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MA Lecture 6
MA Lecture 6
MALAYSIA
School of Management
ACW 472 – MANAGEMENT ACCOUNTING AND CONTROL
– Week 5 & 6 lectures
By : Amirul Shah Md Shahbudin, PhD
2 The Development of
Management Control Revisited
Robert Anthony’s definition and
distinction of the term management
control against strategic planning and
operational control (1965)
Historical Prospective
Single entity Relative
Single period Multiple
Single decision Sequences, patterns
Introspective Outward-looking
Manufacturing focus Competitive focus
Existing activities Possibilities
Reactive Proactive
Programmed Non-programmed
Overlooks linkages Embrace linkages
Data orientation Information orientation
Based on existing systems Unconstrained by existing systems
Built on conventions
Ignores conventions
Analyse Analyse
Customer Requirements Precision by Competitors
Market &
Competitor
Analysis
Identify Desired Identify Desired
Product / Service Attributtes Company Attributes
YES
Can We Deliver All Required Attributes at
INVEST
Desired Probe Level
Cost & Attribute
NO
Driver Analysis
Cost Reduction - Attribute Improvement
( Waste Removal, COQ, TQM, etc )
Increase profits
Improve competitive position by:
Controlling costs
Improving delivery performance
Improving quality
JIT response
Total preventive maintenance
Total quality control (TQC)
Using the Kanban system
1. Identify constraints
5. Repeat process
(Porter, 1980)
Amirul Shah Md Shahbudin, PhD
18 Porter’s Value Chain Analysis
Definition of MCS:
The formal, information based routines and procedures
managers use to maintain or alter patterns in
organisational activities
Based on Miles and Snow (1978) strategic typologies:
Prospector
Defender
Analyser
Reactor
(Simons, 1990)
Belief Boundary
System System
Core Risks to
Values Be Avoided
Business
Strategy
Critical
Strategic
Performance
Uncertainties
Variable
Interactive Diagnostics
Control Control
System System
Figure 1.2 Controlling Business Strategy : Key Variables
to Be Analyzed
Amirul Shah Md Shahbudin, PhD
22 Levers of Control
SCM’s definition:
Formulating strategies
Communicating those strategies
throughout the organisation
Developing and carrying out tactics to
implement the strategies
Developing and implementing controls
to monitor the success of the
implementation steps and hence the
success in meeting the strategic
objectives
Amirul Shah Md Shahbudin, PhD
26 SCM’s Model
Silvaculture and
timber farming
A
Logging and
chipping
B
C
Pulp
Manufacturing
Paper
D Manufacturing
Converting
operations
G
Distribution F
End-use customer
2000
1996
GOALS MEASURES
GOALS MEASURES
Pareto Diagram
THE END