Unit 5 and 6 Journal Entry
By the end of this unit you need to reflect on the topics you have studied in the past two weeks and how you will be able to apply it to your personal and/or professional life and answer to the questions from the GoGO Airlines case study.
Write a short Journal Entry to explain:
The key things you learned during the last two weeks
How can they relate to the workplace?
How they can aid your personal and professional development?
Remember to be specific and give examples.
Strategic management accounting is the branch of accountancy which recognises the influence of the external environment on an organisation’s operations. Strategic management accountants consider the impact of external factors, as well as non-financial information on an organisation’s success.
Journal Entry:
For your Unit 5 and 6 Journal Entry briefly, describe how GoGo Air’s management team might use strategic management accounting techniques to make financial decisions about the future of the company.
Unit 5: Qualitative Factors in Decision Making
Although quantitative factors, such as profitability, costs of production and return on capital employed, etc. are important in decision making, managers should not overlook the importance of qualitative factors.
Qualitative factors include factors such as the business reputation, brand strength and employee morale, etc. It is important managers balance qualitative and quantitative factors while making business decisions to avoid any unintended consequences.
This unit will examine the differences between qualitative and quantitative factors and explore the qualitative impact of business decisions.
In this unit we shall:
Examine the difference between qualitative and quantitative factors
Explore the importance of qualitative factors in decision making
On completion of this unit you will be able to:
Evaluate a range of qualitative and quantitative factors in decision making
Appreciate the importance of qualitative factors in decision making
Unit 6: Strategic Management Accounting
In the 1980s, management accounting was criticised for becoming too internally focused on operational issues and providing little help to managers in making strategic decisions. Simmonds introduced the term Strategic Management Accounting (SMA) in 1981. Simmonds defined SMA as “the provision and analysis of management accounting data about a business and its competitors, for use in developing and monitoring business strategy”.
SMA provides managers with a range of business models which can assist them in making decisions. SMA recognises the role of political, economic, socio-cultural and technological factors in determining the success of a business and, therefore, advocates that managers consider these factors before making strategic decisions.
In this unit we shall:
Explore the function of Strategic Management Accounting
Examine how Strategic Management Accounting assists decision making
On completion of this unit you will be able to:
Examine the role played by strategic management accounting as a distinct branch of accountancy
Explain how concepts developed under strategic management accounting assist decision making.
