ACCT10001 Chapter Notes - Chapter 9: Human Resource Management, Balanced Scorecard, Strategic Planning
22 May 2018
School
Department
Course
Professor
3
-
5 years
-
Carried out by senior management
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Business takeovers
○
Expansion plans
○
Deletion of business segments
○
Radical product/service development
○
Related to broader issues such as
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Larger entities will use a more formal process; smaller, more creative entities will have a less
formal process
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Outcomes from the process are the strategic plans and guide shorter term planning
-
Strategic planning refers to longer term planning of the entity's activities
1 year
-
Operationalise the strategic plan
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Allow those in operational areas to understand how their work effort contributes to the
entity's strategic objectives
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Used as a control tool to monitor actual results
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Used to investigate differences between actual and budget
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Used to evaluate and reward performance
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Budget cycle = reassess vision and core competencies
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> reconsider long
-
term strategies
-
>
develop operating plans
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> translate strategies and operating plans into master budget
-
>
monitor actual results compared to budget
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> investigate differences between actual
budget
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> evaluate and reward performance
-
Budgeting is a shorter term process that results in the production of budgets that set the financial
framework for that period
Strategic planning and budgeting
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Formal planning process includes short
-
term goals and targets, in financial and non
-
financial terms
Improving customer service
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Corporate governance
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Management techniques
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Human resource management
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Performance management includes setting targets in other than just financial terms
Key innovation in recent years in relation to performance measurement is the balanced scorecard,
which uses a mix of financial and non
-
financial measures
Broader level measures/critical success factors (CSFs)
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More specific operational measures suitable to specific segments or activities of the entity
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Non
-
financial measures may be developed at two levels
Budget = quantitative expression of an entity's plans
Nature of entity will determine type of budget prepared
Putting into operation the longer term plans of entities, such as those relating to strategy
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Assessing the feasibility of strategic plans and create value
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Setting targets for managers
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Identifying resource constraints in the budget period
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Identifying periods of expected cash shortages and excess cash holdings
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Assisting with short
-
term planning decisions, such as capacity utilisation
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Providing profit forecasts and other financial data to the capital markets
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Forecasting data such as sales or fees which commonly set the level of activity for the budget
period
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Helping determine required inventory levels and purchasing requirements for raw materials
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Planning labour and other inputs
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Determining ability of the entity to meet financing commitments
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Budgeting and associated planning can assist in decision
-
making in a variety of ways:
Budgeting process:
Consideration of past performance
1.
Assessment of expected trading and operating conditions
2.
Preparation of initial budget estimates
3.
Adjustment to estimates based on communication with, and feedback from managers
4.
Preparation of budgeted reports and sub
-
budgets
5.
Monitoring of actual performance against budget over the budget period
6.
Making any necessary adjustments to the budget during the budget period
7.
Budgeting process involves a series of steps, including:
Managers may be responsible for a division, a department or a branch
-
Communication with managers is essential
Annual budget process may take up to nine months before budget is finalised
Committee membership will include managing direction, treasurer, chief accountant and
management personnel from each of the major areas of the company
-
Larger entities may have a budget committee to coordinate the preparation of the budget
Interaction of various personnel is crucial
-
Cash, profit and return on investment are interrelated
Budgets
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Document Summary
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