Why is it important for managers to understand and analyse the cost structure of their organisations?
Understanding the organisation’s cost structure provides key data to managers for planning and controlling, as well as costing products, services, even customers. By focusing on basic costs concepts, analyses, uses, and procedures, instead of procedures alone, we recognize cost analysis as a managerial tool for business strategy.
The cost analysis process would help managers to understand and implement the strategy, diagnose the performance and influence behaviour and decisions. It is the analysis of cost in a broader context, where the strategic elements become more conscious, explicit and formal. Cost data is used to develop superior strategies in route to gaining sustainable competitive advantage. Leading training providers, EuroMaTech are conducting a course on ‘Cost Analysis to Support Strategic Decisions’, in Dubai this week, which deals with these aspects.
Adopting an appropriate analysis of costs gives a clear understanding of the organisation’s cost structure in search for sustainable competitive advantage through cost reduction. It is the managerial use of cost information explicitly directed at one or more of the four stages (strategy formulation, communicating the strategy, implementing and controlling) of strategic management. Overall recognition of the cost relationships among the activities in the value chain, and the process of managing those cost relationships to the attainment of organisation’s strategic objectives are the main focal point of exploring cost analysis.
Accordingly, EuroMaTech introduces this course to provide a basic guideline to those organisations who plan to undergo cost analysis as a part of strategic analysis. It tries to facilitate the practitioners to apply a coherent link between costs, strategy, competitive advantage and performance evaluation, throughout performing a relevant and appropriate costs analysis process, said Dr. Moataz Elmassri, Senior International Finance Consultant, EuroMaTech.
Topics covered in the course includes:
- Introducing the linkages between strategy and costing
- Cost analysis and classifications
- From cost accounting to management control
- Flexible budgets and variance analysis
- Linking strategy to actions: Beyond costing
No matter what background you come from, this course will make costing, budgeting and performance measurement easily understood for every discipline across the organization.
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