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By Insert Your Name Presented to Course Institution Name, Location Date Due 1: Define strategic management accounting Strategic management accounting is a kind of management accounting where focus and emphasis is put on both internal and external factors of a firm…
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Download file to see previous pages The accounting information that is mainly used includes trends of prices, cash flow, market share and firms available resources. 2 (A) Define Sense-making This refers to the process whereby individuals provide a meaning to a particular event or experience. This process is attributed to the existence of cognitive gap where individuals encounter out of making sense from any observed data or information. According to Kauer (2008) in his investigation underlying individual sense-making provides that sense-making is basically an approach of thinking involving assumptions, conceptual frameworks, methodologies and substantive propositions (Kauer, 2008). This process in real life is considered a capability in the corporate world because of its importance in the leadership of dynamic and complex situations. The general activities underlying sense-making include collection of relevant, valid and reliable data, conversations and actions recommended. 2 (B) Describe the context of sense-making in strategic management accounting It is notable that there are theories which have provided evidence that strategic management accounting is vital in developing sense-making process. ...
Among the core management accounting roles is to control and manage the organization budget. This involves sense-making processes activities such as knowing the budget, project funding and the current costing of the project. The sense-making activities ensure that there is accuracy in the analysis as well as the collection of organization values and operating costs. Strategic management accounting involves assigning of costs outside the budget. In regard to this aspect of strategic management accounting sense-making process is incorporated in bringing the whole picture where all the expenses and cost are pre-determined by the underlying managers. The sense-making activities under this include market analysis follow up, customer service costs and expenses. Strategic management accounting has notably adopted sense-making process in conducting competitor’s analysis and comparison (Hoque, 2006). Sense-making process integrated in the management accounting process offers an avenue where other businesses costs, revenues and profitability are examined within the same industry. According to Tor Hernes, (2012) this is attributed to organization products and services costs constantly changing because of the dynamism, market forces and other organizational factors (Tor Hernes, 2012). Sense-making activities among the strategic management manager will ensure that measures are put in place for the company to enhance its cost management in comparison with their competitors. This can also be linked with the company enhancing profitability and consolidating its market share. Finally sense-making activities in the context of strategic management accounting regard organization ...Download file to see next pagesRead More
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