LEARNING OBJECTIVE 1:

Complete Summary Enterprise Performance Management Year 1 University of Melbourne

2024/2025

Complete with visuals

Literature: Enterprise Performance Management A Complete Guide

Gerardus Blokdyk

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LEARNING OBJECTIVE 1:

Explain the concepts of management accounting and control Virgin Airlines’ management accounting case questions

• What factors might force an organisation such as an airline to review its strategic

direction?

• What role might management accounting and control information play in developing

new strategic direction?

• What role might management accounting play in monitoring the success of the new

strategic direction?Traditionally: “Management accounting is the process of gathering, summarising, and reporting financial and non-financial information used internally by managers to make decisions” – Eldenburg et al 2010 More broadly, management control information has evolved to include a broader scope of information than a traditional management accounting definition. This information may include external information relating to processes, predictive information, as well as informal personal and social controls and may serve multiple roles and decision contexts.Essentially, management accounting and control is all about managing the organisation.

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For example, organisations might require management accounting and control information to: Direct resources; consider investment opportunities; manage and improve production and/or service delivery performance; improve quality; meet customer/client expectations; evaluate customers and suppliers, develop suitable incentives.Ultimately, management accounting and control information helps in the management of

organisations through:

• Directing behaviour, e.g. through the use of performance measures, incentives, bonuses and rewards.• Providing a mechanism for information provision and therefore facilitate decision- making (e.g. providing cost information for pricing decisions) and/or influence decision- making (e.g. advising on strategy) • Providing feedback on performance across the organisation, e.g. formally in performance appraisals • Facilitating learning, e.g. getting better at what we do

4 FUNCTIONS OF CONTROL (SEE FLAMHOLTZ ARTICLE FOR A DETAILED

EXPLANATION OF EACH FUNCTION)

• Motivate decisions and actions consistent with organisational objectives and strategies • Integrate the efforts of several different parts of the organisation (Avoid too much “silo-mentality” – one department does not know what the other department is doing) • Provide information about the results of operations and people’s performance • Facilitate the implementation of strategic plans

BROADER ORGANISATIONAL CONTROL SYSTEM

LEARNING OBJECTIVE 2

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