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The objective of the subject is to help students understand and analyse the systems used by organisations to measure and manage their performance and to implement their strategies in a changing environment. Traditionally accounting performance measurement and budgetary control systems served this function. The relevance of these systems has been seriously questioned during the last decade and there has been extensive development of new techniques and systems designed to support strategic decision making. These include target costing, activity-based management, the balanced scorecard and economic value added measures, which, coupled with incentive compensation systems, have been developed to reflect the strategic requirements of management. This subject is designed to not only develop the student's ability to design and implement these 'value adding' systems of performance measurement and management, but also to expose students to the current literature that assesses and challenges the efficacy of these systems.
Intended learning outcomes
On successful completion of this subject, students should be able to:
- Analyse the impact of activity based cost systems on strategic resource management;
- Evaluate alternative cost management systems;
- Explain the impact of capacity constraints on the management of resources;
- Evaluate the effectiveness of budgeting practices in organisations;
- Describe and evaluate common performance measures;
- Construct a strategy map and a balanced scorecard and evaluate their use in strategy implementation;
- Explain the role of EVA in value based management;
- Discuss the tension between short-term and long-term cost reduction and evaluate the effectiveness of common cost reduction techniques such as downsizing; and
- Adapt strategic management accounting tools for different decision-making environments.
On successful completion of this subject, students should have improved the following generic skills:
- Critical thinking, particularly in relation to current issues in strategic management accounting;
- Listening to others, evaluation of arguments and presentation of a position;
- Oral communication, which should be developed through discussion and the presentation of work to the class;
- Written communication;
- Analysis and critique of literature and case studies;
- Application of theory to practice, primarily through case analysis;
- Synthesis and evaluation of data and other information.
Last updated: 16 March 2020