STRATEGIC MANAGEMENT ACCOUNTING
Individual Real-Life Blog Posts (15%) When: Submit a real-life blog post before your assigned seminar in Weeks 4, 5, 7 and 8. Aim: To help you identify and analyse real-world applications of strategic management accounting (SMA) Required: Every student is required to submit a real-life blog post that applies the content for the assigned topic (Topics 4, 5, 7 and 8 only) to real-world events. Specifically, you should discuss a real-world event (from 2016 to present) that directly relates to at least one concept of your choice from the assigned topic that week. The source document/s relating to your real-world event are required to be cited as reference/s (not included in the word count) – and these should be drawn from newspapers, business press, credible websites. Your real-life blog post must address the following two (2) criteria:
1. Describe a real-world event or business issue to which a SMA concept from this topic applies 2. Apply the SMA concept to this real-world event and discuss the specific insights it provides
The following table provides indicators of good vs. poor real-life blog posts to help you consider what should be included in your own real-life blog posts, with respect to criteria 1 and 2:
Criteria GOOD real-life blog post POOR real-life blog post
1. Describe a real- world event or issue to which a SMA concept from this topic applies
• Describes key features of real- world event (with supporting evidence provided).
• Clearly indicates the SMA concept which applies to the real- world event/issue.
• Describes some aspects of the real-world event.
• Provides little or no supporting evidence.
• Offers limited connection between the SMA concept and real-world event/issue.
2. Apply the SMA concept to the real- world event and discuss the insights this provides
• Insightfully applies the SMA concept, to demonstrate understanding of the concept and meaningful application of this to the real-world context.
• Clearly identifies insights provided by this application.
• Makes some relevant points in applying the concept, but demonstrates limited conceptual understanding or incomplete application of the SMA concept.
• Offers limited insights from application (e.g., too general, poorly argued points).
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Each of the four (4) real-life blog posts will be graded out of 5; all four blog real-life blog posts (total grade out of 20) will then be adjusted to a grade out of 15%.There is no special consideration for the real-life blog post assessment. Required:
• Your real-life blog post should be submitted as a Word document via Turnitin on the ACCT5931 Moodle site, before your assigned seminar in Weeks 4, 5, 7 and 8.
• Your blog post should be 150-200 words (excluding references).
Topic 5: Developing and using a Balanced Scorecard
ACCT5931 Strategic Management Accounting
Introduction to Strategic Management Accounting
Analysing the Internal Environment
Conclusion to Strategic Management Accounting
Analysing the External Environment
Measuring Performance and Organisational & Project Value
Performance Measurement & Management
Being a Responsible Corporate Citizen and
Managing Strategic Risks
Topic 9 Managing Sustainably
and Creating Shared Value
Topic 8Stakeholder & Resource Management
Strategy Analysis & Formulation
Managing Customer and Supplier Value
Developing and Using a Balanced Scorecard
Introduction to ACCT5931: Course content overview
n Required readings: – Reading 5.1 – Eldenburg, L.G., Brooks, A., Oliver, J., Vesty, G., and Wolcott, S.
2010. Management Accounting 2e, Wiley, pp. 694-720 [Course Readings Kit] – Reading 5.2 – Langfield-Smith, K., Thorne, H., and Hilton, R. 2015. Management
Accounting 7e: Information for Creating and Managing Value, McGraw-Hill, pp. 621- 626, 629-630 [Course Readings Kit].
– Reading 5.3 – Kaplan, R.S., Matsumura, E. M., Young, S.M., and Atkinson, A. 2011. Management Accounting 6e: Information for Decision-Making and Strategy Execution, Pearson Education, pp. 19-36 [Course Readings Kit].
– Reading 5.4: Grant, R., Butler, B., Orr, S., and Murray, P.A. 2014. Contemporary Strategic Management: An Australasian Perspective (2nd Edition), Milton, QLD: John Wiley & Sons, Chapter 12: Strategy Evaluation, pp. 409-410. [Course textbook]
Topic 5: Required readings and case study
Topic 5: Desired learning outcomes
n In Topic 5 we aim to be able to: – Appreciate the role of the balanced scorecard (BSC)
framework and four questions underlying its design – Explain and develop a strategy map – Explain and develop a balanced scorecard (BSC) – Understand the limitations of the BSC framework
Topic 5: The balanced scorecard (BSC) framework
n The balanced scorecard (BSC) framework: – is the most widely used strategic performance
measurement system globally, with approx. 38% of organisations worldwide using a BSC and more planning to do so (Rigby & Bilodeau 2013);
– was developed by Robert S. Kaplan (Emeritus Professor, HBS) and David P. Norton (Consulting Partner) in 1992, and has been refined subsequently through five co-authored books and numerous articles;
– translates an organisation’s strategies into performance measures.
Topic 5: Four questions underlying the BSC framework
n The BSC framework is designed to answer four questions: BSC Perspective Example Measure
Financial % improvement in profit
Customer Customer satisfaction index
Internal Business Process
% on-time departures
Learning and Growth
% employees attending customer service training
1. “How do we look to our shareholders?”
2. “How do our customers see us?”
3. “What business processes must we excel at ?”
4. “Can we continue to improve and create value?”
Topic 5: Strategy map
n The BSC framework begins with a strategy map, which: – visually represents the strategic themes and strategic
objectives of organisation, as well as the cause-and- effect relationships linking the strategic objectives from one perspective to the next;
– communicates the strategic objectives of the organisation to its employees; and
– is used to identify performance measures for evaluating the delivery of those strategic objectives.
Clear and simple Links between all strategic objectives
(bottom to top)
Unique to the organisation (passes
‘airline seat’ test)
Topic 5: Example strategy map
Internal Business Process
Learning & Growth
Increase profitGrow revenue Reduce costs
Attract and retain more customers
Improve on- time service
Achieve faster ground
Invest in crew scheduling systems
Increase training for ramp agents
Operate aircraft more
Topic 5: The balanced scorecard (BSC)
n The balanced scorecard (BSC): – translates the strategic objectives developed in the
strategy map into performance measures, targets and initiatives to deliver those strategic objectives.
– has a one-to-one relationship between strategic objective and performance measure…and should contain no more than 16-25 performance measures.
– achieves balance with a combination of: ØLeading and lagging measures (see next slide); ØFinancial and non-financial measures; and ØShort-term and long-term measures.
Topic 5: The relationship between strategic objectives and lag/lead performance measures
Source: Langfield-Smith et al. (2015) 10
Lag measures help managers monitor progress towards strategic objectives
Lead measures focus on factors that drive outcomes and provide actionable information
Topic 5: Example BSC framework (Strategy map + BSC)
STRATEGY MAP BALANCED SCORECARD
Objectives Measure Target Initiative
Financial • Increase profit •Grow revenue •Reduce costs
•% change in profit
•% change in operating cost
•30% p.a. • -5% p.a.
Customer •Attract and retain more customers
• Improve on-time service
•FAA On-Time Arrival Rating
•#1 •Quality management program
Internal Business Process
•Achieve faster ground turnaround
•Operate aircraft more efficiently
•Time On Ground
•Optimise Cycle time
Learning & Growth
• Increase training for ramp agents
• Invest in crew scheduling systems
•Strategic Job Readiness
•Yr 1 – 0% •Yr 3 – 90% •Yr 5 – 100%
•Ground crew training
Attract and retain
Improve on-time service
Invest in crew scheduling
Increase training for
Operate aircraft more
What is missing from this BSC?
Topic 5: Challenges when developing and using a BSC
n Selecting appropriate performance measures to reflect the strategic objectives – For each strategic objective there are multiple potential measures;
but having a large number of measures dilutes the overall impact of the BSC
n Choosing an effective combination of leading and lagging performance measures – Requires a highly developed information system, and significant
employee time/effort to design and implement
n Evaluating the linkages between strategic objectives – There may be delays between measures in the lower BSC
perspectives delivering improvements in measures in the upper BSC perspectives….or the linkage may be incorrect
Topic 5: Seminar exercises 1 & 2
Developing and using a BSC…. (provided in class)
Topic 5: Team Case Project and Wrap-up
Team Case Project: After today’s topic, your team is ready to complete
Question 6. Please use this time to plan your team’s response to this question.