Strategic Management Accounting Cost Advantage And...

Add to the previous text with regard to Porter – (cost advantage and differentiation advantage) Traditional management accounting is cost driven with short-term pricing and profit motive. It is fragmented and has internal and financial focus. Strategic management accounting is market driven with long-term pricing and profit motive. It is integrated and has value and external focus. Strategic management accounting raises the issues and addresses the weaknesses of traditional management accounting in the modern market place. Strategic management accounting requires the application of strategic management accounting tools to management accounting information and decision-making. Tools of strategic management accounting include activity-based management, attribute costing, competitor analysis, brand valuation, target costing and strategic costing. Shank (1989) shows the impact of Porter’s strategic positioning and competitive advantage on management accounting. In strategic management accounting, organisations do not only develop their own strategy but also understand the strategy of their opponent Incorporating strategic ideas into management accounting, aligning management accounting with marketing management for strategic positioning and applying strategic management accounting techniques with external and market orientation (Roslender Hart 2010). The two elements of strategic management accounting are the adoption of strategic management accounting techniques andShow MoreRelatedManagement Accounting : The Process Of Producing Management1667 Words   |  7 PagesManagement accounting is the process of producing management reports and accounts which provide accurate and timely information for the use of internal parties within an organisation, such as departmental managers or chief executive officers. The information collected and produced include financial aspects such as amount of cash in hand, capital, liabilities, recent sales revenues, cost of production and also non-financial aspects such as employee’s performances or efficiency of production. In thisRead MoreCompetitive Advantage983 Words   |  4 PagesCompetitive Advantage MGT/498 September 13, 2012 Competitive Advantage Riordan Manufacturing is a leader in the industry of plastic injection molding. Business strategies require assurance that the organization can anticipate business conditions for the future that will improve performance and profitability. Organizations should create a strategic framework for a noteworthy achievement. The framework entails formulating a mission that defines the business product of the organization.Read MoreExplain the Role of Strategic Management Accounting in a Changing Business Environment. 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