Developing ethical business strategies
A CIMA case study

Page 3: Strategic planning

Cima 18 Image 4 Planning is a vital tool to aid strategic decision making. Good planning enables businesses to put together more accurate forecasts for the future direction of the business. Management accountants play a key role here by identifying and assessing risks. In particular, they look at the probability of other events taking place that could help or hinder the business. Risks can be identified within the business, called the internal environment. For example, the culture of an organisation could have an impact on business strategies. Risks can also be identified in the external environment. For example, the current pessimistic economic climate will have major implications for a business. A business needs to monitor both to see how changes might affect its plans.

Cima 18 Diagram 2 A common method used to review changes in the internal and external environment is a SWOT analysis. SWOT looks at the internal strengths and weaknesses of an organisation and at its external opportunities and threats. The SWOT analysis is used to show the results of an audit of internal and external factors. Managers then analyse the findings to set and improve business strategies.

Sustainable growth

Management accountants look at this data and balance short and long-term plans and goals to ensure sustainable growth. Organisations that have the best prospects of emerging with success from a recession are those that manage to cut costs and improve efficiency whilst still investing in the future. As part of this process, they must also consider the ethical impact of any strategic decisions they make. This is a delicate balancing act, but one for which CIMA management accountants are trained and thrive upon.

Cima 18 Image 14 Rob Johnson is a CIMA member. He works as a strategic planning manager at EE, overseeing EE’s five year plan. He chose the CIMA qualification because of ‘the importance it places on financial skills, while also placing emphasis on strategy along with its strong commercial focus’. His role specifically involves identifying risks and opportunities. He then uses both financial and non-financial data to make business plans to minimise risk and exploit the opportunities identified.

Chartered Institute of Management Accountants | Developing ethical business strategies

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