Ken Simmonds (1981), the pioneer writer on the subject of Strategic Management Accounting, defined it as, "a form of management accounting in which emphasis is placed on information which relates to factors external to the firm, as well as non-financial information and internally generated information." Ward (1992) defines it as, “strategic management is an integrated management approach that draws together all the individual elements involved in planning, implementing and controlling business strategy” For management accounting must help accomplish the three strategic objectives of quality, cost, and time to have strategic significance by providing information that, first, links the strategic objectives of an organization to the daily actions of managers; second, enables managers to in actual fact involve the entire extended endeavour of customers, suppliers, dealers, and recyclers in achieving the strategic objectives; third, look at the long-term view of the organisation. (Ansari, Bell, Klammer, Lawerence, 1997) Thus, serves strategic decision makers by providing information on the financial implications of alternative business strategies. The concept was defined more narrowly by Bromwich (1990) as “the provision and analysis of financial information on the firm’s product markets and competitors’ costs and cost structures and the monitoring of the enterprise’s strategies and those of its competitors in these markets over a number of periods”. However, this definition focuses purely on financial information and ignores the use of non-financial data, for example, occupancy rates, which are crucial focuses of interest in the hotel sector.
Strategic management accounting focuses on a larger picture and a longer term than traditional budgeting. The rapidly changing economic world means that planning horizons have shortened, and even then, projections beyond perhaps twelve months cannot be relied upon very much. Strategy may need to look at a wider series of...
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