What are the most important elements of strategic management accounting and scenario planning?
The examiner for enterprise strategy (E3) explains. How would we define ‘enterprise’ and ‘strategy’? In this context, take enterprise as the business unit. As for strategy: ‘Strategy is the direction and scope of an organisation over the long term, which achieves advantage for the organisation through its configuration of resources within a changing environment to meet the needs of markets and to fulfil stakeholder expectations.’- Johnson and Scholes There are three important elements in this definition: environment, markets and stakeholder, all of which allude to an important aspect of strategy – its external orientation; that is the organisation looking beyond its internal boundaries to its relationships with the outside world. Traditionally management accounting is described as having three dimensions: • allocate costs between costs of goods sold and inventories for internal and external profit reporting • provide relevant information to help managers make better decisions • provide
