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13.Management Accounting and Strategic Management

13.Management Accounting and Strategic Management

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Published by Deepak Ehn

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Published by: Deepak Ehn on Nov 11, 2011
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12/08/2015

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Decision making is a managerial process and it is a function of choosing a particular course of
action out of several alternative courses for the purpose of achieving organisation’s objectives
and goals. Decisions may relate to general day to day operations, can be major or minor.
They may also be strategic in nature. Strategic decisions are different in nature than all other
decisions which are taken at various levels of the organisation during day-to day working of the
organisations. The major dimensions of strategic decisions are:
Strategic decisions require top-management involvement: Strategic decisions involve

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thinking in totality of the organisations and also there is lot of risk involved. Hence,
problems calling for strategic decisions require to be considered by top management.
Strategic decisions involve the allocation of large amounts of company resources: It may

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require huge fnancial investment to venture into a new area of business or the organisation

may require huge number of manpower with new set of skills in them.

Strategic decisions are likely to have a signifcant impact on the long term prosperity of the

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frm: Generally the results of strategic implementation are seen on a long term basis and

not immediately.
Strategic decisions are future oriented: Strategic thinking involves predicting the future

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environmental conditions and how to orient for the changed conditions.
Strategic decisions usually have major multifunctional or multi-business consequence: As

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they involve organisation in totality they affect different sections of the organisation with
varying degree.

Strategic decisions necessitate consideration of factors in the frm’s external environment:

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Strategic focus in organisation involves orienting it’s internal environment to the changes

of external environment.

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