Improving strategic decision making
A CIMA case study

Page 1: Introduction

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Financial accountants keep records of business transactions such as sales invoices. They use these records to prepare a firm's accounting statements. Management accountants evaluate and interpret this financial data to advise the senior managers in the business. They play important roles in managing business performance and improving decision making. CIMA is the leading and largest professional...
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Page 2: The decision making process

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Effective strategic business decisions bring together the right resources for the right markets at the right time. Timing is crucial. For example, Tesco developed its online ordering and delivery service as internet shopping expanded. Virgin sold off its music stores as downloading music became more popular. The quality of a company's decision making helps it gain an advantage over competitors...
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Page 3: Levels of decision making

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Decisions are made at different levels in an organisation's hierarchy: Strategic decisions are long-term in their impact. They affect and shape the direction of the whole business. They are generally made by senior managers. The managers of the bakery need to take a strategic decision about whether to remain in the cafe business. Long-term forecasts of business turnover set against likely...
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Page 4: Analysing accounts

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In practice the work of a management accountant is rather like that of a detective. The task is to sift through evidence and to extract meaningful messages that will help managers make effective business decisions. The starting point is often the basic accounting documents that record the progress of any business. There are two key documents: the income statement is an aggregated record of...
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Page 5: Performance indicators

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Key performance indicators (KPIs) are an important management tool and help to monitor the achievement and progress towards targets. A well-made set of KPIs or metrics enables a business to know if it is on the right track. Data used in this way can improve efficiency ('doing things right') and effectiveness ('doing the right things'). As management accountants are familiar with the strategy...
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Page 6: Conclusion

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CIMA is the employers' choice when recruiting financially qualified business leaders. As CIMA members are management accountants they have broad-ranging business and management skills to complement their financial training. They are able to offer strategic and practical advice, manage risk and make and support key decisions at all stages of the decision making process. For example, at the...
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