The business organizations are needed to take into consideration some specific aspect for enhancing the overall performance of their business and Value Chain Analysis can be considered as one of them. Value chain can be considered as a set of activities performed by the companies in a specific industry for delivering a valuable product to the customers and to add value to the provided services to the customers (Darmawan, Putra and Wiguna 2014). In simplified words, value chain helps the companies in adding values to their customers and other stakeholders. There is a relation between the value chain of the companies with strategic management and strategic management accounting as the companies can improve the performance of their value chain with the help of various strategic management tools. At the same time, organizations and industries also have impact on the value chain of the companies (de Souza and Márcio de Almeida 2013). The main aim of this report is the analysis and evaluation of various components of value chain by considering the aspects of strategic management accounting. More specifically, this report involves in providing advices to Ansell Strategic with the aim to achieve the objectives for improving the value chain.
1. Enhancement of Value Chain with Various Strategic Management Tools
The earlier discussion has mentioned the fact that the companies can enhance their value chain with the assistance of various strategic management tools and this aspect is also applicable for Ansell Strategic. The following discussion provides the description of certain strategic management tools to enhance the value chain of Ansell Strategic:
Michael Porter’s ‘Value Chain’: Michael Porter was the inventor of this particular strategic management tool. Under this value chain analysis, the representation of a set of activities can be seen performed by the companies with the aim to link them to the competitive position of the businesses in order to deliver valuable products and services to the end customers.
Figure 1: Porter’s Value Chain Model
(Source: Mohajeri et al. 2014)
The presence of this set of activities can be seen in within and around of companies and for this reason, strong relation can be seen to analyze and link them in order to identify the competitive advantage of the companies. With the help of this strategic management tool, Ansell Strategic can enhance their value chain of each particular activity for adding values to the products and services (Markides 2013). The more value Ansell Strategic can create in their value chain, the more willingly customers of the company are for paying for the services of the company.
SWOT Analysis: It is considered as a major strategic management tool that can enhance the value chain of the companies. SWOT stands for strengths, weaknesses, opportunities and threats. SWOT analysis is regarded as a crucial tool of strategic management that the business organizations use to identify their strengths and weaknesses; and the opportunities and threats from them (Hill, Jones and Schilling 2014). This particular tool involves in the identification of the activities that can lead in value adding to the products and services along with the unproductive or weak activities. Thus, with the aim of this particle tool, Ansell Strategic can enhance their value chain and it will ultimately lead to the improvement of performance of their businesses. Apart from this, Ansell Strategic will also be able in spotting the opportunities and weaknesses in their value chain (Hill, Jones and Schilling 2014). Hence, it can be said on the overall basis that SWOT analysis can enhance the value chain of Ansell Strategic.
Gap Analysis: Gap analysis is considered as another important strategic management tool that helps the business organizations in identifying the current position of the business in the industry or market. It also helps the companies in the analysis of their progress towards the achievement of the strategic goals (Morden 2016). More elaborately, the application of gap analysis assists the companies in measuring the difference between the goals of the companies and their current position in achieving them. It needs to be mentioned that Ansell Strategic can use the tool of gap analysis to improve their value chain as it will show their current progress in terms to achieve the targets related to add value to their products and services (Morden 2016). With the help of gap analysis, Ansell Strategic will be able in improving the performance of their business activities.
2. Techniques to Develop, Implement and Monitor Strategies
At the time to develop, implement and monitor the business strategies, it is needed for the business organizations to consider certain steps; and they are applicable for Ansell Strategic. The examination and application of these steps are discussed below:
Step 1: At the time of the development of the strategies, Ansell Strategic is needed to designate the employees to be accountable for achieving the objectives and activities. The company is required to set the goals and objectives that need to be achieved with the strategies. In the strategy development process, Ansell Strategic needs to consider what they are expecting from the employees and staffs related to the strategy (Parmenter 2015). In addition, they are needed to consider the aspects of communication required for the development of the strategy along with the results that will be derived from the development and implementation of the strategies.
Step 2: In this particular step or phase, it is needed for Ansell Strategic to address the critical issues based on the priority by developing strategies to resolve them. At the same time, there is a need to review of the action plans so that necessary enhancements can be brought. Most impotently, Ansell Strategic is needed to ensure certain aspect like relation of realistic as well as measurable objectives with the strategies, designation of responsible individuals for the lead roles, inclusion of the appropriate people in the strategies, setting of realistic timeline and the presence of the required resources (Powell et al. 2015).
Step 3: After the development of the strategies, the strategy development committee or the strategy implementation strategy will involve in their review with the aim to identify the opportunities to coordinate and combine the required resources (Bryson 2018). The need for Ansell Strategic is to look for opportunities for collaborating as well as clarifying the role of the committee. In addition, the management of Ansell Strategic needs to ensure regular contact with the implementation team with the aim to ensure that all the implementation activities are on track.
Step 4: After the above step, it is needed for Ansell Strategic to involve in the evaluation of the implemented strategies with the aim to assess the extent of the accomplishment of the goals and objectives. Ansell Strategic can do this by simply tracking the activities as well as progress towards achieving the goals and objectives. In the presence of these steps, Ansell Strategic will be able in assessing the fact that whether they have been successful in achieving the goals and objectives (Dhaliwal et al. 2014).
Step 5: In this last step, the requirement for Ansell Strategic is to make the necessary corrections as per the results of the evaluation of the strategies. In this phrase, the main aim of Ansell Strategic will be to spot any kind of inefficiencies in the business activities. In case the company find any loophole or inefficiency in the process, the need for the management is to take the corrective measures with the aim to eradicate those efficiencies from the strategies. Thus, Ansell Strategic needs to follow all these steps in the process to develop, implement and monitor strategies (Powell et al. 2015).
3. a. Strategic Management Cycle
It needs to be mentioned that there are four major elements of the strategic management cycle and they can be seen in the following figure:
Figure 2: Strategic Management Cycle
(Source: Rothaermel 2015)
Strategy Formulation: This stage involve in identifying the organizational objective that needs to be achieved through the strategies. In this stage, managements of the companies analyze what the competitors are doing with the aim to respond. Brainstorming is considered as a major aspect in this stage as the managements of the companies use to gather ideas from different employees and staffs of the companies with the aim to develop strategies (Eden and Ackermann 2013).
Planning: This stage involves in specifying the broad aims into action plans for the ease of the organizational employee and staffs. More specifically, the planning process involves in translating the top level strategies into the actionable activities for the purpose of implementation. Many business organizations opt for SMART target for the purpose of activity planning. In this stage, strategies began to become reality (Ginter, Duncan and Swayne 2018).
Implementation: Enactment of the strategies can be seen in the stage of implementation. This stage in strategic management cycle involves in the use of the action plans and it leads to the happening of the real works. The aim of this stage is to solve the real world business problems. This step requires the adaptation as well as modifications of certain plans (Alkhafaji and Nelson 2013).
Review: This particular step helps the managements of the companies in assessing their actual position and where they want to be. This stage involves in the identification of the strong as well as weak areas of the strategies with the aim to take corrective measures. This stage provides the managements with the scope to bring continuous improvements in the implemented strategies for the businesses (Simon, Fischbach and Schoder 2014).
3. b. Leadership Role of Professional Accountants in Strategic Management
Leadership role of the professional accountants involves that the professional accountants always respond to the contiguously changing expectations of the companies, societies and financial markets. It indicates towards various roles of the professional accountants like leadership in management, operations, management control and stakeholders and accounting communication (Goretzki, Strauss and Weber 2013). Many instances can be seen where the accounting professionals have aspired to the roles of accounting leadership like Chief Financial Officer, Financial Controller and others. Under these roles, the professional accountants become responsible for all the financial matters and aspects in the companies and it demands technical skills and specialized knowledge in the accounting areas like taxation, financial reporting, treasury and others (Goretzki, Strauss and Weber 2013).
Business organizations emphasize on the aspect of financial leadership with the aim to ensure that all the financial and accounting activities support the good performance of the whole organization. For this reason, the requirement for the professional accountants is to fulfill their basic duties along with providing support in the processes of operations and tragic decision-making. For these reasons, the leadership role of the professional accountants requires leadership traits, leadership characteristics, skills for managing the organizations along with the interpersonal skills (Howieson et al. 2014). Thus, it can be said that leadership role of professional accountant has major importance in the process of strategic management.
4. a. Role of Organization and Industry in Value Chain Analysis
It is needed for the business organizations to take into consideration the roles of both the companies and industries in the process of value chain analysis. Difference in the strategy of value chain can be seen for different industries. Difference in value chain can be seen in different industries as the industries become more global, more cooperative on the basis of their needs (Gereffi and Sturgeon 2013). For example, the companies like FedEx consider their future as a circular chain that provides values to the renewability. On the other hand, the companies like the World Bank and others tend to use global value chains with the aim to foster international cooperation for assisting the poorest countries in the world. Thus, it can be said that the industry value chain consists of all the activities that lead to the creation of values for the companies in the same industry. On the other hand, the value chains of the companies include the activities that lead to the creation of value for their customers. In both of the cases, value chain analysis provides the companies as well as industries with the required competitive advantages for value creation (Williams et al. 2013.).
4. b. Design and Structure of Value Adding Activities, Value Drivers and Value Chains
According to the above discussion, Ansell Strategic is needed to consider certain aspects in the development of their supply chain. Ansell Strategic operates in the service industry and it requires certain manual processes involving the human being interactions. For this reason, the value chain of Ansell Strategic needs more advanced scheduling system with the aim to implement better coordination. Customers play an integral part in the companies under service industry; and it can lead to service heterogeneity and can impact the service quality. For this reason, it is hard to measure as well as monitor the service quality (El-Sayed 2014).
At the same time, the company must acquire the understanding of the external environment on the company so that it can become possible for them to create a suitable value chain by taking into consideration the effects of external environment. After that, it is needed for the company to consider the drivers of value chain at the time of their value chain analysis. In this case, some of the major value chain drivers can be economies of scale, interrelationship, internal policies of the organizations, location, integration between different departments and others (Howieson, Lawley and Hastings 2016). Thus, it can be seen from the above discussion, the company is needed to consider these aspects in their value chain analysis.
5. Characteristics of Effective Strategic and Corporate Social Responsibilities for Measuring Performance and Control System
In the recent years, Strategic Corporate Social Responsibility is considered as one of the major aspects in the areas of performance measurement and control system; and this aspect has certain characteristics. Strategic corporate social responsibility can be considered as a strategic approach that the business organizations can use for the determination of the specific socially responsible business activities that they can offer with the adequate resources (Chandler and Werther 2014). This aspect indicates towards a specific characteristic of strategic corporate social responsibility that it helps the companies in gaining the competitive advantage. Another major characteristic of strategic corporate social responsibility is that it helps the business organizations to follow the components of the generic strategies of business and this aspect helps the companies in establishing effective control on the business operations (Chandler and Werther 2014).
At the same time, strategic corporate social responsibility helps the firms in maintaining an optimal balance between the creations of economic value with the societal value. After that, the business organizations can manage the relationship of different stakeholders with the assistance of strategic corporate social responsibility. In case of the measurement of business performance, one major characteristic of strategic corporate social responsibility is that it helps the companies in the identification of the threats and opportunities in case of stakeholder managements. In this way, they can measure the performance of their business. Most importantly, business organizations become able in creating new business opportunities with the help of strategic corporate social responsibility and it ensures the improved performance of the business organizations (Michelon, Boesso and Kumar 2013).
6. Strategic Management Accounting to Select, Plan, Implement, Control and Monitor
It needs to be mentioned that there are certain strategic management accounting techniques that can help Ansell Strategic in the process to select, plan, implement, control and monitor the business activities; and they are discussed below:
Conclusion
The above discussion indicates towards the fact that there is a relation between the value chain and strategic management of the companies. According to the above discussion, companies can enhance the performance of their value chain with the help of different strategic management tools like gap analysis, SWOT analysis, Porter’s Value Chain and others. It can also be seen from the above discussion that the companies are needed to follow five specific steps in order to develop, implement and monitor strategies like development of strategic objectives, inclusion of the responsible employee and others. According to the above discussion, four major components of strategic management cycles are strategy formulation, planning, implementation and review. It can be observed from the above discussion that the companies are needed to consider the aspects like companies and industries at the time of the development of their business value chain. The development of value drivers and value activities depends on the industry types. The above discussion also indicates towards the fact that the strategic corporate social responsibility assists the companies in measuring the business performance along with implementing control systems. Lastly, companies can implement specific strategic management accounting techniques for the purpose of selection, planning, implementation, control and monitoring; they are activity based costing, attribute costing, strategic costing, benchmarking and others.
References
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