Question

Describe how GoGo Air’s management team might use strategic management accounting techniques to make financial decisions about the future of the company.

Answer 1

GoGo Air’s management team might use strategic management accounting to review the costs associated with these activities to ensure the company does not lose its relative cost position. strategic management accounting as the provision of information to support the strategic decisions in the organisations. Strategic decisions usually involve the longer term, have a significant effect on the organisation and, although they may have an internal element, they also have an external element.

Strategic financial management means not only managing a company's finances but managing them with the intention to succeed—that is, to attain the company's goals and objectives and maximize shareholder value over time.

Strategic management accounting (SMA) techniques and the main factors affecting In order to achieve such an understanding, we apply a quantitative approach, rooted in contingency theory, including descriptive statistics, correlation analysis and regression analysis. The most intensively-used SMA techniques are strategic planning and budgeting, customer accounting, and target costing. The least-used are integrated performance measurement systems, strategic pricing and activity-based costing. Our respondents indicated that they expect an increase in the use of all SMA techniques over the next 3 years. Regression analysis confirms that the implementation of differentiation strategy (as opposed to cost leadership strategy) has a statistically significant and positive influence on SMA use. The findings of this study contribute to the better theoretical understanding of the contingent factors influencing the use of SMA techniques.