STRATEGIC COST MANAGEMENT  Controlling involves performance evaluation

as an action to consider whether actual

Introduction to Strategic Cost Management and
Management Accounting
WHAT IS MANAGEMENT?
Management- the process of leading and
controlling a group of people, resources, or an
organization in totality to achieve the goals and
objectives of the entity in pursuit of success and value-
creation.
Management- the process of planning,
decision-making, organizing, leading, motivating, and
controlling an organization's human resources,
financial, physical, and information resources to reach
its goals efficiently and effectively.
FOUR MANAGEMENT FUNCTIONS
Planning- determining proper courses of
action and strategizing tactics to enforce to achieve the
goals set.
operations perfectly accomplished the planned
goals.
 Planning and controlling are two functions of
management that go together to determine the
proper courses of action the management shall
do- what’s next? What shall we consider next?
DECISION-MAKING COMES IN!
DECISIONS AND THE NEED FOR
INFORMATION
 For managers to be able to choose proper
decisions that would add value to the process
of the entity, the need for information now
becomes highly important.
 Proper information must be accessible to the
managers so that they will be able to decide on
the proper courses of action to take. Erroneous
decisions usually lead to high costs and
unsuccessful results.

 What shall we do?

 What shall we plan to do?
Organizing- coordinating activities and
resources, and delegation of responsibilities.
 Already have a plan in mind.
 Time to coordinate activities.
 Tell people what to do.
Leading- managing and guiding people, along
with proper motivation and direction.
 The operation is ongoing.
 Managing people.
Controlling- monitoring and evaluating
activities to ensure they meet the set goals.
STRATEGIC COST MANAGEMENT
Strategic Cost Management- use of cost
information as a tool for decision-making and business
development that would support the strategic
placement of an entity.
- Cost information = Cost Accounting
- Cost information as a tool for decision-making
= Cost Management
- Cost information as a tool for decision-making
to support the strategic placement of an entity
= Strategic Cost Management
SIR CHUA CHAP 1

 Already have the targets then compare them to

the actual result. Is it favorable or not?
(Performance Evaluation)
 Determine if you already achieve, really or
not.

MANAGERIAL INFORMATION NEEDS

 Controlling is the function of management

that deals with the determination and
evaluation of whether the goals and objectives
set are being achieved.