Strategic Management Accounting

Questions: 1.Without modern information systems, strategic management accounting would not be possible. Discuss.2.What is your opinion on Balanced Scorecards? Can you think of any other organization (except Toyota) that applies Balanced Scorecards? Answers: 1. Information systems are the software and hardware systems that organizations use to collect, analyze and dispatch data from one place to another (Grant, Hackney Edgar, 2009). Flow of information in an organization is an important aspect because everything else, may it be allocation of tasks, giving feedback, reviewing performance, presenting complaints and decision making is dependent on available data and information. Information systems are used in accounting to collect, store and process financial data. Since the role of accounting is providing financial information to be used by shareholders to make better business decisions, its role in strategic management is quite significant (Oz, 2009). Decision Making Making correct decisions regarding finances of an organization is quite important .Any wrong Decision made can cost an organization heavily. Information systems ensure that any decision made in an organization is dependent on the available data. This prevents making of wrong decisions (Rainer, 2008). Trend Analysis For an organization to carry out trend analysis on its expected business results, it has to be equipped with sufficient information. Information systems have inbuilt trend analysis tools that can generate the information that is needed to carry out trend analysis (Grant, Hackney Edgar, 2009). Competitive Advantage The desire of every organization is to compete favorably market and stay ahead of competitors. With strategic information systems a company can be able to acquire and sustain a competitive advantage in the market (Rainer, 2008). Implementation of Strategies While it is necessary to implement strategies that can improve business processes, checking them against results can be used to check if they have had positive or negative impact. Information systems provide financial data that is used in determining whether the whether the desired outcome has been achieved or if there is need for a corrective action to achieve targets (Oz, 2009). 2. Balanced score cards are strategic management and planning systems used in identification and management of businesses in-house functions as well as their consequential external outcomes. Balanced score card is concerned with projecting a companys future performance by focusing on its corporate governance, satisfaction of customers and companys business process (Niven,2008). Based on the above explanation, it can be said that balanced score cards plays a significant role in aligning businesses activities towards achievement of identified goals. This can be an effective tool for achieving corporate success, My take on this is that by correctly using scorecards business can record better performance. This is possible because, the system can enable an organization to identify its weak points and direct the necessary resources both human and capital, towards the identified weak points in order to improve its performance (Makhijani Creelman, 2011). Balanced scorecard can also be used by organizations to link their short term and long term goals to enable achieve long-term success .Each organization usually has its long term vision and strategy but unless this is translated into operational steps it might end up remaining a mere vision. Balanced score card can help an organization can help organizations to achieve long term goals by enabling translations of their visions into action plans into actions and helping them to plan appropriately (Kammerer,2013). Apart from Toyota, Wellsfargo also uses balanced scorecards in its operations. References: Grant, K., Hackney, R., Edgar, D. (2009). Strategic information systems management. Andover: Cengage Learning. Kammerer, M. (2013). Balanced scorecard - advantages and disadvantages. Place of publication not identified: Grin Verlag Ohg. Makhijani, N., Creelman, J. (2011). Creating a balanced scorecard for a financial services organization. Singapore: Wiley. Niven, P. R. (2008). Balanced scorecard step-by-step for government and nonprofit agencies. Hoboken, N.J: J. Wiley Sons. Oz, E. (2009). Management information systems. Boston, Mass: Thomson/Course Technology. Rainer, R. K. (2008). Introduction to information systems: Supporting and transforming business. Hoboken, N.J: Wiley.