management accounting education priorities jim reeve, university of tennessee
TRANSCRIPT
Management Accounting Education Priorities
Jim Reeve, University of Tennessee
The Teacher’s Dilemma with “The New Idea”
Practice → Understanding– We don’t know much– However, I know more now than I did 15 years
ago.
So we cope– Teach technologies before they are understood– Suggest taxonomies incorporating organizational,
control, strategy, and decision interactions.
The Teacher’s Dilemma with Students
Students believe observation is truth. Why? is not in their vocabulary—only What? and How?
If why? is asked, its usually at a level direct to their experience.
We want to avoid management accounting being treated as isolated tools and techniques. Stuff to be put in the tool bag and stored for later reference.
Some Priorities Don’t Change
Improbability of single solutions (intensity of complexity, volatility, and uncertainty)– Budgeting is still appropriate in many settings– Feedback control appropriate (facilitate learning)– Costing will still be needed– Traditional investment controls will still apply in
many settings– Issues of capacity and fixed costs
Some Priorities are Evolving
Hybrid Governance Structure Controls (Supply Chains)
– Target costing, value chain analysis, open book– Customer and supplier surplus generation and sharing
Organizational Controls– Incentive systems, systems and procedures, non-market
pricing
Controls in highly adaptive environments Causal Performance Chains (Strategy Mapping)
Increase ROCE to 12%
Revenue Growth Strategy Productivity Strategy
New Sources of Non-Gasoline Revenue
Increase Customer Profitability Through
Premium Brands
Become Industry Cost Leader
Maximize Use of Existing Assets
ROCENet Margin (vs. industry)
Non-Gasoline Revenue & Margin
Volume vs. Industry Premium Ratio
Cash Expense (cpg) vs. Industry
Cash Flow
Speedy Purchase
Clean Safe Quality Product Trusted Brand
Friendly Helpful Employees
Financial Perspective
Customer Perspective
Help Develop Business
Skills
More Consumer Products
Recognize Loyalty
Share of Targeted Segment
Mystery Shopper Score
Dealer Profit Growth
Dealer Satisfaction
Differentiators
“Delight the Consumer” “Win-Win Dealer Relations”
Basic
Create Non-Gasoline
Products & Services
“Build the Franchise” “Increase Customer Value” “Achieve Operational Excellence” “Be a Good Neighbor”
Improve Environmental,
Health and Safety
Understand Consumer
Segments
Best-In-Class Franchise
Teams
Improve Hardware
Performance
Improve Inventory
Management
On-SpecOn-Time
Industry Cost Leader
New Product Acceptance Rate Environment
Incidents Safety Incidents Dealer Quality
Rating
Yield Gap Unplanned
Downtime
Inventory Levels
Run-Out Rate
Activity Cost vs. Competition
Internal Perspective
A Motivated and Prepared Workforce
• Aligned• Personal Growth
Climate for Action
• Functional Excellence• Leadership Skills• Integrated View
Competencies
• Process Improvement
Technology
Personal BSC Employee Feedback
Strategic Skill Coverage Ratio
Systems Milestones
Learning & Growth Perspective
Mobil NAM&R Strategy Map: Kaplan and Norton
Some New Priorities to Consider
Long Lag Causal Chains– R&D pipelines– Environmental spending– Geographic expansion– Employee investments
Fragile Causal Chains– Organizational learning and adaptation– Environmental scanning
Control Systems and Gov./Org/Inst. Structures Budgetless organizational control (Hope and Frasier) vs. RCA
Some Pedagogical Requirements
Complex, volatile, and uncertain Causal performance chains can be
discovered and applied Compressed time phasing Environmental scanning required Risk taking and decision responsibility Conflict and tradeoffs Discovery of leading indicators
Some new pedagogies: Marketplace simulation (www.marketplace-simulation.com )
Team-based Global Competitive Environment Deep decision complexity
– Assess customer values by market segment– Design product to fit segment(s), design ads– Open sales offices and web portals, place ads– Determine HR policies and incentive schemes– Intangible time phased investments (training, web
enhancements, product enhancements, manufacturing process enhancements)
– Plant capacities, Min/Max rules, setup, quality control studies
– R&D joint ventures
Sample Time Phased Decision: Quality Study
Sample Tradeoff Decision: Min Max Production Rules
Environmental Screening Exercise
Environmental Screening Exercise
Environmental Screening Exercise
Developing Causal Linkages: Sales Performance
Developing Causal Linkages: Leading indicators
Developing Causal Linkages: Competitor Data
Some New Pedagogies: Scenario Planning
Images of the Future– Plausible– Internally consistent– Challenging for users, out of the box
Method (The Art of the Long View, Schwartz)– Issue– Factors and Forces– Dimensions– Scenarios and guideposts
A DECISION: OUR NUCLEAR LEGACY AND REMEDIATION
Public Concern (high)
Private Ingenuity Full Speed Ahead
Public Funding (low) Public Funding (high)
Not Enough The Greater Good
Public Concern (low)