A strategic management accounting review on conglomerates

The following notes cover the main Strategic Management Accounting (SMA) topics on the subject of Conglomerates:

• Topic 1: Management Accounting (MA)/ financial evaluation on developing centralized services to the whole conglomerate group.
• Topic 2: MA/ financial review of the portfolio of investment by the conglomerate group, covering an assessment of overall risk involved.
• Task 3: MA/ Financial Management efforts to design appropriate financial performance measures for the various strategic business units (e.g. as investment centres).
• Task 4: MA efforts to develop appropriate transfer pricing/ service charging schemes for corporate centralized services to other business units.
• Topic 5: MA evaluation on whether to spin off the centralized services function as a separate business unit, which then has freedom to also offer their services to the external markets.

As the topic of conglomerates and the related topic of corporate-level stratey have been much examined in the Strategic Management literature, the five topics identified above and the related strategic management concerns and strategic mangement thinking, with obsession on how to gain sustainable competitive advantage, are related more explicitly to the application of relevant Management Accounting practices and techniques in Ward (1993). In this case, Ward's (1993) work, though brief, promotes Strategic Management Accounting (SMA) thinking and SMA practices.


Reference
Ward, K. (1993) "Chapter 11: Conglomerates" Strategic Management Accounting, Butterworth-Heinemann.