Performance, Control, SWOT, SBU, and Benchmarking

Performance

• The success of a task or operation is measured by performance.

Control

• Control ensures an entity's activities align with its plan and objectives.

SWOT Analysis

• SWOT analysis assesses an organization's internal Strengths and Weaknesses and external Opportunities and Threats.
• This assessment establishes the organization's condition before long-term plans are made.

Strategic Business Unit (SBU)

• An SBU is a part of an organization serving a distinct market or niche.

Cost Leadership

• Cost leadership is a characteristic of a firm with the lowest cost structure in its industry.

Niche (Focus)

• A niche is a segment of the broader market suitable for a specialized product, addressing specific needs.

Benchmarking

• Benchmarking is used in management, especially strategic management.
• During benchmarking organizations evaluate their processes against best practices, typically within their sector.
• Benchmarking helps organizations create plans to adopt best practices and improve performance.

Critical Success Factor (CSF)

• A CSF is vital to an organization's future success.
• CSFs can evolve and include product quality, employee attitudes, manufacturing flexibility, and brand awareness.
• CSFs are product features highly valued by customers, requiring organizations to excel to outperform competitors (Johnson, Scholes & Whittington).

Rolling Budget

• A rolling budget is continuously updated.
• It maintains a constant budget horizon, usually one year.
• At the end of each month or quarter, another month or quarter gets added.

Variances

• Variances represent the differences between actual and standard prices and quantities.

Variance Analysis

• Variance analysis involves calculating and interpreting variances.

Planning Variance

• It arises when an original budget is revised using hindsight ("after the fact").

Operational Variance

• It arises when actual performance deviates from a revised standard.

Business Process

• A business process is a set of connected activities transforming inputs to create an output.
• Ideally, the transformation adds value to the input and creates an output.
• The transformed output should be more effective to the recipient (Johansson et al.).

Business Process Re-engineering

• It involves fundamentally rethinking and redesigning business processes to achieve significant improvements.
• The improvements are for critical performance measures, including cost, quality, service, and speed (Hammer and Champy).

Business Automation

• Business automation uses computerized methods to accelerate existing tasks.

Business Rationalization

• It streamlines operating procedures to eliminate inefficiencies.

Business Integration

• Business integration views an organization as a connected group of business processes.
• This approach focuses on adding value to the customer, rather than seeing the company as separate departments.

Stakeholder

• A stakeholder is anyone affected by or with an interest in an organization.

Corporate Behavior

• Corporate behaviour refers to how a company acts as a single entity.

Environmental Management Accounting (EMA)

• EMA involves identifying, collecting, analyzing, and using two types of information for internal decision-making:
  • Physical information on energy, water, and materials use, flow, and rates, including waste.
  • Monetary information on environment-related costs, earnings, and savings.

Enterprise Resource Planning (ERP) System

• An ERP system integrates software applications to provide a seamless information flow across an organization.
• It achieves this by utilizing a shared database.

Lean

• Lean is a principle focused on delivering the right things, at the right time, in the right quality.
• It aims to achieve perfect workflow, minimize waste, and maintain flexibility.

Contingency Theory of Management Accounting

• No single accounting system is universally applicable to all organizations.
• Instead, aspects of an accounting system can be matched to defined circumstances.

Unified Corporate Database

• It is a multi-dimensional, multi-layered database.
• Which stores information from all functions in a single location
• Instead of multiple applications or separate databases.

Process Automation

• Process automation uses technology to automate business processes.
• It allows tasks to transition sequentially with minimal human intervention.

Internet of Things

• The Internet of Things is a network of web-enabled devices (e.g., phones, electronics, sensors).
• These facilitates data transfer without human intervention.

Cloud Technology

• Cloud technology is technologies that enable IT to add capabilities as needed eliminating the need to buy equipment and software, train employees, use office space, power and cooling to house it.

Artificial Intelligence

• Artificial Intelligence involves machines that can copy human cognitive functions.
• These functions include learning and problem-solving.

Organizational Knowledge

• Organizational knowledge is the collective, shared experience across an organization built on existing procedures (Johnson, Scholes and Whittington).

Customer Relationship Management (CRM)

• CRM comprises practices, strategies, and technologies.
• CRM is used to manage customer interactions and data, enhance service, retain customers, & boost sales.

Data Warehouse

• A data warehouse is a central database used for reporting and analysis.
• It stores historical data collected from operational and external systems.

Big Data

• Big data refers to extremely large data sets analyzed to reveal patterns, trends, especially relating to human behavior.

Drill-Down Facility

• The drill-down facility is an interactive feature enabling users to see detailed information on items or data.

Data Visualization

• Data visualization graphically represents data.
• To convey insights to clients and stakeholders, especially with large datasets.

Misrepresentation

• Misrepresentation involves inaccurate or misleading reporting.
• It is done to suggest that a performance measure is acceptable.

Integrated Report

• An integrated report communicates an organization's strategy, governance, performance, and prospects.
• This communication occurs within the context of external environment.
• It demonstrates value creation over the short, medium, and long term (The International Integrated Reporting Council).

Target Costing

• Target costing sets a target cost price by subtracting a desired profit margin from a competitive market price.

Residual Income

• Residual income is pre-tax profit less imputed interest charge for capital invested.

Transfer Price

• A transfer price is the price for goods or services transferred between divisions of a company or between subsidiaries.

Arm's Length Principle

• The arm's length principle requires transactions to be valued as if conducted by unrelated parties acting in their best interest.

Brand Awareness

• Brand awareness is the extent to which customers can recognize and recall a brand.

Total Quality Management (TQM)

• TQM is Continuous improvement involving everyone in the organization to improve performance at every level.

External Failure Costs

• External failure costs are from inadequate quality found after transfer of ownership from supplier to purchaser.
• This happens after delivery to the customer.

Appraisal Costs

• Appraisal costs are incurred ensuring output meets quality standards.

Prevention Costs

• Prevention costs prevent defective or substandard products or services from being produced.
• Therefore, these are incurred before or during production.

Just-in-Time (JIT) Manufacturing

• JIT aims to produce required items at the required quality and quantities, when they are needed which is a manufacturing production method.

Human Resource Management

• Human Resource Management is a strategic approach to leverage employee capabilities and achieve competitive advantage (Bratton and Gold).

Reward Scheme

• A reward scheme includes all payments (monetary, non-monetary, psychological) an organization provides for its employees, in exchange for their work (Bratton).

Objective

• An objective is a specific, measurable statement to achieve goals within a defined time frame.

Key Performance Measure (KPI)

• A KPI quantitatively or qualitatively characterizes performance.
• Used to evaluate progress toward an objective.

Activity-Based Management

• Activity-based management views a business as a set of linked activities that add value to the customer.
• It focuses on how the business is managed relating to the activities that make up the organization (Colin Drury).
• It involves actions taken on better-informed basis using ABC information, aiming for the same output with lower costs.

Joint Venture

• It is a business arrangement where parties pool resources for a specific activity or project.
• The most common structure is a separate business entity like a partnership or company.

Strategic Alliance

• It's an arrangement where organizations undertake a mutually beneficial project.
• But each organization remains independent.

Internal Failure Costs

• Internal failure costs come from inadequate quality found before transfer of ownership from supplier to purchaser.
• Example of the above is issues discovered before delivery to the customer

Risk Appetite

• Risk appetite defines the amount and type of risk an organization will pursue or retain.

Return on Investment (ROI)

• Return on Investment is the profit or gain on an activity over a period, relative to the amount invested.

Fiscal Policy

• Fiscal policy involves government use of spending and taxation to influence the economy.

Aggregate Demand

• Aggregate demand is the total demand for goods and services in an economy.

Monetary Policy

• Monetary policy involves measures the monetary authority used to adjust the money supply in the economy.

Beyond Budgeting

• Beyond Budgeting it is a set of guiding principles enabling an organization to manage its performance.
• With this method an organization can decentralize decision-making without traditional budgets.

Stretch Goal

• A stretch goal requires an organization or person to stretch themselves to the limits.

Management Information System

• A Management Information System reports on organizational performance.
• It helps middle management monitor and control the business.

Electronic Data Exchange (EDI)

• It allows data transfer between processes, using a common language like XML.

Data Silo

• Data silo is data held by one group in an organization but not easily accessible by other groups.

Batch Processing

• Batch processing performs operations on a data set.
• It processes multiple transactions in a single operation, typically without intervention.

Real-Time Processing

• Real-time processing involves operating on data or transactions immediately upon receipt.
• The process is usually automated, with minimal delay.

Data Mining

• Data mining discovers useful patterns/relationships in large data volumes.
• Combining tools from statistics, AI, and database management.
• To analyze digital collections (data sets).

Tacit Knowledge

• Tacit knowledge is personal and gathered through experience, intuition, and emotions.
• The process is highly specialized in the individual making it difficult to explain.

Explicit Knowledge

• Explicit knowledge is base form knowledge that is codified and transferred into a medium (e.g., documents, videos).

Data Governance

• Data governance specifies decision rights and accountability, ensuring appropiate data controls (Gartner Information Glossary).

Data Protection

• it safeguards from compromise or loss
• It restores data to a functional state (if needed)

Data Privacy

• Data privacy concerns proper handling of sensitive data (protection from data).

Data Security

• Data security protects digital information from unauthorized access, corruption, or theft throughout its lifecycle (IBM).

Operational Gearing

• Operational Gearing which is the ratio of fixed costs to variable costs.
• A higher proportion of fixed costs results a higher operational gearing.

Critical Success Factor (CSF)

• A Critical Success Factor is an outcome to achieve the objective.

Machine Learning

• Machine learning is AI where systems analyze data sets/find relationships/trends This is used to make predictions

Black Box Algorithms

• Black box algorithms are when machines with AI make decisions and humans do not always know the algorithms or their reasoning.