Strategic Management Accounting: Dimensions and Strategic Tools

Strategic Management Accounting: Dimensions and Strategic Tools

Sorinel Căpușneanu (Titu Maiorescu University, Romania), Dan Ioan Topor (1 Decembrie 1918 University, Romania), Dana Maria (Oprea) Constantin (University of Bucharest, Romania), Cristian Marian Barbu (Artifex University, Romania) and Mihaela Stefan Hint (1 Decembrie 1918 University, Romania)
DOI: 10.4018/978-1-7998-4637-6.ch001
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Abstract

This chapter deals with some dimensions of strategic management accounting, including the instruments with which they operate and interconnect in order to make managerial decisions. The main objectives of this chapter are to present the general approaches of the concept of strategic management accounting, the dimensions of the application of strategic management accounting, and the strategic tools used by companies in establishing strategies and making decisions. Based on the specialized literature, the authors present the most significant theoretical-methodological approaches to strategic management accounting, the participation of management accountants in the decision-making process, the tools used by strategic management accounting. All aspects presented by the authors are based on existing literature, university studies, and specialized literature from around the world. The chapter concludes with the conclusions of the authors regarding the dimensions and implications of using the specific tools of strategic management accounting for decision making at managerial level.
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Introduction

The computerization of the strategic management in the decision-making process is the main key in vitalizing the strategies and achieving the objectives proposed by an organization. An integrated strategic management system is based on management accounting, which is the creator and manager of these information flows needed especially for internal users to achieve the objectives pursued. Exceeding the internal information limits and the orientation towards the external environment is justified by determining the relationship between the strategy pursued and the information formation mode. By improving the methodology and strategic management needs, the efficiency of strategic management accounting is demonstrated. Thus, the entire information cycle of management accounting is oriented according to the strategic positioning of an organization. An organization is particularly interested in managing its cost structure, which is the subject of strategic management, but also the creation of the information flow necessary to optimize strategic decisions of senior management. The implementation of these problems determined the purpose of our study by clarifying some aspects related to the concept of strategic management accounting and its dimensions, but also to the strategic tools used in cost management and obtaining performance by an economic entity. The main objectives of this chapter consist in: (1) presentation of the conceptual approaches of strategic management accounting; (2) presentation and explanation of the dimensions of strategic management accounting and of the competitive advantage; (3) the integrated application of ABC and BSC methods in an economic entity in the winemaking industry.

Key Terms in this Chapter

Strategic Management Accounting (SMA): Part of the management accounting dedicated to developing and monitoring the business strategy by providing analysis documents based on the internal and external information of the other competitors of the company.

Activity-Based Costing (ABC): An accounting method that identifies the costs of (indirect) activities and then allocates these costs to the products. The allocation of the costs of the activities on the products is realized through the cost drivers.

Balanced Scorecard (BSC): Tool for measuring the performance of strategic management used to provide a feedback on identifying and improving internal business functions and external results.

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