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Strategic Management Accounting
Finance & Accounting
Pages 12 (3012 words)
Strategic Management Accounting Table of Contents Introduction 3 Part A 4 Part B 6 1. Market based transfer pricing 6 2. Full cost transfer pricing 8 3. Cost plus a mark-up transfer prices 9 4. Negotiated transfer prices 10 Conclusion 11 Reference List 13 Introduction Financial management and strategic management have a lot of difference in the way the two are applied (Bajaj, 2001).
It does not really help the managers to assess what is best for the company (Bonaccorsi and Daraio, 2009). For example, the financial management of the company is able to indicate if it is appropriate to take more debt by considering the present liquid status of the company. The decision may not have any link with the short term or long term strategic objective of the company. Thus, financial management is not able to see beyond the limitations of the financial data. Strategic management on the other hand is equipped to see beyond and the cover the limitations of the basic financial management. The conclusion derived from the basic financial management techniques can be further modified if the same decision is taken in the light of the strategic objectives of the company. For example, the financial management indicates that the recourse to further debt financing is going to increase the debt burden f the company (Chrol, 2011). If the company considers going for a strategic alliance with another company then the financial condition of the company can improve. The revenue generation capacity will improve from the synergy gained from such strategic alliance. Strategic financial management considers these kinds of variables and factors to obtain the most optimal decision. ...
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