Strategic Management Accounting

Finance & Accounting
Pages 12 (3012 words)
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Strategic Management Accounting Introduction Strategic management differs a lot from the financial management accounting. The differences are with respect to the intent or purpose of evaluation. The strategic management helps to gain a company to gain a strategic edge, while financial management is concerned only with maintaining the financial soundness of the company (Bajaj, 2001).


Strategic management helps the management to align the financial strategies of the company with other strategies namely the marketing strategies, operational strategies and human resource strategies (Bonaccorsi and Daraio, 2009). Financial management cannot connect with the external and internal requirements of the business, thus it is used only as a fact finding method. Whereas, strategic management helps to integrate the external impact on the business together with the internal strength and weakness of the organization and create new set of strategies. The paper presents a critical analysis between the use of return on investment and economic value added as means of measuring the performance. Both the techniques are used only for short term periods and not for achieving long term goals (Chrol, 2011). The discussion pertains to how the two different kinds of technique can be used for achieving long goals. Apart from that, the advantages and disadvantages of four different pricing techniques are discussed namely, market based transfer pricing, full cost transfer pricing, cost plus mark-up transfer prices and negotiated transfer prices. ...
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