On crisis management - a brief note

For students in business studies, crisis management is a quite useful lens to examine business issues in assignment works and dissertation works. Some useful references are Mitroff and Pearson (1993), Booth (1993). Glaesser (2006) examines crisis management in the tourism industry.



References

1. Booth, S.A. (1993) Crisis management strategy, Routledge.
2. Glaesser, D. (2006) Crisis Management in the Tourism Industry, Elsevier.
3. Mitroff, I.I. and Pearson, C.M. (1993) Crisis Management: A diagnostic guide for improving your organization's crisis-preparedness, Jossey-Bass Publishers.
4. Internet resources on crisis management: http://managementhelp.org/crisismanagement/index.htm

On coaching - a brief note

Coaching is a subject related to Human Resource Management; it is also a form of Management Consulting. There are a number of references on this subject, including Leimon et al. (2005), Gilley and Gilley (2007), Orenstein (2007), and Rogers (2006). I have written an article on e-coaching in 2008 (Ho, 2008).



References

1. Leimon, A., Moscovici, F. and McMahon, G. (2005) Essential Business Coaching, Routledge.
2. Gilley, J.W. and Gilley, A. (2007) The Manager as Coach, Praeger.
3. Ho, J.K.K. (2008) "E-coaching for Management Development in Hong Kong: an examination of market potential and business value from Knowledge Management Perspective", in Joseph Fong, Reggie Kwan, and Fu Lee Wang (eds) Hybrid Learning:  A New Frontier, City University of Hong Kong, August 13-15, pp. 69-77.
4. Orenstein, R.I. (2007) Multidimensional Executive Coaching, Springer.
5. Rogers, J. (2006) Developing a coaching business, Open University Press.

Role theory - a brief note

To study role theory, I suggest that you read Handy (1993; chapter 3). If you have time, you could study Katz and Kahn (1978), a classic on role theory; their work endorses an open systems perspective. More on this topic later. Major concepts in role theory include role conflict,  role overload, and role ambiguity.


References

1. Handy, C. (1993) Understanding Organizations, Pengiun Books
2. Katz, D. amd Kahm. R.L. (1978) The Social Psychology of Organizations, Wiley.
3. Role theory in organizational leadership: http://smallbusiness.chron.com/role-theory-organizational-leadership-4958.html

The notion of "power" in management study - a brief note

Power is a useful conceptual lens to examine many topic areas in business studies. I think a good starting point to learn the subject is Handy (1993; Chapter 5). Pfeffer  (1989) and Hardy (1994) examine the topic of power in the Organization Development tradition. Lukes (1984) is booklet focused on the topic of power from a sociological perspective. Another useful reference I have is Elliott (1983).


References

1. Elliott, R. (1983) "Article 13: Conceptual approaches to power and authority", in Lockett, M. and Spear, R. (editors) Organization as Systems, The Open University Press.
2. Handy, C. (1993) Understanding Organizations, Pengiun Books.
3. Lukes, S. (1984) Power: A radical view, Mcmillan.
4. Pfeffer, J. (1989) "Reading 43: Conditions for the use of power" in French, W.L., Bell, Jr. C.H., and Zawacki, R.A. (editors) (1989) Organization Development, BPI Irwin.
5. Hardy, C. (1994) "Power and Organizational Development: A Framework for Organizational Change", Journal of General Management Vol. 20(2) Winter, pp. 29-41.
6. Power with vs power over: http://buildabetterworkplace.com/2010/02/23/powerwith/
7. On power: http://en.wikipedia.org/wiki/Power_(politics)

Organization Development - a brief note

Organization Development (OD) offers a systematic approach to introduce organizational improvement using applied behavioral science; it has been around for quite a long time.

OD is an important subject in Organizational Behaviour and Organizational Change. A classical textbook on Organization Development (OD) is French and Bell (1990). French, Bell and Zawacki (editors) (1989) is a collection of OD-related articles of quite good quality. More updated references are Hardy (1994), Cummings and Worley (2001) and Bradford and Burke (editors) (2005).



References

1. Bradford, D.L and Burke, W.W. (editors) (2005) Reinventing Organization Development, Pfeiffer.
2. Cummings, T.G. and Worley, C.G. (2001) Organization Development and Change, South-Western College Publishing.
3. French W.L. and Bell, Jr. C. H. (1984) Organization Development, Prentice-Hall.
4. French, W.L., Bell, Jr. C.H., and Zawacki, R.A. (editors) (1989) Organization Development, BPI Irwin.
5. Hardy, C. (1994) "Power and Organizational Development: A Framework for Organizational Change", Journal of General Management Vol. 20(2) Winter, pp. 29-41.
6. Some OD resources in Internet: http://humanresources.about.com/od/orgdevelopment/Change_Management_and_Organization_Development.htm

Corporate culture as an analytical frame - a brief note

Corporate culture is a set of shared value and assumptions by an organization. Corporate cultural lens has been employed in organizational analysis, e.g. Handy (1978). It can be employed in the form of a critical organizational diagnostic approach, e.g. Schein (1999). Martin (1992) points that that there are three perspectives in corporate cultural analysis; this implies that cultural analysis requires sophisticated intellectual competence to conduct. Specific examples of cultural analysis which reflect the richness of perspectives that can be adopted are provided in Frost et al. (1991). Finally, there is also a body of literature of on national culture that is more related to global business study, e.g. Trompenaars (1993) and Hofstede (1991).

Overall, the corporate cultural lens has been used in a broad range of management subjects but it takes very serious effort to master cultural analysis skill in order to apply in dissertation works and in actual business practices.






References

1. Frost, P.J., Moore, L.F., Louis, M.R., Lundberg, C.C. and Martin, J. (editors) (1991) Reframing Organizational Culture, Sage.
2. Handy, C. (1978) Gods of Management, Pan Books.
3. Hofstede, G. (1991) Cultures and Organizations: Software of the mind, McGraw-Hill.
4. Schein, E. (1999) The corporate culture survival guide, Jossey-Bass Publishers.
5. Martin, J. (1992) Cultures in Organizations: Three Perspectives, Oxford University Press.
6. On organizational culture: http://en.wikipedia.org/wiki/Organizational_culture
7. Trompenaars, F. (1993) Riding the waves of culture, Nicolas Brealey Publishing.

Organizational Learning - a brief note

Organizational Learning (OL), as a management theme, has been applied in various management subjects, e.g. in Information Technology management (re: Robey et al., 2000). There are a number of famous references in OL, e.g. Senge (1990) and Argyris (1990). OL is considered an important management topic in contemporary business environment which is increasingly turbulent. In this case, companies need to strengthen their learning capabilities to adapt to the turbulent environment in order to remain viable. Personally, I like the OL framework of Crossan, Lane and White (1999). I have applied OL in decision support systems studies in 1997 (Ho, 1997).

The journal of Development and Learning in Organizations published by Emerald is relevant for study of OL.



References

1. Argyris, C. (1990) Overcoming Organizational Defenses: Facilitating Organizational Learning, Allyn and Bacon.
2. Crossan, M.M., Lane, H.W. and White, R.E. (1999) "An organizational learning framework: from intuition institution", Academy of Management Review Vol. 24(3), pp. 522-537.
3. Ho, J.K.K. (1997) "MPSB Frameworks and Decision Support Systems Studies", Systems Research and Behavioural Science Vol. 14(4) pp. 287-293.
4. Robey, D., Boudreau, M.C. and Rose, G.M. "Review: Information technology and organizational learning: a review and assessment of research", Accounting, Management & Information Technology 10, 125-155.
5. Senge, P.M. (1990) The Fifth Discipline: the art & practice of the Learning Organization, Doubleday Currency.

Knowledge management - a brief note

Knowledge management (KM), as a mangement topic, has been studied in Information Management, General Management, and Management Accounting. I want to provide some brief information to you.

A starting point in KM study is to define data, information, knowledge and, finally, wisdom, see Davenport and Prusak (1998; chapter 1). Another major KM topic is on the classification of knowledge, notably on tacit and explicit knowledge.

There are a number of knowledge management models, such as the SECI model of Nonaka and Takeuchi. There are also KM theories that are explicitly related to information systems management, such as Hansen, Nohria and Tierney (1999), Turban et al. (2008; chapter 10) and Kebede (2010). KM has been employed to study Intellectual Capital accounting, see Starvoic and Marr (year unknown).  Major academic journals on knowledge management is Journal of Knowledge Management published by Emerald and Knowledge and Process Management from Wiley.



References

1. Davenport, T.H. and Prusak, L. (1998) Working Knowledge, Harvard Business Press.
2. Hansen, M.T., Nohria, N. and Tierney, T. (1999) "What's your strategy for managing knowledge?", Harvard Business Review, March-April, pp. 106-116.
3. Kebede, G. (2010) "Knowledge management: an information science perspective", International Journal of Information Management 30, pp. 416-424.
4. Starovic, D. and Marr, B. (year unknown) Understanding corporate value: managing and reporting intellectual capital, published by CIMA, UK.
5. Turban, E., Leidner, D. Mclean, E., and Wetherbe, J. (2008) Information Technology for Management, Wiley.

Learning Systems Thinking in Management - directed readings for beginners

Quite a number of students of mine learn systems thinking in management; some study Administrative Management; others study Computer Science and Information Systems Management. I also find it useful to teach systems thinking and systems theories in dissertation workshops. In the present education system, students do not have time to properly study the subject due to severe time constraints. Below is my suggested reading list for those who are genuinely interested in learning Systems Thinking. I am sure you will have time to study these references some day and, as a result, have a more solid understanding of this subject:

Introductory references I

1. Churchman, C.W. (1979) The Systems Approach, Laurel.
2. Flood, R.L. and Carson, E.R. (1988) Dealing with complexity: an introduction to the theory and application of systems science, Plenum Press.
3. Schoderbek, P.P., Schoderbek, C.G. and Kefalas, A.G. (1985) Management Systems: Conceptual Considerations, 1985.

Introductory references II

1. Jackson, M.C. (1991) Systems Methodology for the Management Sciences, Plenum Press.
2. Ackoff, R.L. (1981) Creating the corporate future, Wiley.
3. Clemson, B. (1984) Cybernetics: A new management tool, Abacus press.

Try to study references I before you move on to references II. There are many other references on systems thinking; the ones I list above are relatively easy to read, thus suitable for beginners on this subject. You cannot learn systems thinking in  1 - 2 months in order to do your homework and then forget it afterward; to learn systems thinking in management, you need to develop a genuine life-long interest in the subject matter. The education system's time constraint does not apply in this case.


References

1. On Systems Thinking: http://en.wikipedia.org/wiki/Systems_thinking
2. On Soft Systems Methodology: http://en.wikipedia.org/wiki/Soft_Systems_Methodology
3. On critical systems thinking: http://en.wikipedia.org/wiki/Critical_systems_thinking
4. On Management Cybernetics: http://en.wikipedia.org/wiki/Organizational_cybernetics#Organizational_Cybernetics
5. On Systems theory: http://en.wikipedia.org/wiki/Systems_theory

On Organizational Cybernetics - a brief note

Cybernetics is the interdisciplinary study of regulatory systems structure. You could actually download the ebook on Cybernetics by R. Ashby (re: http://pespmc1.vub.ac.be/ASHBBOOK.html). Ashby's book is a classic in Cybernetics.  My briefing here is on Management Cybernetics which is the field of cybernetics concerned with management and organizations. Especially, I will provide information on Organizational Cybernetics (OC) which is a more advanced form of Management Cybernetics (MC) in the sense that OC uses use more complex, observer-dependent notion of variety than MC. (re: http://everything.explained.at/Management_cybernetics/). As a beginner to learn OC, I suggest you to start with Jackson (2000). This book gives you an overall view of the essence of OC from a systems perspective. My favoured introductory textbook on OC, which is very much about the Viable System Model (VSM)  of S. Beer, is Clemson (1984). It is easy to read and provides reasonable depth of the subject for a beginner on OC. If you are interested to study the subject further, you could study Espejo et al. (1996) and Espejo and Harnden (1989). Next, try to study the two original textbooks on the VSM by S. Beer, namely, Brain of the Firm and The Heart of Enteprise.

OC and VSM are still being studied and applied with findings being reported in academic journals such as  Systems Research and Behavioural Science and Systemic Practice and Action Research from time to time. There are also some new textbooks on OC such as Espejo and Reyes (2011).  Keep yourself updated with OC via continuous study of it. It is a fascinating subject in Systems Thinking.



References

1. Beer, S. (1979) The Heart of Enterprise, Wiley.
2. Beer, S. (1981) Brain of the Firm, Wiley.
3. Clemson, B. (1984) Cybernetics: A New Management Tool, Abacus Press.
4. Espejo, R. and Harnden, R. (editors) (1989) The Viable System Model, Wiley.
5. Espejo, R. andReyes, A. (2011) Organizational Sytems: Managing Complexity with the Viable System Model, Springer.
6. Espejo, R., Schuhmann, W., Schwaninger, M. and Bilello, U. (1996) Organizational Transformation and Learning: A Cybernetic Approach to Management, Wiley.
7. Jackson, M.C. (2000) Systems Approaches to Management, Kluwer Academic/ Plenum Publishers.
8. On the Viable System Model: http://en.wikipedia.org/wiki/Viable_System_Model

Activity based costing - a brief note

The main textbook to read on activity based costing (ABC) is Bhimani et al. (2008; Chapter 11). ABC system collects costs to activity cost pools, which are assigned to cost drivers to arrive at activity charging rates.  For example, the actvity driver for "drilling assembly holes" is the number of holes; for "equipment clean-up" is the total processing time and for "maintenance" is the number of reworked parts, etc.. (Akyol et al., 2005). These activity cost drivers are not necessarily production volume-related. Thus, these activity cost drivers become the cost allocation bases for other cost objects, e.g. products, service, and customer, etc. As a result, activity costs are assigned to these cost objects based on the calculated activity charging rates, depending on the volume of activity performed on them. It is recognized that ABC drivers occur at different levels of cost hierarchy. (See a worked example on ABC: http://business.fortunecity.com/discount/29/abcworkex.htm). The calculation of actual activity volumes for activity resources (with specific capacities) also reveals unused capacities and activity bottlenecks. This knowledge is also useful for operational and tactical decision support.

Main notions and topic areas of ABC are:

1. Cost hierarchy: ie output-unit-level costs; batch-level costs, cost object (e.g. product/ service) -sustaining cost, and facility-sustaining cost
2. Activity based budgeting
3. Activity based management

ABC mitigates the problem of misallocation of indirect costs in conventional costing methods. Cost misallocation and distortion becomes a more severe problem for enterprises with increasing business complexity, e.g. in terms of increased product range and increased scope of market coverage. Misallocation of indirect cost is an increasingly serious problem when it makes up a larger proportion of the total cost of a business as a consequence of higher business complexity. Cost distortions in product costing can lead to product pricing distortions, which are increasingly serious corporate tactical mistakes when more intense competition in the marketplaces is experienced by company concerned.

ABC thinking appears to be readily endorsed by production managers as they tend to treat staff activities like production activities. An ABC analysis could also reveal non value-added staff costs in the process (Armstrong, 2002). Using ABC to assign more service overhead more accurately appears especially vital for consumer products as marketing and distribution costs are very often much higher than the manufacturing costs of these products (Baxendale, 2001). ABC is useful for service businesses as a cost accounting system whereas conventional cost accounting, being focused on material costing, is much less relevant to them (Baxendale, 2001).  ABC has also been applied in project management as projects tend to possess a high proportion of indirect costs and substantial activity variety (Raz and Elnathan, 1999). Raz and Elnathan (1999), however, recommend a different cost hierarchy for ABC in project cost management, namely, unit level, delivery package level, project level and organization level.

Employing ABC requires additional costs to a company which needs to be weighted by the company concerned with the benefits of using it. For example, when process outputs are basically identical, the net benefit of using ABC does not exist, thus ABC should not be implemented in this case. Naturally, more sophisticated ABC systems are more expensive to develop and maintain.

By doing an internet search, I am able to find information on ABC softwares, e.g. http://activitybasedcostingsoftware.com/. These softwares make ABC adoption by companies technically and economically more feasible. Such software systems on ABC are very often not integrated with the main accounting systems of companies.

Main usages of ABC systems:

1. Pricing and product-mix decisions
2. Process improvement decisions
3. Product and process design decisions
4. Planning and control activities, e.g. used in budgeting.

Related study notes
Note 1

Note 2

Note 3

Note 4

Note 5

Note 6

Note 7

References

1. Akyol, D.E., Tuncel, G. Bayhan, G.M. (2005) "A comparative analysis of activity-based costing and traditional costing", World Academy of Science, Engineering and Technology 3, pp. 44-47.
2. Armstrong, P. (2002) "The cost of activity-based management", Accounting, Organizations and Society 27, pp. 99-120.
3. Baxendale, S.J. (2001) "Activity-based Costing for the Small business: A Primer", Business Horizons, Jan-Feb. 61-68.
4. Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
5. Brimson, J.A. and Antos, J. (1999) Driving value using activity-based budgeting, Wiley.
6. Morrow, M. (editor) (1992) Activity-based management, Woodhead-Faulkner.
7. Raz, T. and Elnathan, D. (1999) "Activitiy based costing for projects", International Journal of Project Management Vol 7(1) pp. 61-67.

A brief management accounting note on Intellectual Capital

There is no common definition of intellectual capital (IC); roughly, IC refers to the intangible resources of a company. IC is hard to measure and is idiosyncratic in nature. Both financial accountants and management accountants are interested in valuing intellectual capital though their main concerns are not the same. Financial accountants want the financial reports to provide valuation of IC to inform both internal and external parties, notabley the financial community. Management accountants need to value IC as well as setting up proper management control systems to manage IC so as to support corporate management to discharge their management functions. More specifically, Tayles et al (2002) identifies the motives of adopting managaement accounting systems for IC in terms of strategic thrust, ROI evaluation, management control, future planning, organisation valuation and organization rationalisation.

Starvic and Marr (Year known) distinguishes two IC approaches, namely, (a) the measurement approaches and (b) the valuation approaches, the former mainly related to management accounting while the latter more affiliated with financial accounting. IC becomes an important topic in Management Accounting (the focus of this article) because increasingly it becomes strategically important to the companies; thus IC value needs to be measured and processes that create and maintain IC values need to be supported with effective Management Accounting system, among others.

IC is generally classifed in the following way:

1. human capital (employees' expertise that can be lost when these employees leave the companies)
2. relational capital (intangible resources as related to external relationships of a company, e.g. with customers, suppliers, and business partners, etc.)
3. structural capital (intangible resources that stay within a company, e.g. cultures and procedures, etc.)

You should note that intellectual property (e.g. patents, trademarks and copyrights, etc) is a subset of IC which can be included in financial statements.

There are a number of models to measure IC value; they usually identify measures of IC performance drivers. Thus, they serve both purpose of IC valuation and accounting support on corporate IC management. These models include performance prism, knowledge assets map approach and Skandia navigator, etc. (Starvic and Marr, Year known). These models adopt the measurement approaches, thus more relevant to management accounting study. [The valuation approaches are not discussed here as they are more related to financial accounting study.] Tayles et al's IC valuation model is another example which explicitly takes on a strategic management accounting stance. Some of these IC models operate in a balance-scorecard way. Most, if not all, of of these models endorse a holistic perspective in value measurement.

The subject of IC draws on the intellectul insights from Knowledge Management and the Resource-based view in strategic management, among others. You need to study these related literature when learning IC.

The following diagram indicates the major topics involved in IC management from strategic management accounting perspective (my lecture notes):

The following diagram further depicts how strategic management accounting is related to Intellectual Capital management. The notion of management control system and the notion of knowledge production process from Bjurstrom and Roberts (2007) are explicitly identified in this diagram as major analytical concepts to use.

A useful academic journal on IC is Journal of Intellectual Capital published by Emerald.


References

1. Bjurstrom, E. and Roberts, H. (2007) "Chapter 4: The principle of connectivity: networked assets, strategic capabilities, and bundled outcomes", in Chaminade, C. and Catasus, B. (editors)Intellectual Capital Revisited: Paradoxes in the Knowledge Intensive Organization, Edward Elgar.
2. Chaminade, C. and Catasus, B. (editors) (2007) Intellectual Capital Revisited: Paradoxes in the Knowledge Intensive Organization, Edward Elgar.
3. Starovic, D. and Marr, B. (year unknown) Understanding corporate value: managing and reporting intellectual capital, published by CIMA, UK.
4. Tayles, M., Bramley, A., Adshead, N. and Farr, J. (2002) "Dealing with the management of intellectual capital", Accounting, Auditing & Accountability Journal Vol. 15(2), pp. 251-267.

Balanced scorecard - a brief note

Balanced scorecard is hierarchic strategic performance management system. Specifically, it measures an enterprise's operating  performance as well as highlight performance drivers. There are two main characteristics about balanced scorecard: (a) it is balanced and (b) it is a scorecard. For (a) balanced scorecard measures both finanical and non-financial aspects of the performance of a business; it is also balanced in the sense that it deals with both short-term and long-term aspects of business performance. For (b), it is a scorecard because it mainly deals with several main performance indicators for each perspective of a balanced scorecard per scorecard. In my view, scorecard is only an analogy on the user-interface design of such a system. Balanced scorecard, in my view, is a kind of executive information system in Management Information System term. In this case, the manager making use of the balanced scorecard is able to focus on key performance indicators in a scorecard, and not a very bulky report. I want to highlight the key topics as related to balanced scorecard here; to learn the balanced scorecard methodology, you need to do more indepth interature review.

First of all, the four main perspectives of balanced scorecard are (Kaplan and Norton, 1996):
(a) financial: specific financial measures to be adopted depend on the stage of business life cycle reached by the company concerned.
(b) customer: examples of measures  are customer  satisfaction, customer profitability, etc.
(c) internal business process: the focus is on business processes that have high strategic significance.
(d) learning and growth: performance measures are mainly related to human resource, information systems capability and company procedure system.

Each perspective covers a few key performance measures; Kaplan and Norton (1996) mention that these performance measures should be derived from a company's business-unit strategy. A company's balanced scorecard system can be computer-based (see http://www.balancedscorecard.org/Software/BalancedScorecardSoftware/tabid/61/Default.aspx.)

Second, performance measures of these four perspectives can be related together to form a cause -and-effect map; the such a map, some performance measures are lead indicators and some are lag indicators (see http://ianjseath.wordpress.com/2009/08/26/lead-vs-lag-indicators/). This balanced scorecard  map is called strategy map. In general, the cause-and-effect relationship of variables flows from learning & growth perspective realm, to the internal business process perspective domain, and then to the customer perspective domain, finally reaching the financial perspective domain (Kaplan and Norton, 1996).

Third, the cause-and-effect map of the balanced scorecard tells the story of a business strategy to its managers in the form of a hierarchic systems dynamic model. It is expected to be able to effectively support organization-wide strategy planning, implementation and control effort.

The key characteristics of balanced scorecard are summarized in the following diagram:

Financial <------> Customer <--------> Internal business process <--------> Learning & growth
(End-point in strategy map)                                                    (Start-point in strategy map)
Generic criteria <--------------------------------------------------------> Idiosyncratic criteria
Performance outcome measures <---------------------------> Performance driver measures
Lag indicators <---------------------------------------------------------> Lead indicators
Effect related <-------------------------------------------------------------> Cause related

There are some challenges and concerns of using balanced scorecard, e.g. the validy of the cause-and-effect relationships are difficult to establish and balanced scorecard appears to be difficult to employ at the corporate level. It can also be argued that the balanced scorecard should consider other perspectives such as supply chain perspective and environmental management perspective, etc. Recent development in balanced scorecard approaches has been addressing some of these concerns. For example, Kaplan et al (2010) discuss how balanced scorecard can be employed to manage corporate alliances. Figge et al (2002) discuss how balanced scorecard can be enhanced to incorporate environmental and social aspects in its application to become a sustainability balanced scorecard. Their main approach is to add one more perspective to the balanced scorecard, namely, the non-market perspective.

Finally, I want to point out that the balanced scorecard approach has contributed to studies in other Management Accounting topics. For example, the Intellectual Capital valuation model of Tayles et al (2002) shares certain key characteristics with the balanced scorecard approach, e.g. using  cause-and-effect map linking financial and non-financial variables with the financial perspective being the top-level perspective in their model. [I also note that Tayles  et al (2002) maintains that their model "avoid the categorisation of the BSC [Balanced Scorecard]"].


Related lecture notes
Note 1

Note 2

Note 3

Note 4

Note 5

Note 6

References

1. Figge, F., Hahn, T., Schaltegger, S. and Wagner, M. (2002) "The sustainability balanced scorecard - linking sustainability management to business strategy", Business Strategy and the Environment 11, pp. 269-284.
2. Kaplan, R.S. and Norton, D.P. (1996) "Linking the balanced scorecard to strategy", California Management Review Vol. 39(1), pp. 53-79.
3. Kaplan, R,S. and Norton, D.P. (1996) The Balanced Scorecard, Harvard Business School Press.
4. Kaplan, R.S., Norton, D.P. and Rugelsjoen, B. (2010) "Managing Alliances with the Balanced Scorecard", Harvard Business Review, Jan-Feb., pp. 114-120.
5. Lead vs lag indicators: http://ianjseath.wordpress.com/2009/08/26/lead-vs-lag-indicators/
6. Niven, P.R, (2005) Balanced Scorecard Diagnostics: Maintaining maximum performance, Wiley.
7. Tayles, M., Bramley, A., Adshead, N. and Farr, J. (2002) "Dealing with the management of intellectual capital", Accounting, Auditing & Accountability Journal Vol. 15(2), pp. 251-267.
8. A brief introduction on balanced scorecard: http://www.netmba.com/accounting/mgmt/balanced-scorecard/
9. A blog note related to the notion of balance in Balance Scorecard: http://josephho33.blogspot.hk/2012/10/a-discussion-on-balance-in-balance.html

A brief note on harvard referencing

There are quite a lot of resources on harvard  referencing in the Internet. What I do is to provide a few illustrations on how to do proper harvard referencing; after learning these few examples, you should refer to more detailed guidelines in the Internet.

A. On references

The examples I take are from Saunders et al. (2009). You should use this format in your reference list and be consistent in your formatting.

Example 1: a book (1 writer)
Moustakas, C. (1994) Phenonmenological Research Methods. Thousand Oaks, CA: Sage.

Example 2: a book (2 writers)
Phillips, N. and Hardy, C. (2002) Discourse Analysis: Investigating Processes of Social Construction. London: Sage.

Example 3: An article in a handbook with editors
Johnson, P. (2004) "Aalytic indiction", in C. Cassell and G. Symon (eds) Essential Guide to Qualitative Methods and Analysis in Organizational Research. London: Sage, pp. 165-179.

Example 4: An academic article
Becken, S. (2007) "Tourist perception of international air travel's impact on global climate and potential climate change policies", Journal of Sustainable Tourism Vol. 15  (4), pp. 351-360.

Example 5: an article in Internet
Dragon's Den (2007) Series, Episode 1. Beach Break Live. British Broadcasting Corporation Television broadcast, 15 Oct. Available at: http://www.bbc.co.uk/dragonsden/ series5/episode1.shtml [Accessed 8 June 2008.]


B. On referencing
 As to referencing, I use the following extract from Ho (1997) for illustration:

Start quote:

Logistics can be defined as 'the organisation, planning, implementation and control of the acquisition, transport, and storage activities from the purchase of raw materials up to the delivery of finished products to the customers' (Broeke et al, 1989). For Mather (1988), logistics is operations planning and control.
......

Logisticians may share the view of Stannack (1996a) on purchasing and supply chain management....


End quote


I highlight the main referencing practices with different font colors to facilitate your learning on how to do referencing. You need to note that there are two topics here: (a) on references and (b) on referencing.



 References

1. Ho, J.K.K. (1997) "What can contemporary systems thinking offer to logistics management as a management discipline", European Journal of Purchasing & Supply Management, Vol. 1(2), pp. 77-81.
2. Saunders, M., Lewis, P. and Thorhhill, A. (2009) Rsearch methods for business students, 5th edition, Prentice Hall.
3. On harvard referencing:  http://libweb.anglia.ac.uk/referencing/harvard.htm

A brief note on takt time

Takt time establishes the pace for manufacturing lines and aims to match production pace with customer demand. The following example illustrates how to calculate takt time:

A bicycle factory assembles a number of frame sizes of its 12-speed mountain bicycles through a series of workstations. The production line operates one shift a day; with breaks and lunches considered, the production line is running 400 minutes per shift. It has a 4-shift week.

Weekly demand for the bicycles is as follows:

Frame size	19”	20”	21”	22”	23”	24”
Weekly demand	225	220	260	420	270	360

What is the necessary takt time?

Steps:
(1) Total weekly demand: (225+220+260+420+270+360) = 1,755
(2) Total weekly work time = (400 minutes per shift x 4 shifts per week x 60 second per minute) = 96,000 seconds
(3) Takt time = 96,000 seconds / 1,755 frames = 54.7 seconds per frame



Reference
On takt time: http://en.wikipedia.org/wiki/Takt_time

A brief note on Moral Hazard

The general idea of moral hazard is that "the more you feel insulated from risk, the more temptation you have take it" ( http://banking.about.com/od/loans/a/MoralHazard.htm). The context of my study of the topic of moral hazard is in Strategic Management Accounting, In this setting, moral harzard is a situation in which an employee prefers to exert less efforts or report distorted information as desired by the owner because the employee's effort cannot be accurately monitored (Bhimani et al. 2008) . From this description, I can discern 3 inter-related management issues: (a) issue of reward system design, (b) issue of performance evaluation system, and (c) issue of motivation.


References

1. Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
2. On moral hazard: http://en.wikipedia.org/wiki/Moral_hazard
3. How moral hazard works: http://banking.about.com/od/loans/a/MoralHazard.htm

Transfer pricing - a brief note

In Bhimani et al. (2008), the topic of transfer pricing is covered in Chapter 18. They use a case study to illustrate the three options used in transfer pricing, namely, (a) market-based transfer prices, (b) cost-based transfer prices, and (c) negotiated transfer prices. This is captured in the following diagram drafted by me:

The general rule they offer for transfer pricing is:

Minimum transfer price = additional incremental costs per unit incurred up to the point of transfer + opportunity costs per unit to the supplying division.

Essentially, this is the market price available to the supplying division. Thus, if the supplying division can sell the product to the marketplace at $40 per unit while its incremental cost per unit is $30 per unit. Then, its opportunity cost per unit is ($40-$30) = $10 per unit. Or, using the formula from them, the minimum transfer price is $30 + $10 = $40 (ie market price per unit).

The formulation of transfer pricing needs to also take into considerations of taxation, treasury management, distress price factor and divisional performance measurement.



References

1. Asia Briefing Ltd. (2009) Transfer Pricing in China, published by Asia Briefing Ltd.
2. Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
3. Emmanuel, C.R. and Mehafdi, M. (1994) Transfer Pricing, Academic Press, published in association with CIMA.

Performance measurement in Management Accounting - a brief note

There are financial and non-financial performance measures that can be employed at different levels of an organization (Bhimani et al., 2008; Chapter 19).

The four main financial/ accounting-based performance measures are:

1. Return on investment (ROI)
2. Residual Income (RI)
3. Economic Value Added (EVA)
4. Return on sales (ROS)

In compiling these financial performance measures, you need to consider (a) alternative definitions of investment, e.g. total assets available, total assets employed, working capital plus long-term assets and shareholders' equity and (b) alternative ways to measure assets, e.g. current cost, long-term assets at gross or net book value, (c) the targeted levels of performance and feedback timing in the actual design of performance measurement system and (d) the trade-off between incentive creation versus risk imposition (Bhimani et al., 2008; Chapter 19).


You need to pay attention to the advantages and disadvantages of using different financial performance measures. For example, using ROI as a divisional performance measure to be maximized can lead to decisions that  do not maximize net present value in capital investment decision because an investment project has a positive net present value (NPV)  but an internal rate of return (IRR) lower than the existing divisional ROI can still be rejected as such an investment will dilute the existing divisional ROI. Meanwhile, it is acknowledged that asset valuation based on historical-cost has limitations; yet, this valuation basis can well be acceptable in performance measurement if operation performance evaluation is mainly concerned about year-to-year changes (Bhimani et al., 2008; Chapter 19). It is also important to note that peformance of managers and performance of organizational units that the managers are in charge of are two different things. Companies sometimes assign their best managers to take charge of divisions that are in difficult situations.

You need to examine the balanced scorecard approach and benchmarking as prominent performance measurement approaches that take into consideration both financial and non-financial performance measures. Increasingly, performance measurements need to incorporate environmental/ ethical considerations.

References

1. Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
2. Coates, J.B., Davis, E.W., Longden, S.D.,Stacey, R.J. and Emmanuel, C. (1993) Corporate Performance Evaluation in Multinationals, CIMA publication.
3. On balanced scorecard: http://josephho33.blogspot.com/2011/10/balanced-scorecard-brief-note.html

Management Control Systems - a brief note

A management control system (MCS) is a system that gathers and uses information for aiding and coordinating planning and control decision process throughout an organization as well as guiding employee behaviour (Bhimani et al., 2008; Chapter 18). Since it is a control system, you need to have some basic understanding of a control model (also refer to control theory). This is depicted in the following diagram:

Management control information can cover various organizational levels: (a) total organization level, (b) customer/ market level, (c) individual-facility level and (d) individual-activity level.  The distinctive MCS features can be categorized into 6 dimensions (a) action/ results controls, (b) formal/ informal controls, (c) tight/loose controls, and (d) restricted/ flexible, (e) impersonal/ interpersonal controls and (f) financial/ non financial information (Auzair, 2011). The management accounting system is a subsystem of the formal part of an MCS in this case. On studying an MNC, a few key considerations usually are pointed out:

a. Centralization vs decentralization
b. Motivation and goal congruence
c. Responsibility centre choice
d. Transfer pricing concern


There is also a discussion on how MCS can affect the impacts  of using enterprise resource planning systems in enterprises (Kallunki et al., 2011).

The overall concern of the topic on MCS is how to design an effective MCS which is aligned with an organization's strategy and goals.


References

1. Auzair, S.M. (2011) "The effect of business strategy and external environment on management control systems: a study of Malaysian hotels", International Journal of Business and Social Science Vol 2 (13), pp. 236-244.
2. Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
3. Kallunki, J.P., Laitinen, E.K. and Silvola, H. (2011) "Impact of enterprise resource planning systems on management control systems and firm performance" International Journal of Accounting Information Systems 12, pp. 20-39.

Linear Programming - a brief note

Linear programming supports short-run decision making with resource constraints. The main reference for studying Linear Programming is  Lucey (2002; chapters 16-18). The main main techniques are: (a) the graphical approach and (b) the simplex method.

Some readings on dealing with resource constraints are useful. These include: (a)  Bragg (2007; chapter 1)  on the theory of constraints, and (b)Arnold and Turley (1996; Chapter 11) on "The effect of scarce resources on short-term decisions". There are specific references on Linear Programming, e.g. Bunday (1984).

Finally, you should explore how to use Excel Solver function to solve linear programming problems and compare your results with that of the simplex method. For that, refer to: http://josephho33.blogspot.hk/2011/11/conducting-quantitative-analysis-with.html

Also note a related topic on Theory of Constraints: http://en.wikipedia.org/wiki/Theory_of_Constraints


Related notes
Note 1

Note 2

Key concepts:

• shadow price: the extra contribution able to be obtained from one more unit of a scarce resource.
• Contribution margin: http://en.wikipedia.org/wiki/Contribution_margin

References

1. Arnold, J. and Turley, S. (1996) Accounting for Management Decisions, Prentice Hall.
2. Bragg, S.M. (2007) Throughput Accounting, Wiley.
3. Bunday, B.D. (1984) Basic Linear Programming, Edward Arnold.
4. Lucey, T. (2002) Quantitative Techniques, Thomson.

Transportation management - a brief note

A study plan on transportation management should cover Bentz (2003). This provides you with a broad and qualitative perspective of the subject. The main views of Bentz (2003) are that: (a)transportation management is a "competitive differentiator" for business enterprises and (b) there are operating value drivers that can improve gross profit, improve capital deployment and decrease operating costs, resulting in improved shareholder value.  Bentz maintains that transportation management softwares are required for companies to manage complex global supply chains in an increasingly demanding business environment.

Lucey (2002) offers a few quantitative techniques in transportation management, whose practical value needs to be reviewed within the broader subject context as described in Bentz (2003). My general impression is that the quantitative techniques offered sensitive our understanding of these techniques and their underlying logic but appear very simple to address this complex function of transportation management as depicted in Bentz (2003).

Related lecture note

Question for class discussion:

• How can corporate transportation arrangement make trade-off between customer servcie level and cost of operations?
• Could you suggest 2 ways of doing so.

  

References

1. Bentz, B.A. (2003) "Integrated transportation management" Chapter 2.6 in Gattorna, J.L., Ogulin, R. and Reynolds, M.W. (editors) Gower Handbook of Supply Chain Management, Gower.
2. Lucey, T. (2002) "Transportation: Chapter 20", Quantitative Techniques, 6th edition, Thomson.
3. Transportation management systems: http://en.wikipedia.org/wiki/Transportation_management_system
4. On modes of transport: http://en.wikipedia.org/wiki/Mode_of_transport
5. Institute of Transport Management: http://www.itmworld.com/
6. The Chartered Institute of Logistics and Transport (UK): http://www.ciltuk.org.uk/pages/home
7. A white paper on Transportation Management (pdf): http://www.aquamcg.com/DesktopModules/ListingOfEvents/UploadFile/633782680821466250AquaMCG_TMS_TechnologySeries.pdf
8. On intermodel freight transportation (pdf): http://onlinepubs.trb.org/onlinepubs/millennium/00061.pdf

List of academic forums

The following academic forums provide information and other study materials as supplementary readings for your study:

1. Company secretaryship and admin
2. Social sciences
3. Engineering mgt and economics
4. Development and education
5. Human resource mgt
6. Accounting and finance
7. Logistics, operations and TQM
8. General business stuides
9. Strategic mgt
10. IT mgt
11. Systems thinking in mgt
12. Business research methods
13. Marketing mgt
14. Hospitality mgt
15. Global business mgt
16. Project and innovation

Budgeting - a brief note

A budget is a plan in monetary term covering a certain period of time in the future by management, which facilitates organizational coordination and implementation of such a plan. There are a number of key topics to cover:

1. A budgeting cycle
2. Roles of budgets
3. Master budget and its sub-budgets
4. Types of budgeting (e.g. Kaizen budgeting, activity-based budgeting, zero-based budgeting, a flexible budget,  a rolling budget, etc)
5. Budgeting and responsibility accounting

Budgeting, as a topic in Management Accounting, has been studied for a long time, see for example, CIMA/ICAEW (2004). The subject of budgeting should be examined in the broader intellectual context of corporate planning/ strategic planning; the subject can also be studied from from various perspectives, e.g. cultural, behavioural, and strategic management perspectives, etc..

References

1. Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
2. Brimson, J.A. an Antos, J. (1999) Driving value using activity-based budgeting, Wiley.
3. CIMA/ICAEW (2004) Better Budgeting: A report on the Better Budgeting Forum from CIMA and ICAEW, July.
4. Hope, J. and Fraser, R. (2003) "Who needs Budgets", Harvard Business Review, February, pp. 108-115.
5. http://josephho33.blogspot.com/2011/08/future-analysis-in-strategic-management.html
6. On traditional budgeting and beyond: http://www.cfoedge.com/resources/articles/cfo-edge-traditional-budgeting-vs-beyond-budgeting.pdf

Leadership theories: a brief note

Discussion of leadership usually starts with a comparison between the concepts of leaders and managers. In this respect, leaders are more concerned  about formulating vision and introducing changes while mangers are more concerned about maintaining order and implementing strategy (Robbins, 2003; chapter 11). There are two main types of leadership identified in the literature, namely transactional and transformational leadership. Moreover, there are 3 major categories of leadership theories:

• Trait theories (e.g. charisma; ambitious, intelligent, willing to lead, etc.)
• Behavioral theories (e.g. the managerial grid)
• Contingency theories (e.g. Fiedler contingency model; Hersey and Blanchard's situational theory; path-goal theory)

In the literature, there are discussion on (a) leader [a person] and (b) leadership [a function]. Leadership has also been defined as the ability to influence a  group for goal achievement (Robbins, 2003). The subject of leadership is a mature subject but is still actively investigated in the academic world. Some of these leadership theories are not compatible with each other; for example, some hold the view that leaders are flexible to change their leadership style while others do not. There is at least one refereed journal I am aware of that is dedicated to leadership study called The Leadership Quarterly published by Elsevier. Many companies still run inhouse leadership workshops for their staff.


A related blog article: http://josephho33.blogspot.hk/2012/09/leadership-discussion-agenda.html

References

1. On charisma: http://en.wikipedia.org/wiki/Charisma
2. Robbins, S.P. (2003) Organizational Behavior, Prentice Hall.

Formulating dissertation titles for Engineering Management study

To start with, the basic format for a generic dissertation title is as follows

 

• A (#1) study on (#2) for (#3) based on (#4): a (#5) [optional] or
• Development of a (#2) for (#3) based on (#4)

 

#1: indicate nature of the research or nature of research objective: e.g. an evaluative study, or Development of a.. (indicate the objective being to construct or create something)

 

#2: the object of investigation: e.g. thermal comfort or a quality assurance system, etc. It could be an equipment, a process, a policy or something more subjective, e.g. user satisfaction.

 

#3: for a client system, e.g. a company, a business sector, etc.

 

#4: a specific methodology or theorectical framework; at least based on a specific research method, e.g. survey interview

 

#5: additional information on #1: e.g. a case study [This part is optional]

 

To formulate a dissertation title, thus, you do need to have some ideas about research objectives, research methods and relevant literatures. You also need to consider 3 factors:

 

a. Whether you are interested in the topic
b. Whether you have already got some relevant articles and research materials or that you are confident that you will be able to obtain the written resources
c. Whether the dissertation project has high practical and academic values

 

In one class exercise, I have asked students to make use of my evaluation form (Ho, 2011) to quickly draft a dissertation proposal title and quickly figure out its objectives and research methods. When using the evaluation form in this case, you should write down a few remarks to provide more specific information about your proposal idea.

Reviewing Economic Value Added from Strategic Management Accounting Perspective

Economic Value Added (EVA) appears to be a measure of economic income, an economic concept from Alfred Marshall (Young, 1997). It has been pointed out that reported profit figures in financial reports are distorted measures for this purpose, and such distortion is addressed by the EVA measure. The main value of using EVA as a business performance measure is that: when managers are rewarded based on EVA performance, they will think like business owners and will be less interested in manipulating accounting profits. (Young, 1997).

Reviewing Economic Value Added (EVA) from Strategic Management Accounting Perspective appear to be a straightforward task. First of all, you study Bhimani et al. (2008; Chapter 19).  Next, you read Biddle, Bowen and Wallace (2005), which also introduces the notion of EVA reasonably well. Articles on EVA are not difficult to find. What you need to do is to study a few from the academic sources, e.g. Garvey and Milbourn (2000) and Young (1997) and a few from professional journals. e.g. Parkinson (2004) and Pettit (2000). I especially recommend you to spend more initial effort to study Young (1997) as it explains the nature of EVA, its strengths and weaknesses quite clearly and in an accessible way. Below is my initial diagram to capture the main ideas in EVA. It is very crude in current form, and you are encouraged to reconfigure and refine it via  more literature review of your own:

In your review of EVA, I suggest you to also consider how EVA is to be used in balanced scorecards to support corporate strategic management. Finally, when doing your literature review, I suggest you to consider Ho (2011)'s list of SMA evaluation questions.



References

1. Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
2. Biddle, G.C., Bowen, R.M. and Wallace, J.S. (2005) in Chew, Jr., D.H. and Gillan, S.L. (editors) Corporate Governance at the Crossroads: A book of readings, McGraw-Hill.
3. Garvey, G.T. and Milbourn, T.T. (2000) "EVA versus Earnings: Does it matter which is more highly correlated with Stock Returns?", Journal of Accounting Research Vol. 38 Supplment, pp. 209-245.
4. Parkinson, J. (2004) "Economic Value Added: Does it Add Value?" International Accountant, May, pp. 36-38.
5. Pettit, J. (2000) "EVA and Production Strategy", Industrial Management, Nov.-Dec., pp. 6-13.
6. Young, D. (1997) "Economic Value Added: A Primer for European Managers", European Management Journal Vol. 15(4)  pp. 335-343.

Reviewing Environmental Management Accounting from Strategic Management Accounting perspective

Environmental Management Accounting (EMA) makes use of the following two types of information for internal decision-making: (a) physical information as related to energy, water and materials (including waste) and (b) monetary information on environement-related costs and earnings. (International Guidelines on Environmental Management Accounting, by IFAC, 2004). EMA thus should support corporate environmental management (and corporate environmental strategy), resulting in improved business efficiency and effectiveness. The underlying view is that an environmentally friendly corporate strategy is able to appeal to customers, employees and investors. Strategic Management Accounting (SMA), in the form of EMA, should offer effective support to such corporate strategic decision making processes. More specifically, the 3 main areas of benefits of EMA usage are: compliance efficiency, eco-efficiency and strategic position (IFAC, 2004). EMA typically involves "life-cycle costing, full-cost accounting, benefits assessment and strategic planning for environmental management." (IFAC, 2004).

The topic of Environmental Management Accounting was not explained in detail in standard Management Accounting textbook. Anyway, there is no single universally accepted definition of EMA (IFAC, 2004). Nevertheless, there are some useful references from the Internet. I strongly recommend you to study the Exposure Draft of "International Guidelines on Environmental Management Accounting", which provides relevant information and discussion that is related to Strategic Management Accounting (SMA) study. The second document I suggest you to study is A guide on Environmental Management published by CIMA. This document explicitly explains the role of Management Accountants in Environmental Management. There are also a number of brief articles published by CIMA on this topic. As to academic articles on this topic, I suggest you to study Dillard, Brown and Marshall (2005). Their work specifically addresses the task of how to establish environmentally enabling accounting information systems. For them, there are 3 intended goals in this kind of accounting initiatives: legitimacy, competitive advantage, and enlightened management. It is not difficult to spot the relationship of their work with the SMA theme, especially on competitive advantage (2nd intended goal)-based accounting initatives. It probably is  more controversial when we examine to what extent, EMA from a SMA perspective, should cover the legitimacy (1st intended goal) and enlightened management (3rd intended goal). From my undestanding, the subject of strategic management itself is broad enough to consider all the 3 intended goals. Another academic article that is relevant is Jones (2010). Below is a diagram that depicts the main concepts and concerns in Environmental Management Accounting from SMA perspective:

As you review these documents, try to consider the list of SMA evaluation questions (Ho, 2011). Try also to make sense of the viewpoints and ideas when reading EMA articles in terms of the diagram above. If you have more time to do literature review, try to also study articles on Environmental Management from a more general management perspective, e.g. Wagner (2007) and Epstein and Roy (1998). This kind of articles provides useful contextual information for your review and deepen your understanding on your topic of investigation.


References

1. CIMA (year unknown) A guide on Environmental Management, CIMA publication
2. Dillard, J., Brown, D. and Marshall, R.S. (2005) "An environmentally enlightened accounting", Accounting Forum 29, pp. 77-101.
3. Epstein, M. and Roy, M.J. (1998) "Managing Corporate Environmental Performance: A multinational perspective", European Management Journal 16(3), pp. 284-296.
4. IFAC (2004) "International Guidelines on Environmental Management Accounting: Exposure Draft", published by International Federation of Accountants, Nov.
5. Jones, M.J. (2010) "Accounting for the environment: towards a theoretical perspective for environmental accounting and reporting", Accounting Forum 34, pp. 123-138.
6. Wagner, M. (2007) "Integration of environmental management with other managerial functions of the firm", Long Range Planning 40, pp. 611-628.
7. http://josephho33.blogspot.com/2011/08/corporate-environmental-management.html

Reviewing target costing from Strategic Management Accounting perspective

A starting point to learn target costing is to study Bhimani et al. (2008; chapter 12). Then you study some of CIMA articles as they are easier to read and provide much discussion that is quite literature review in nature, e.g. Jack (2008) and CIMA (2005). As to academic articles on this topic, I found Lockamy III and Smith (2000) and Okano (1996) useful for literature review work. Based on Lockamy III and Smith (2000) and Jack (2008), I produced the following diagram to capture some of the main ideas underlying target costing:

Academic articles are more difficult to read than the working papers from CIMA. Try to make use of the SMA evaluation questions of Ho (2011) to review your readings.


References

1. Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
2. CIMA (2005) Target costing in the NHS: Reforming the NHS from within, published by CIMA Working Group Discussion Paper, October.
3. Jack, L. (2008) Cost management discussion paper Oct. 2008: from gate to plate: towards collaborative target cost management in agriculture and food, CIMA publication.
4. Lockamy III, A. and Smith, W.I. (2000) "Target costing for supply chain management: criteria and selection", Industrial Management & Data Systems 100/5, pp. 210-218.
5. Okano, H. (1996) "Target cost management, Strategy and Organization in the automotive industry" Draft for 1996 IMVP Sponsors Meeting, Osaka City University, Japan.

Reviewing life cycle costing from Strategic Management Accounting perspective

To review life cycle costing, you first study the basic concept from Bhimani et al. (2008; Chapter 12). Then, you need to study carefully Emblemsvag (2003; chapter 2), which is a more detailed explanation of life cycle costing from the management accounting perspective. The following diagram roughly captures the main ideas of this reference from Strategic Management Accounting perspective:

In your reading, you will come across terms and concepts that you are not familiar with, e.g. product life cycle notion. For that, you probably need to learn more about these related concepts via Internet search. After that, you try to do more reading on this topic; a more academic article that is SMA oriented, thus highly relevant is Dunk (2004). Do not be surprised that some of these articles are more engineering in perspective than management accounting in perspective, e.g. Gluch and Baumann (2004) and Bailey (1991). As you conduct your review, try to bear in mind the list of evaluation questions in strategic management accounting from Ho (2011).


References

1. Bailey, P.E. (1991) "Life-Cycle Costing and Pollution Prevention", Pollution Prevention Review, Winter, pp. 27-39.
2. Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
3. Dunk, A.S. (2004) "Product life cycle cost analysis: the impact of customer profiling, competitive advantage, and quality of IS information", Management Accounting Research 15, pp. 401-414.
4. Emblemsvag, J. (2003) Life Cycle Costing, Wiley.
5. Gluch, P. and Baumann, H. (2004) "The life cycle costing (LCC) approach: a conceptual discussion of its usefulness for environmental decision-making", Build and Environment 39, pp. 571-580.