ABSTRACT
This chapter discusses how the technique of strategic management accounting (SMA) can be tailored to the organization’s need to make the right decisions in a rapidly changing business environment by providing quality information related to their key performance indicators and major cost drivers. The current hyper-competitive business environment demands athletic organizations which can understand their customers’ needs, have the reflexes to respond quickly to a change in demand and the expertise to counteract any strategic moves made by competitors by continuously reinventing themselves. SMA is an approach which tailors management accounting and marketing metrics to an organization’s strategic objectives. It sets management accounting in a broader context in which financial information is used to compare an organization with its competition and develop superior strategies as a means of achieving sustainable competitive advantage. Competitive benchmarking is a method pioneered by a number of organizations, including Xerox.
