Page 19 - APM Integrated Workbook STUDENT S18-J19

Introduction to strategic management accounting
CSFs can be classified in a number of ways:
Monitoring CSFs
 Scrutinise current situation.
 For example, performance
achieves budget.
Building CSFs
 Look into the future.
 For example, developing new,
innovative products.
Five sources of CSFs:
Industry structure
Competitive strategy,
industry position,
geographic location
Environmental factors
Temporary factors
Functional managerial
position
Internal CSFs
 Issues within manager’s control.
 For example, inventory control.
External CSFs
 Issues outside of manager’s
control.
 For example, material prices.
For example, new product development in the
food manufacturing industry may be vital.
For example, a competitive strategy of
differentiation may drive a CSF based on
quality.
For example, an increase in fuel costs may
influence CSFs.
For example, contamination issues in a food
product may drive a short term CSF.
Production managers may be concerned with
product quality and cost control.
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