ACCT 463 Lecture Notes - Lecture 7: Capital Budgeting, Strategic Planning, Reduced Cost
31 Mar 2018
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Document Summary
Chapter 8: planning and decision making: planning and budgeting: helps clarify where the organization wants to go (objectives), how it intends to get there (strategies), and what results should be expected (performance targets) Planning: decision-making in advance (encourage long-term thinking: a form of action control makes control systems proactive: e. g. predict future problems and solve them now, 2. Coordination: encourages bottom-up and top-down communication; lateral communication: 3. Top management oversight: pre-action reviews: where plans are discussed and examined at multiple levels in the firm before action is taken a type of action control, performance standards: use the plan for goal-setting result control, 4. Motivation: financial performance targets (e. g. linked to bonuses/organizational rewards) can motivate employees. Accounting communicates strategy through: monetary units: financial budgets; discounted cash flows (investment decisions); financial income sensitivity models, non-monetary units, non-financial measures (market share, etc. , subjective measures (customer satisfaction, employee talent etc. )
