Business Synoptic 1 Essay Example | Topics and Well Written Essays - 4750 words

Business Synoptic 1 - Essay Example This has been described in detail in the diagram elucidating a close linkage between the concepts. The diagram below helps to understand the linkage between the strategic management and the management accounting. Evidence Link between Strategic management and Management Accounting Accounting plays a vital role in the calculation of the product and to measure the profitability of the customers. In the figure above, it can be seen that the supply chain management of the company which is a strategic management concept can be linked to the customer focused accounting which on the other hand is a management accounting concept. The link between the two concepts is evident in the form of increased sales, profitability and productivity. The strategic decision making process incorporates a customer focus in order to guide value creation and delivery decisions. It is useless to supply the goods and services if the organisation is not able to create value in the minds of the customers. The mana gement accounting techniques involve efficiency measures and control which help the organisation to analyse the performance of the suppliers and the abilities of the company. It is worth noticing that the supply chain management consists of each of the link in the whole supply chain, starting from the producer to the consumers. In case of horizontal organisation, the use of various management accounting techniques such as target costing, life cycle costing, consumer focused accounting, theory of constraints, balance scorecard and activity based cost management techniques are evident. The overall activity of the supply chain can be aligned with the wants and needs of the customers in order to satisfy both the organisations as well as the customers. If the company’s supply chain is customer focused then the company as a whole will be benefited. Based upon Nestle’s case study, a connection can be formed between the strategic management and the management accounting that e lucidates the firm’s approach in its highly successful growth strategy. It has been argued by the researcher that the organisation that implements the strategic management approaches tend to be at a successful and profitable state. The business that uses the strategic management approaches shows progress in sales, profitability as well as productivity in comparison to the firms which lacked systematic planning activities (Virtual University of Pakistan, n.d.) There are various elements that are involved in Nestle’s competitive strategic management approach. They are ‘situation analysis, the strategy formulation, implementation and evaluation’. The competitive strategy of Nestle is associated with foreign direct investment in both the businesses namely the dairy and food businesses. It has been believed by the company that strengthening their leadership in this market is the most important element of their corporate strategy (Castelarhost,