Decision making across the business cycle
A CIMA case study

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Page 1: Introduction

CIMA, the Chartered Institute of Management Accountants, is the world’s leading body for management accountants. Management accountants can provide management information and insights as well as financial data to help managers make decisions.

However, CIMA qualifications are not just for professional accountants. CIMA members may work across any part of an organisation, not just in finance. CIMA training helps any worker to develop quantitative, analytical and strategic thinking and build business and management skills. These include:

  • performance management – analysing data for use in business decision making
  • cost leadership – applying accounting techniques to plan and budget as well as formulating business strategy to create wealth and shareholder value
  • project management – identifying and managing the risks of certain actions and communicating appropriate information across the organisation.

CIMA has 183,000 members and students in 168 countries with many holding senior positions in businesses around the cima-sarahyoungworld. However, CIMA qualifications are accessible to a wide range of people. There is no need to have a degree to start CIMA studies - you can take up studying whilst in work or after leaving school. The CIMA Certificate in Business Accounting provides a solid grounding in the basics of management accounting, business and finance, preparing members to progress to the professional qualification.

Management accountants

Management accountants are playing important roles during the difficult times which the UK economy has been experiencing. Between 2008 and 2009 there was a fall in production and consumer spending. Economic performance has continued to be poor. During these hard times it is essential to have a good understanding of how to make important decisions to get the economy growing.

Research has shown that the organisations with the best prospects of emerging successfully from a recession are those which balance cutting costs to improve operating efficiency with continuing to invest in developing their competitive position. This means understanding what drives revenue, cost and risk across the organisation’s value chain.  Financial measures alone cannot describe this adequately. To ensure the sustainability of a business, delivering financial results has to be balanced with other qualitative measures of performance.

Strategic decision making is a key role of managers. Strategic decisionshave long-term and company-wide impacts, so businesses must respond to changes in the environment in which they operate. Contingency planningcan allow firms to deal with unexpected events. Management accountants are skilled in these areas and are able to advise decision makers on how to maintain financial control and stability. They have a vital role to play in ensuring firms remain competitive, even during difficult times.

The case study illustrates how management accountants support business decision making during all the stages of the business cycle.

Chartered Institute of Management Accountants | Decision making across the business cycle