This website uses cookies to ensure you have the best experience. Learn more

Use Of Performance Indicators In Management Accounting

2863 words - 11 pages

A) What constitutes performance indicators?Performance Indicators are usually seen as measures of success for either a particular project or to the functioning of the organisation as a whole. These indicators are often established at the start of the project and then are used throughout the lifecycle to continuously assess performance and results.They are often linked in to expected, quantifiable results, such as increased yearly turnovers or reduced costs associated with the manufacturing of a particular product. These results are often then subdivided into manageable, incremental benchmarks which help in the process of identifying and interpreting the results which we get in return for these indicators. A typical key performance indicator for example for a car manufacturer might be, for example, an increase in inventory turnover of nine to twelve units per year, constituting a performance indicator which has set goals of greater productivity .Schools of thought on management accounting class performance indicators as being able to be placed into 6 distinct groups which are :competitive advantage, financial performance, flexibility, resource utilisation, quality of service, innovation . The first two of competitive advantage and Financial performance are seen as the "ends" or rather the results to see if the measures used are effective or not. The other four are seen as a "means" as to which the first two can be achieved. When putting into action these indicators , an organisation whether in manufacturing , service or even charity must be careful so as to that the implementation of one will not be of detriment to the others, that is that one goal will not be a barrier stopping one of the others from attaining success. The mix chosen by each company will be different and in some cases the motives of one P.I will almost certainly sometime come into conflict with those of another. However with the size and complexity of the organisations of today it is narrow minded to think that only one P.I can be put into use at any one time. The usage of the indicators is as such: The organisation must identify which ones it wishes to use in the light of the current competitive environment and as to which its strategic intentions adhere to. For example if it wishes a competitive advantage over the others in the market it must ascertain as to how its strategy is to be fulfilled via use of the four determinant indicators. To clarify matters, if technical leadership and product innovation are to be the key source of a manufacturing company's competitive advantage, then it should be measuring its performance in this area relative to its competitors. If a service providing organisation wishes to gain a competitive advantage over the others it may decide it wishes to use quality of service and flexibility in order to attain its goals.Once performance indicators are put in use by an organisation they are not just to be left unmonitored, the whole purpose of their...

Find Another Essay On Use of performance indicators in Management Accounting

The Use of Information Technology in Accounting

3368 words - 13 pages rendering accounts function and company management function are two of the main functions of an accounting system (Knežević, Stanković, & Tepavac, 2012). The rendering accounts function falls under financial accounting, while the company management function would be primarily looked at in the managerial accountanting realm. The following list ranks United States accouting professionals top ten priorities in IT initiatives. 1. Managing and retaining

The Use of Performance Enhancing Drugs in Sports

1338 words - 5 pages The Use of Performance Enhancing Drugs in Sports Is the use of performance-enhancing drugs in sports dangerous? To what degree do these drugs really enhance strength, size, training ability, and muscular performance? Not only are the answers to these questions still unclear, they are the subjects of deep controversy. In order to understand why we are confronted with the problem of performance-enhancing drug use in athletics today, we

Code of Ethics in Management Accounting and Financial Management

516 words - 2 pages that are clear, revenant, and accurate information. Secondly practitioners of management accounting and financial management must maintain the highest level of confidentiality. One must not disclose confidential information to anyone in any shape or form unless obligated to do so by law. One must inform the appropriate people when dealing with confidential matters and the monitor the progression of information. Also one must not use or appear

Implications of Performance Management

1240 words - 5 pages Implications of Performance Management Performance management is a continuous process that creates a working culture to encourage employees to improve their work performance and reach their full potential during their stay of employment. Performance Management also provides strategic direction, develop competency in employees and instill organization value. This paper will identify methods and affects that performance

Overview of Performance Management

2593 words - 10 pages Performance Management: An ongoing communication process that involves both the performance manager and the employee in:* identifying and describing essential job functions and relating them to the mission and goals of the organization* developing realistic and appropriate performance standards* giving and receiving feedback about performance* writing and communicating constructive performance appraisals* planning education and development

Use of Project Management Software in Business

1278 words - 5 pages Use of Project Management Software in Business Project Management is using the concepts of information technology in businesses to meet the requirements of a particular project. It depends on the process it needs to take to implement a project. The application of knowledge, skills, and tools and techniques is needed ( There are 3 main phases of project management, they are planning, scheduling and

Use of Transactional Theories in Management

1156 words - 5 pages “Management is about arranging and telling. Leadership is about nurturing and enhancing.” -Tom Peters Manager and Leader are the most commonly used words but are very rarely defined. By understanding the actual difference in meaning of these terms you can know when to manage and when to lead. Here Tom Peters says that, the managers are the ones who do the arrangement, like setting objectives. He has to set goals for the group and decide

Use of Information Technology in Operation Management

1764 words - 7 pages TABLE OF CONTENTS Introduction Analysis Conclusion Reference Introduction This report is to write about how Operation Management is employing more and more information technology, and in general this is being done to improve how organisations respond to the five objectives of Operations such as speed, flexibility, dependability, quality and costs. In this assignment, there will be an analysis of the technology available in different

Differences Between Individuals Will Always Occur In Work Organisation. Ideally, Good Management Practice Should Use Performance Appraisal Information In Ways That Will Promote Equality Amongst...

734 words - 3 pages affects our perceptions of performance in other area.Recency error "žo"žo most recent behaviour and performance is more readily remembered than those occurred sometime ago.Stereotyping "žo"žo seeing all persons in the same way.Appraisal System tends to fall into four categories, comparative standards, absolute standards, management by objectives or results approaches and direct or objective indexes. For comparative standard, it

Evaluation of the Role of Management in Improving Business Performance

4595 words - 18 pages Evaluation of the Role of Management in Improving Business Performance What Management is Management relates to the implementation of decisions and actions through means by which individuals set and fulfill an organization's targets through several factors. These elements take into consideration human, technical and financial resources which are reliant upon their respective environment. In other words

The Importance of Performance Management

2156 words - 9 pages thoughtful feedback to employees, that it is a critical part of being a manager and should be a continue process that is not just something you do annually as part of a performance appraisal. In my opinion, performance management is one of the most important aspects of being leader in an organization. The Negative Impacts of Poor Performance Management When I took over as director of our global support services organization, I was getting to know the

Similar Essays

Use Of Computers In Accounting Essay

950 words - 4 pages Use of Computers in Accounting Introduction Computers play an important part in the recording of finical information. There care many accounting packages available, and so many businesses are able to use computerised accounting system. One of the most important factors of computerised accounting system is that it provides the same functions as a manual accounting system. Main body Most business use

Management Or Control? The Use Of Performance Measurement In The Public Sector

3516 words - 14 pages IntroductionThis report considers performance measurement as applied to the public sector as part of the new public management agenda. Key to the discussion is the selection and use of performance indicators. The paper attempts to set out the principles of performance measurement, offer explanations of why public sector performance is measured, as well as looking at different approaches. Some problems are identified and finally using a local

Use Of Performance Enhancing Drugs In Sports

1981 words - 8 pages The use of performance enhancing drugs in sports (doping) is done to improve athletic performance. Doping in sports has become a highly controversial topic among professional sporting venues and in the media. With the increased pressure to perform, high priced contracts, increased competition, and advanced training methods today’s athletes will try to gain an edge by any means necessary. Performance enhancing drugs used by athletes today include

Use Of Performance Enhancing Drugs In Sports

1173 words - 5 pages Is the use of performance-enhancing drugs in sports dangerous? To what degree do these drugs truly enhance strength, size, training ability, and muscular performance? Not only are the answers to these questions still unclear, they are the subjects of deep controversy. This paper will examine those two major issues, first dealing with steroids and their effect on athletic performance and attitude then dealing with various effects that drugs have