Someone recently bought our

students are currently browsing our notes.

X

Topic 1 Lecture Notes

Accounting Notes > Strategic Finance, Digitization and Extended Enterprises Notes

This is an extract of our Topic 1 Lecture Notes document, which we sell as part of our Strategic Finance, Digitization and Extended Enterprises Notes collection written by the top tier of LSE students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Strategic Finance, Digitization and Extended Enterprises Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

AC310 Module 1: Topic 1

TOPIC 1: THE TRANSFORMATION OF FINANCIAL MANAGEMENT, MANAGEMENT ISSUES IN THE 'NEW ECONOMY' WHAT IS THE 'NEW ECONOMY'?

*

*

*

Some people suggest there is no new economy o Because the fundamentals of economics haven't changed Idea of "iPod economy" o Individualism with technology Rise of the internet economy o Management accounting was inadequate o Required changes in how we visualise data o Others argue we can still use traditional methods e.g. Transfer pricing

STRATEGY - STRUCTURE - ACCOUNTING

*

*

Throughout history, strategy requirements have fed organizational structure and in turn fed accounting requirements However, with the internet age, structure has broken down and therefore we cannot always rely on historic methods

ACCOUNTING PRIOR TO THE INDUSTRIAL REVOLUTION

*

*

*

*

Merchants approached craftsmen and sold crafts to nobility Problem: Merchants did not own the factors of production Problem: Backward sloping labour demand curve o Market set the price, so merchants could not influence price and therefore increase their wealth easily Accounting used for record-keeping

RISE OF THE MODERN FIRM

*

*

*

*

*

Merchants bought factories and hired labour Industrial revolution was more than just technology Parcelling the artisan crafts into simple tasks that cheap labour could complete o Social changes o Young people "employed" and exploited Accounting used to set standards o i.e. cost accounting Bhimani - 'Made invisible hand of market, visible through accounting'

1900'S

*

*

*

*

Merchants/employers became richer Rise of new firm structures o CEO/owners, with many divisions such as operations, marketing and distribution Increasing complexity Accounting became a tool for management o Budgets o Calculative tools o Strategy

WORLD WAR I

*

*

*

*

*

*

War effort War profiteering o Firms charged extortionate prices for munitions etc. Employers realised they could do more than crafts Development of multi-divisional organisations Multi-nationals Requirement for master budgets and transfer pricing

1960'S

*

Rise of matrix organisations

Buy the full version of these notes or essay plans and more in our Strategic Finance, Digitization and Extended Enterprises Notes.