So as to remain competitive in the market, Fonterra Company limited needs the ability to respond to changes in the business environment. One thing that business owners should understand is that management accountants play crucial roles in helping a company remain competitive. As the CEO of Fonterra, you should know the role that a management accountant plays in the formulation, implementation, and evaluation of the strategies of Fonterra Company.
In the strategy formulation, the management accountant has the role of assisting the company management in making initial decisions using various strategy formulating methods. In fact, management accountants play a huge role in developing the grand strategy for a company. They can assist in analyzing customer profitability, benchmarking the company operations with those of other businesses in the business and making decisions on how to appraise investments for the enterprise. A management accountant can assist in tracking the positions of the competitors and product prices in the market.
The management accountant also uses their costing techniques to determine whether the strategies proposed viable for the company. In this case, the role of the management accountant is to present advice to the company management whether taking a particular strategic decision is viable. In strategy formulation, the management accountant helps in strategic decision-making by giving a financial analysis of the company. As such, they will assist in determining if that decision is feasible depending on various strategic factors.
In strategy formulation, the management accountants play a crucial role in validating strategic decisions. They do so by providing information on the performance of the business, forecasting, and re-forecasting, as well as appraising investments. In this case, they can contribute substantially to the strategy formulation when making decisions on pricing, merger, and acquisitions, market and business development, and development of new products.
Like in formulation, management accountants play a critical role in the implementation of the company’s strategy. Through partnering with other managers, the management accountant will participate in implementing the approved strategies for the business. Since the management accountants provide support for decision making, they play a role in generating and analyzing options available in implementing the strategy. The management accountant can weigh options of implementing the task by collecting and analyzing internal as well as external data regarding the business environment. The accountant can advise the company management on the changes needed to survive in the new environment. They can contribute in deciding on the resource position that the firm needs to invest during the implementation of the strategy In such as case, if the strategy requires modification, the management accountant will provide the necessary details that will help achieve the strategy objectives.
The management plays a vital role in communicating financial and non-financial data to managers in the business for decision-making. Therefore, when evaluating the strategy, it is important to involve the management accountant who will help in weighing things out on whether the financial and non-financial objectives of the strategy will be met after implementation. It means that the management account has an important role in providing feedback regarding the success of the strategy through monitoring and evaluation of the results. Using various tools such as variance analysis, exception reporting, and analysis of margin, the management accountant can assist in evaluating the strategy of the business.