Management Accounting Systems
Name: Nguyen Thai Son
Lecturer: Keshav Dayalani
Table of Contents
I.Cadel Specialty Bicycles’ (CSB)5
B.Mean of competitive advantage6
C.Key Success Factors (KSFs)8
II.Management Accounting System of CSB9
III.Performance measurement & Reward System (PMRS) and its roles11
1.The factors to be measured12
2.A specific performance target12
3.A reward attached to the performance target12
IV.Limitations of current PMRS14
V.Recommendation for new PMRS16
Cadel Specialty Bicycle (CSB) is a successful business of which nature is made-to-order bicycles. In other words, each bicycle of CSB is assembled in accordance with customer’s specification. The business aims to target on the niche market in which almost people are committed cycling enthusiast. Due the success of the first store located in Doncaster, Victoria, Australia, CSB has recently expand its business by opening two new stores located in Geelong & Black Rock and each store has different potential in the track of development . However, CSB has faced problems of personnel & resources management because the business had not applied the suitable strategies within the expansion. Although, the company plans to implement a new management accounting system (MAS) to deal with these problems, there still are weaknesses contained in the new MAS. Hence, the purposes of this report are analyzing the current system and suggesting new suitable MAS for the business. The first demonstration of the report is Background & Current position of CSB, which is used as a foundation for developing suitable MAS. The business mission of CSB, classified as “Question mark”, is building as well as increasing the market share. CSB creates its competitive advantage based on the differentiation of product/service and the niche market. However, CSB has not reached the Cost-cum-Differentiation advantage yet. CSB may focus on the five key success factors (KSFs) including Proper decentralization & measurement of manager’s performance, Good relationship with suppliers, Establishing appropriate costing system & minimizing cost, Maintaining the highest level of customer satisfaction and Product & Service Quality The second part of the report focus on evaluating the role as well as benefits of tools/techniques of current MAS in supporting the business in term of of personnel, scare resources and activities. Next, the role of Performance measurement & Reward system (PMRS) within the business is clearly analyzed in relation to directional & motivational influences on behavior. The report also states the limitations of the current PMRS which potentially leads to dysfunction behaviors. Finally, the report will suggest the suitable PMRS for the business which may effectively & efficiently support CSB in the track of its success.
One of the most essential factors which guide organizations and businesses toward success is management accounting system (MAS). It is always a smart decision for business to apply integrated MAS which provides accurate analysis report by gathering financial data from operations (sales, inventory & cost). As a result of having MAS, business gains sufficient advantages in streamlining operations procedures, reducing costs and building capital for expansion. Refer to the case of Cadel Specialty Bicycle (CSB), the business mainly focus on selling made-to-order bicycles and guaranteeing the product/service quality. After the expansion (two new stores), the business seems to get into trouble with management as well as operation. This report will demonstrate the...