E-Book Overview
Management accountancy has a dynamic role to play in the competitive strategy of modern global businesses. This book sets out key strategic principles and then assesses how management accountancy can affect and direct these strategies. Engaging case studies reveal how theories and concepts translate into real business practice. Throughout, the book emphasizes: - how accounting initiatives can trigger assessment and improvement of performance management - the importance of managerial decision making to good business practice - how today's management accountancy measures against current research Written for advanced undergraduate, postgraduate and MBA students taking courses on management accounting and performance measurement and management, the book will be also of interest to management and business consultants, professional accountants and accounting academics.
E-Book Content
M A LC OLM SMITH
PERFORMANCE MEASUREMENT & MANAGEMENT A STRATEG I C A P P ROAC H TO
MANAGEME N T AC C O U N T I N G
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PERFORMANCE MEASUREMENT & MANAGEMENT
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PERFORMANCE MEASUREMENT & MANAGEMENT A STRATEGIC APPROACH TO MANAGEMENT ACCOUNTING
Malcolm Smith
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© Malcolm Smith, 2005 First published 2005 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act, 1988, this publication may be reproduced, stored or transmitted in any form, or by any means, only with the prior permission in writing of the publishers, or in the case of reprographic reproduction, in accordance with the terms of licences issued by the Copyright Licensing Agency. Enquiries concerning reproduction outside those terms should be sent to the publishers. SAGE Publications Ltd 1 Oliver’s Yard 55 City Road London EC1Y 1SP SAGE Publications Inc. 2455 Teller Road Thousand Oaks, California 91320 SAGE Publications India Pvt Ltd B-42, Panchsheel Enclave Post Box 4109 New Delhi 110 017 British Library Cataloguing in Publication data A catalogue record for this book is available from the British Library ISBN 1-4129-0763-2 ISBN 1-4129-0764-0 (pbk) Library of Congress Control Number: 2004116097
Typeset by Selective Minds Infotech Pvt Ltd, Mohali, India Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall
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Contents
Preface
vii
Acknowledgements
ix
1
Introduction
1
2
Emerging Issues
7
Historical development
7
Management accounting research
9
3
4
5
6
Performance Measurement and Analysis
14
Strategic management accounting
15
Objectives
19
Situation audit (SWOT analysis)
20
Benchmarking
53
Resource-based view of the firm
57
Performance measurement alternatives
60
Strategy Alternatives
64
Creative thinking
65
Developing an innovation culture
68
Evaluation
75
Product and Customer Profitability
86
Accounting system implications
86
Product profitability
87
Customer profitability
89
Customer relationship management
103
Know Your Processes
108
Cost behaviour: random vari