ACCOUNTING FOR STRATEGIC & MANAGEMENT CONTROL'S [CASE STUDY] Case Study

ACCOUNTING FOR STRATEGIC & MANAGEMENT CONTROLS - Case Study modellingStrategic management accounting incorporates the concept of strategic management, the elements of management planning, implementing and controlling, and the use of financial information to aid sustainable decision making (Ramljak & Rogosic, 2012, p. 56).Based on the above definitions of strategic management accounting, after the acquisition of the Boutique Hotel by Ave-Co, the 14 Hotels were divided into three regions headed by regional managers. First, each manager had an autonomous management authority over a region. Therefore, decisions such as price determination were done without prior consultation with the parent company. To some extent, the authority assumption to the respective regional managers contributed to the decline in financial performance of the Boutique Hotel. The reason is the regional managers, by acting independently, could lose sight of the overall object glass of the company (Ma & Tayles , 2009, p. 473-480).Second, every manager should answer to another higher authority. This helps keep the managers interests and actions in line with the overall objectives of the company. The regional managers of Boutique Hotel were acting independently, thus were under no pressure to improve the financial performance of the organization. Therefore, the mentioned reason, partly led to the decline in the financial performance of the organization (Ramljak & Rogosic, 2012, p. 94-97).The two points discussed above were come to with the control issues in the organization. Next in line are issues concerning the Ave-Cos finance department. The financial department of the parent company had the dual responsibility of help both the parent company and the Hotel. However, there was little interaction between the Hotel managers and the finance department, which inhibited the sharing of financial information. Consequently, effective financial analysis and the death penalty