STRATEGIC MANAGEMENT ACCOUNTING IN THE CHANGING BUSINESS ENVIRONMENT

In 1998, an article which appeared in the Management Accounting Journal titled “Strategic management: Which way to competitive advantage?”, Alan Marsden asserts that: “strategic planning of long-term horizons such as five-year plans were relevant in the period of stability and economic growth that characterised the1960s and early 1970s. The changing business environment has brought pressure to bear on many organisations and in the process, upsetting the delicate balance that previously existed in the strategic-making process.
However, globalisation and the turbulent nature of current business environment require the strategic management accountant to be proactive in order to gain competitive advantage.” Michael Porter (1990) suggests that firms must explore and implement different strategies to prevent external influences and stay ahead of competition. You have recently been appointed as a Junior Management Accountant in a blue chip global organization. The Board of Directors and the Chief Executive Officer are planning to hold a meeting with you to discuss the strategies that will help the business to survive the current dynamic business environment. You are to write a report of 2000 words maximum to present at the meeting.

REQUIRED:
(A). In your report, you are required to critically discuss recent trends in the business environment that require the attention of the Board of Directors and the Chief Executive Officer as a management accountant. You should support each trend with particular reference to the existing literature (30 marks).

(B). Using the existing literature, you are required to provide critical discussion and evaluation of the Porters generic strategies with clear demonstration of how the implementation of generic strategies will help your firm to stay ahead of competition in a global environment. You should provide empirical evidence and support your discussion with appropriate references from the literature
(30 Marks).

(C). Suggest and discuss how the Value Chain Analysis and Porter’s Five Forces will be used by your firm to gain competitive advantage in a global environment. You should support your answers with relevant literature and appropriate references (40 Marks).

This individual assignment must show cohesion in analysis and development. It must have supporting evidence from the literature appropriately acknowledged. Also a match between your in text citation and bibliography must be maintained, consistent with Harvard style.

Task A
Student should be able to provide a discussion of the current trends in the changing business environment. The student’s discussion should be supported by the extent literature and appropriately referenced. The current trends should include a discussion on but not limited to the following:
• Increase emphasise on customers
• Deregulation
• Globalisation
• Advancement in technology
• Increase use of ATMs and AMTs
• Short product life cycles
• New strategic management approaches (eg. Target costing, Beyond budgeting techniques)
• Move from protected markets to highly competitive global markets
• Rapid changes in the manufacturing systems.
• Others
Award 5marks per point for good discussion of any five of the above points or students’ own points. (Maximum 30marks)

Task B
Student should be able to discuss and apply Porter’s generic strategies supported by real life examples.
• Overall cost leadership
• Product differentiation
• Focus
Student should be able provide clear demonstration of how the implementation of the above generic strategies will help their chosen firm to stay ahead of competition in a global environment.
Award 10marks per generic strategy which is well discussed and supported by literature, appropriate references as well as demonstrating how firms can use the strategy to beat competition. (Maximum 30marks)

Task C
Student should be able to discuss and apply the Value Chain Analysis and Porter’s Five Forces to indicate how firms can gain competitive advantage through effective use of the value chain analysis and implementation of Porter’s five forces. Student should support their answers with the existing literature, appropriate references and real life examples.
Discussion and evaluation of Value Chain Analysis (20marks)
Discussion and evaluation of Porter’s Five Forces (20marks)
Award a mark-up when students discuss the Onion’s Model in addition to the Porter’s Five Forces.

Sample Solution

ACED ESSAYS