisions 18. Exam A 14907 Strategic Management Accoun6ng 4

Teaching methods • Pre-reading Ground Rules • Research 1. Be on 6me and don’t leave early • Lecture 2. Mobiles and laptops off • Discussion 3. Don’t come and go 4. Hand in assignments on 6me • Exercises • Assignments • Q&A Memo - Rules • Final test Please text or e-mail for an • Office hour each week appointment beforehand A 14907 Strategic Management Accoun6ng 5

Reference material Special price for LIUC students: Get 30% off this course textbook - save up to £10.00 1. Go to www.koganpage.com 2. Choose the format you’d like: a. Paperback £34.99 b. Ebook £29.16 c. Print + ebook bundle – the best of both worlds for only a few pounds more £43.8 3. Enter discount code UDTSLIUC30 at the checkout A 14907 Strategic Management Accoun6ng 6

INTRODUCTIONS A 14907 Strategic Management Accoun6ng 7

Introduc6ons • Briefly introduce yourself (Max 2 minutes) – Name – Where you are from – First degree – Experiences of business, management, accoun6ng – What you want to do ager LIUC – What you hope to get out of this course A 14907 Strategic Management Accoun6ng 8

SESSION 1 OBJECTIVES A 14907 Strategic Management Accoun6ng 9

Objec6ves of Session 1 At the end of this session students will understand the difference s between: • Strategic Planning, • Business Planning and; • Budge2ng And the areas in which Management Accoun1ng can provide support for each of these and in par2cular the role of budgets in the Business Planning Process and the different approach to budge2ng A 14907 Strategic Management Accoun6ng 10

Session Overview Topic Brief Outline Time (mins) What is Strategic Corporate strategy, Long-range Planning, Strategic Planning? Planning. Purpose, vision, mission, goals, objec6ves, ac6on plans What is Business Business Planning. What is a Business Plan and why write Planning? one? What is Budge6ng? The Annual Budget: The func6ons and uses of budgets; the budget sejng process-different approaches; prac6cal budget sejng; flexible budge6ng; zero-based budge6ng; ac6vity based budge6ng The Role of Strategic Choices/Decisions : Pricing, Business Management Development, new product development, mergers and Accoun6ng in acquisi6ons, investment appraisal suppor6ng these Monitoring and repor4ng : variance analysis, excep6on repor6ng, margin analysis, customer profitability A 14907 Strategic Management Accoun6ng 11

WHAT IS STRATEGIC PLANNING? A 14907 Strategic Management Accoun6ng 12

Strategic Planning & Management “Would you tell me, please, which way ought I to go from here?” “That depends a good deal on where you want to get to,” said the Cat. I don’t much care where-” said Alice. “Then it doesn’t maNer which way you go,” said the Cat. “-so long as I get somewhere,” Alice added as an explana2on. “Oh, you’re sure to do that,” said the Cat, “if only you walk long enough.” A 14907 Strategic Management Accoun6ng 13

What is Strategey? … the long-term direc6on of the organiza6on (Johnson, Whijngton and Scholes 2012) … the determina6on of long-run goals and objec6ves of an enterprise and the adop6on of courses of ac6on and the alloca6on of resources necessary for carrying out these goals (Chandler 1962) … the con6nuous process of making entrepreneurial ( risk taking ) decisions systema6cally and with the greatest knowledge of their futurity; organizing systema6cally the efforts needed to carry out these decisions; and measuring the results of these decisions against the expecta6ons through organized systema6c feedback ( Drucker 1973) A 14907 Strategic Management Accoun6ng 14

Why Plan? Slow Crisis Management Reac4on to Change Reac4ve An4cipatory Fast Low High Pain A 14907 Strategic Management Accoun6ng 15

Plans 1 Year and 5 – 10 Years 3 – 5 Years 1 Year 1 Year 3 – 5 Year Opera1ng Strategic Business Employee Management Plans/ Plan Plans Objec1ves Objec1ves Budget Opera6ng Management Employee Plan/Budget Objec6ves Objec6ves Business A Business A Business A Business A Company/ Group Management Opera6ng Employee Business B Objec6ves Plan/Budget Objec6ves Business B Business B Business A Investments/Dividends Profits Rewards A 14907 Strategic Management Accoun6ng 16

Purpose/Vision/Mission • Guiding Philosophy • Tangible Image – Core beliefs and values – Mission • Business • What it wishes to accomplish • Life/society • Achievable but stretch • Have not should have • Measurable • Should not be violated – Vivid descrip6on – Purpose • Picture of what it will look • Reason for existence like when accomplished • Reason for being • Made alive • Never achieved – should • Made engaging last 100 years Should arract or repel Should have a finish line A 14907 Strategic Management Accoun6ng 17

Mission “….achieving the goal, before this decade is out, landing a man on the moon and returning him safely to earth” President J.F. Kennedy 1961 What comes July 20,1969 next though ? A 14907 Strategic Management Accoun6ng 18

Purpose - Shell Shell’s purpose is to power progress together with more and cleaner energy solu2ons. Our strategy is to strengthen our posi2on as a leading energy company by providing oil and gas and low-carbon energy as the world’s energy system changes. Safety and social responsibility are fundamental to our business approach. Shell will only succeed by working with customers, governments, business partners, investors and other stakeholders. Source: Annual Report 2017 A 14907 Strategic Management Accoun6ng 19

Purpose - BASF Purpose Principles Values We create chemistry for a As strategic basis for our as guidelines for our sustainable future success in the market conduct and ac6ons We live our corporate purpose • We add value as one • Crea6ve by: company • Open • Sourcing and producing • We innovate to make our • Responsible responsibly customers more successful • Entrepreneurial • Ac6ng as a fair and reliable • We drive sustainable partner solu6ons • Connec6ng crea6ve minds • We form the best team to find the best solu6ons for market need Source: BASF Report 2015 A 14907 Strategic Management Accoun6ng 20

Mission - Google Google’s mission is to organize the world’s informa2on and make it universally accessible and useful. Source: Google Corporate Website A 14907 Strategic Management Accoun6ng 21

Mission - Facebook Founded in 2004, Facebook’s mission is to give people the power to share and make the world more open and connected. People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what maNers to them. Source: Facebook Corporate Website A 14907 Strategic Management Accoun6ng 22

The Wheel of Compe66ve Strategy Source: Michael Porter Compe66ve Strategy A 14907 Strategic Management Accoun6ng 23

Compe66ve Strategy - Context SWOT Analysis Strengths Opportuni6es Weaknesses Threats Rela6ve Compe66ve Advantages/ Disadvantages Source: Michael E. Porter Compe66ve Strategy A 14907 Strategic Management Accoun6ng 24

Compe66ve Strategy Source: Michael E. Porter Compe66ve Strategy A 14907 Strategic Management Accoun6ng 25

Compe66ve Strategy Design Brand Technology Differen6a6on Cost Leadership Customer service Dealer network e.g. Ferrari, Aston Mar6n e.g. FIAT, GM, Toyota Profitability/ Return on Investment Don’t Get Stuck in the Middle e.g. Bri6sh Leyland Market share Source: Michael E. Porter Compe66ve Strategy A 14907 Strategic Management Accoun6ng 26 (Adapted from)

Tradi6onal Product Life Cycle (Parern however, does not always hold) Introduc6on Growth Maturity Decline Industry sales Time A 14907 Strategic Management Accoun6ng 27

Corporate Strategy Matrix Exis4ng products New Products Exis6ng markets Product penetra6on Product development strategy strategy New markets Market development Diversifica6on strategy strategy Source: Igor Ansoff 1968 A 14907 Strategic Management Accoun6ng 28