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Part A: Compliance, control and competitive support are important factors that have shaped management accounting practice. However, modern business now places much greater emphasis on competitive support to achieve strategic objectives and less emphasis on compliance and control. Discuss factors that have contributed to the development of Management Accounting Practice and evaluate the usefulness of Balanced Scorecard in light of your discussion.


Part B: Qanats is a large ASX listed company that operates internationally and domestically. Access Qantas's most recent annual report and complete the following tasks: 1. identify Qantas's critical success factors (CSFs) and key performance indicators (KPIs) 2. Based on your answer in 1, construct a strategy map that aligns with Qantas's long term objectives 3. Develop a Balanced Scorecard based on your answer in 2. 


Your answer to task 2 can be completed by using PowerPoint, Word or similar program and then pasting it to your document. 
Your answer to task 3 can be completed by using Excel, PowerPoint or Word and then pasting it to your document. 

Balanced Scorecard Approach

The need to adopt adequate performance measures was the reason why a balanced scorecard approach was implemented. The utility of a balanced scorecard approach is clearly related with the importance of incorporating middle management in the management selection. Every department can frame its own scorecard measures keeping in mind their performance levels and determining prime success factors. Balanced scorecard approach is globally accepted and implemented. It is used not only in profit-making industries and corporate but also used by government and nonprofit corporations. Balanced scorecard approach is constructed in such a manner so as to assist managers and executives in understanding the performance pattern of the organization. It is also used so as to better external and internal communication with regards to the strategy and vision of an organization. Earlier, balanced scorecard approach was used simply to measure the performance of an organization but in the present scenario, this approach is used to redesign the strategies of an organization on a regular basis (Rompho, 2011). It not just provides the management with the performance results but also makes way for strategic planning and procedure measures.

It is important to look into 4 relevant perspectives so as to understand the utility of the results of the balanced scorecard approach. The very first being the customer’s perspective. In customers perspective, it is important for the managers to be aware of the company’s potential and ability to meet the consumer requirements. Internal business perspective is another important perspective. Here, the managers are required to concentrate on the critical internal affairs of business which shall allow them to meet the consumer requirements. Next is learning and innovation perspective (Rompho, 2011). Here, an organization’s will and efforts to innovate, improve and learning shall add value to the organization. Financial perspective is the final perspective where the application of balanced scorecard approach in the private sector has focused on the market share and making profits primarily while in the public sector the focus is on complying with the outcome-oriented measures set by the GPRA. In the context of these perspectives, it should be noted that an organization is free to make a choice so as to adopt or abide by the same. An organization is independent enough to frame or construct their own measures and viewpoints considering the benefits that can be achieved in order to become a successful organization (Venanci, 2012).

It is important to understand that the balanced scorecard approach is complete in its own being and it does not portray the pattern of the measures. It depends entirely on the organization and its people on how it should be constructed. The success of the balanced scorecard approach entirely depends on the measures and the consent of the majority of the people of an organization along with the way these measures are adopted and implemented in the course of business (Parrino, Kidwell & Bates, 2012).

Balanced scorecard approach is useful enough in directing all the four perspectives may it be customer’s perspective, internal business perspective, learning, and innovation perspective or financial perspective. The utility of the balanced scorecard approach is huge. This is why the organizations are shifting from traditional scorecard approach to balanced scorecard approach where the measures are framed and constructed in a personalized manner considering its strengths and weaknesses so as to achieve favorable results (Larry & Christopher, 2014).

MAP

Management accounting practice (MAP) influences the performance of companies. No matter what kind of business or industry is, the MAP remains the same for all. In Malaysia, most of the small and medium enterprise has opted for management accounting practice as traditional costing and budgeting so as to ease the decision-making process for the management. Due to the size of the organization, such small and medium enterprises may not adopt comprehensive management accounting practices (Shim & Siegel, 2009). Also, smaller companies are less likely to adopt modern management accounting practices and implement traditional management accounting practices instead. Larger companies may most likely adopt modern management accounting practices like sophisticated management and cost accounting system so as to take decisions regarding costing and pricing of their goods (Vaitilingam, 2014). Larger the companies, higher would be the number of information handled by the managers. This can also be due to the fact that larger the company, larger shall be the resources and easier it would be to implement and utilize management accounting practices.

MAPs are considered relevant when the size of the manufacturing organizations increases in certain countries like Estonia. This is because that in order to measure the performance of an organization in context to client groups and sales region the managers require more information (Ross et. al, 2014). The size of an organization plays an important role in the implementation of management accounting practice for bigger companies are more likely to implement MAP as compared to small and medium enterprises. Also, the competition in the market also plays a pivotal role in allowing companies to adopt management accounting practices. MAP’s allows the organizations to compete with their competitors in such a manner that facilitates decision making. Internal and external factors are the factors behind the intense competition that are dealt by the maps in organizations (Larry & Christopher 2015).

Strategy and technology of the company are the internal factors while the external environment at the accounting and business level that has the capability of shaping the internal system entirely constitutes the external factors.

For a company to grow and sustain its existence it is important for it to appoint qualified staff for accounting. Generally, bigger companies have finance and accounting department and it is why most of them hire qualified personnel so as to utilize management accounting practice for assisting the management in making appropriate decisions which are very unlikely to happen in the case of small and medium companies (Porter & Norton, 2014). Therefore, the appointment of qualified accounting personnel plays an important aspect in implementing substantial management measures of accounting.

Hence, it is quite understood from the aforesaid discussion that the significance of both balanced scorecard approach and MAP are globally accepted in the corporate world for the purpose of measuring performance. The loopholes in traditional cost accounting can be significantly reduced by adopting a balanced scorecard approach that allows the management to frame measures keeping their strength and weaknesses in mind (Lawrie et. al, 2016).

The implementation of the MAP has allowed huge benefits for the larger enterprises and small or considerable benefits for the SMEs.

Qantas’s Critical Success Factors

The performance of an organization can be ascertained by means of its critical success factors. These factors portray the organization, performance measures and its performance as a whole. The critical success factors of Qantas airlines are discussed below-

Route- Qantas is at present operating in more than 120 countries and is connected to at least 186 destinations including Australia as well. The route opted by the airlines plays a very vital role in determining the efficacy of its performance and is one of the most critical success factors because of the fact that where it should fly and the number of times it should reach the destination in a given period of time.

Strong management- Qantas has a very strong grip on its management. Qantas’s management is strong and profound in its duties as seen with the quality of services it provides to its passengers. Qantas preaches its passengers and makes it a point to deliver them the best of services. For the purpose of providing premium services to its passengers, the employees of Qantas are given proper training in hospitality (Qantas, 2017).

Non-stop flights- Qantas provides more non-stop flights over layoff flights. The service of having non-stop flights makes Qantas one of the desirable airlines amongst all its arch rivals. Non-stop flight does not just reduce the traveling time but also saves the passengers from the harassment of waiting for another flight so as to reach their destination.

Competent workforce – It is one of the significant success factors of Qantas. It is rightly said that Qantas has an excellent and highly competent workforce. The personnel is hostile and well trained. Qantas imparts its staff training regularly so as to enhance their skills and competency. Their hospitality is beyond comparison. The employees are well qualified and competent in their hospitality. The employees possess profound communication skills.

Cost utilization- Qantas focuses on managing its cost and on the price which is why the airline is a success in today’s scenario. Competitive pricing is an important factor for denoting the success of a corporate and it is high time for organizations to incorporate the same.

Flight services and promotions– It is very substantial for airlines to focus on such passengers who are regularly flying with them or in other words are loyal to their brand so as to yield revenues. The services that can be provided to such regular passengers might be the preference of seat choice while booking tickets, aircraft type, easy ticket booking, etc. Such flight services and promotions provided by Qatar to its loyal passengers makes it the best and most desirable amongst all its competitors.

The key performance indicators of Qantas are discussed below-

Consumer satisfaction- It is one of the most important indicators of success. Higher the customer satisfaction higher will be the chances of success. Customer satisfaction is the KPI at Qantas. Qantas has always prioritized customer satisfaction by offering the best of its services and hospitality. This has allowed that company to surpass its competitors and make huge profits and building its reputation over the years of its operations (Qantas, 2017).

Brand reputation- Qantas has become a reputed brand by providing best quality services and hospitality to its passengers. The Qantas airlines are flexible in its pattern when it comes to catering to the consumer needs and managing the reputation of the brand in the eyes of the customers.

With the help of social media nowadays it has become really easy for brands to reach its customers. If used in a legitimate manner social media can bring infinite benefits. With the help of social media, Qantas has been able to flourish its business in such a short time (Qantas, 2017).

The management that takes care of assessing and evaluating the data at Qantas is a strong and profound one.  It assists in tracking the company’s performance. The Knowledge management system of the company is designed and constructed in a way so as to ascertain the levels of the indicator in order to help the company to know more about its potential. An organization is less likely to know about itself and its potential in the absence of Knowledge management system (Petty et. al, 2012). Internal discipline, process, and other strategies are the sources through which Qantas derives its knowledge management system.

                                                                 

                                                                                                             

References

Petty, J. W, Titman, S., Keown, A. J., Martin, J. D., Burrow, M. and Nguyen, H. (2012) Financial Management: Principles and Applications, 6th ed. Australia: Pearson Education Australia.

Porter, G. and  Norton, C. (2014) Financial Accounting: The Impact on Decision Maker. Texas: Cengage Learning

Ross, S., Christensen, M., Drew, M., Bianchi, R., Westerfield, R. And Jordan, B.(2014)

Fundamentals of Corporate Finance, 7th ed. North Ryde: McGraw-Hill Australia Pty Ltd.

Vaitilingam, R. (2014) The Financial Times Guide to Using the Financial Pages. London: FT Prentice Hall.

Larry M. W & Christopher J. S. (2012) Managerial and Cost Accounting. Pearson Press

Needles, S. C. (2011) Managerial Accounting.  USA: South-Western Cengage Learning .

Parrino, R,  Kidwell, D. & Bates, T. (2012) Fundamentals of corporate finance. Hoboken

Venanci, D. (2012) Financial Performance Measures and Value Creation.  State of art . New York: Springer.

Qantas. (2017). Qantas 2017 annual report & accounts. Available from: https://www.qantasnewsroom.com.au/media-releases/qantas-group-full-year-2017-financial-result/ [Accessed 10 September 2018]

Rompho, N. (2011) Why the Balanced Scorecard Fails in SMEs: A Case Study. International Journal of Business and Management. [online]. 6 (11), p. 39–46. Available from: https://www.ccsenet.org/journal/index.php/ijbm/article/view/10247 [Accessed 10 September 2018]

Shim, J. K & Siegel, J G. (2009) Modern Cost Management and Analysis. Barron's Education Series

Larry M. W & Christopher J. S. (2012) Managerial and Cost Accounting. Pearson Press

Lawrie, G.V., Abdullah, N.A., Bragg, C. and Varlet, G. (2016) Multi-level strategic alignment within a complex organisation. Journal of Modelling in Management. [online]. 11 (4): p. 889–910.DOI: doi:10.1108/JM2-11-2014-0085.

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