Assignment on Advance Management Accounting

Running head: ADVANCE MANAGEMENT ACCOUNTING
ADVANCE MANAGEMENT ACCOUNTING
Name of the Student:
Name of the University:
Author Note:

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Executive Summary
Integrated Reporting has become worldwide famous currently as well as Strategic
Management because organizations are mainly focusing on the diversified market demand.
To meet the demand, the organization must adopt these concepts in every organization. But
every idea has some issue related to it. Few problems and challenges are discussed in this
project faced by one of the major company in Australia “Orica Limited”. The issues are
discussed in detail and along with that few solutions are also provided which the organization
follows to reduce the issues related to the concepts as both the concepts are equally crucial
for the continual growth of the company.

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TABLE OF CONTENTS
1.1 Introduction.....................................................................................................................3
1.2 Discussion.......................................................................................................................3
1.2.1 The challenges faced by Orica Limited regarding the implementation of Strategic
Management...........................................................................................................................3
1.2.2 How Orica Limited tries to eliminate or minimize the issues related to Strategic
Management...........................................................................................................................4
1.2.3 Orica Limited faces some common challenges or issues regarding the Integrated
Reporting................................................................................................................................5
1.2.4 More distinguished issues faced by Orica Limited regarding the report and how do
they address the issues...........................................................................................................6
1.3 Conclusion.....................................................................................................................10

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1.1 Introduction
In Australia, both the concepts of Integrated Reporting as well as Strategic
Management, is popular because it is crucial for the organizations to keep track of their plans
and to achieve the goal. Integrated Reporting is essential for the stakeholders as well because
then they could easily understand the overall company performance, which includes the
performance of all the departments and one merged annual report is formed. Strategic
Management, on the other hand, is the concept which shows that one company should use the
strategic planning technique which will help the company to achieve the goal quickly. The
managers use strategic management process at the beginning of any project at evaluating and
analyze about the market condition regarding the demand of the product and integrated
reporting technique is applied by the report preparers at the end stage of any project when the
product or service sold in the market and the company earns the revenue. The report
preparers with vast knowledge regarding integrated reporting follow the framework and
gather information from all the department which are involved for the processing of that
specific product or service, about the earning of that company and then analyses the total
profit excluding the cost and manufacturing cost from the selling price. Whereas apart from
all the opportunities, in this report, the challenges are highlighted along with the steps that are
adopted by Orica Limited to reduce the issues regarding these concepts. The steps are
discussed in detail. The discussion of this report also includes a few problems which are also
related to other major companies in Australia as well in the other companies outside the
country because the market demand is changing day by day.

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1.2 Discussion
1.2.1 The challenges faced by Orica Limited regarding the implementation of
Strategic Management
Strategic Management is very important for every organization. Orica Limited has
maintained and worked according to the format under strategic management. However, Orica
has faced few issues while the executive managers work according to the framework under
the strategic management, and many of them are unavoidable (Australian Financial Review,
2020). The challenges explained following:
 Training inefficiency by the organization: Orica Limited has high-quality
training available their employees so that they are more productive as well as
more initiative for earning incentives. To train the employees, employers of
Orica are supposed to adopt new technologies to upgrade the training
technique. Otherwise, the training will lack the efficiency level for the
employees. Continuous pressure is always going on to take the new
technology to achieve the goal strategically (Accaglobal.com, 2020).
 Lack of strategy efficiency: developing a good strategy is significant for every
organization and so to achieve the goal Orica at first analyses the frequently
changing demand as it is the only way to increase the productivity of the
organization.
 Failing to communicate adequately: communication is the key to achieve the
goal strategically. It is quite possible to face conflicts while communicating
the strategies by the supervisors to their employees and decreasing the
miscommunication Orica applies the strategic management process (Skyword,
2020).

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 Smartly utilising the resources: while preparing the customized strategic
management report for the specific project, the managers of Orica takes in
consideration all the direct as well as indirect resource smartly which is useful
for the Orica Limited’s production. Being productive and efficient will
increase the possibility for the organization to achieve the goal and earn the
profit.
 Following the planned strategy carefully: the strategic management states that
Orica must follow-up the planned steps thoroughly so that the goal is achieved
with limited issues. The market demand is changing which makes it difficult
for the executive managers of Orica to accomplish the goal (NGO Pulse,
2020).
1.2.2 How Orica Limited tries to eliminate or minimize the issues related to
Strategic Management
Orica Limited is a big company whose management department is very productive in
handling and upgrading the issues related to Strategic Management. Orica has adopted the
process of strategic management as it is very beneficial in the market for the sellers to
systematically plan the strategies of the organization to earn maximum profit without
minimizing the quality of their product. It will make sure that the customers and the
manufacturers of Orica Limited are equally satisfied.
The strategies which are developed before every new project is reviewed carefully
and analyzed by the senior executive managers of Orica Limited to examine whether the new
policy is relevant to the old procedure or not. The budget of the prepared strategy is well
explained by the managers of Orica so that there is no conflict regarding the impact and
implementation of the organization (Abeysekera, 2013).

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Including incentive packages in the new strategy will improve the initiative of the
employees. Increment in the incentive works as an energy booster for the employees. Orica
Limited tries to improve or upgrade their strategy according to the market demand and need
as the organization needs to cope up with the increased demand of the market and to enhance
the procedure according to the employees also makes it easy to adopt the approach quickly by
the employees (Eden & Ackermann, 2013).
1.2.3 Orica Limited faces some common challenges or issues regarding the
Integrated Reporting
Integrated Reporting is applied by this organization to merge the annual report into
one and to simplify it so that it becomes easily understandable by the stakeholders and the
auditors. The integrated report also includes some important information related to the
organization, which otherwise might be hidden by the organization and helps the stakeholders
to decide whether to invest or not. Integrated reporting is also known as end report because it
is presenting the annual report to the board of chamber and the stakeholders in a simplified
way. The following are the issues faced by Orica which are related to the implementation of
Integrated Reporting:
 Maintaining the materiality of the report as well as the time invested: Orica’s
executive managers face these problems whenever they have to prepare the annual
integrated report because the quality of the report cannot be compromised and the
report is supposed to be developed within the period. Researching for the exact and
genuine data can be very time-consuming.
 The workload is increasing day by day: adopting the method of integrated reporting
has increased the workload for the managers and auditors because collecting the raw
and authentic data takes a lot of effort. Integrated reporting of Orica includes the

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profit margin from all the departments. The executive managers take into account all
the information from all the departments of Orica.
 Adoption cost of the organization: the integrated report includes a massive amount of
research and factual data, which ultimately increases the initial value as well as
continuation cost of Orica which cannot avoid. Maintaining this increased cost is a
challenge for the executive managers of Orica.
 No issues from the stakeholder side regarding the usage of traditional method: it has
been noted by the organization that there are still many companies in Australia which
are again using the conventional way of reporting. However, the stakeholder is not
conducting any issue regarding the reporting style; instead, they have accepted the
traditional method as the best method or reporting.
 Enough knowledge regarding the information to be collected: the report preparers or
the executive managers of the Orica are supposed to acquire proper knowledge
regarding the report and what kind of data should be received for the report and how
the data must be collected. It is essential to know which data is relevant for the report
and which is not. The collected must be authentic as well as appropriate for the report.
1.2.4 More distinguished issues faced by Orica Limited regarding the report and
how do they address the issues
1. Effects of incentives, barriers and enablers
The report preparing department of Orica makes sure that the integrated report
meets the increased demand of the capital providers. It is essential to meet the demand to
maintain a good relationship with the capital providers as it will make sure that capital is
always available to the organization. The report preparer of Orica Limited promotes the
integrated reporting method so that other organizations also get motivated by the usage
and the usefulness of the report and starts adopting this reporting style.

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The report preparers are allowed to use practical examples and simplify the
process as much as possible so that it will be more easily understandable by the
understandable and the other organizations to adopt the reporting style. Orica has
involved themselves with the policymakers so that this reporting style is more highlighted
by the regulatory environment and other firms more choose this reporting style (David &
David, 2019).
The report preparers of Orica Limited knows what kind of information is useful
for the report and authentic for the stakeholders. Being an active CSR agent, the
organization tries to promote the growth of all the other Public sector firms, non-profit
organizations and SMEs who are on the growing stage of using the integrated reporting.
The report preparers of Orica also helps those who are on the initial phase of
implementing the integrated reporting.
2. Other issues related to quality
Orica Limited managers provide practical examples into the report notes for those
who are currently taking training for the integrated reporting so that it will be easy for the
trainees to understand the application well. The organization allows the other firms and
sectors to evaluate the Framework that is attached to their integrated report so that there
will be an improvement in the growth of the report. The report preparers try to promote
the credibility of their prepared statement along with their trust upon the prepared integral
report (Vogel & Güttel, 2013).
3. Content element
Orica Limited tries to explain their practical examples to the stakeholders and
other firms so that there will be more opportunity to inform more about themselves.
Creating and maintaining the value of the organization can only be possible when the

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organization gives more importance to the organization’s governance because their
support will create more value for the company. Orica tries to maintain continuous
relevance for its governance body (Dumay et al., 2016, September).
Orica limited tries to deliver the necessary and authentic information regarding
their organization through the integrated report so that vital information is always passed
to the investors.
4. Essential principles for guiding the organization
Orica Limited makes sure that their prepared annual integrated report perfectly
aligns with the framework of the report. The report preparers of Orica Limited are well
aware of the importance of the balance in the prepared integrated report.
Orica Limited report preparers adopted the framework of integrated reporting, and
they try to stick to the frame which helps them to improve their reporting management
and to improve the organization’s productivity (Rothaermel, 2017).
5. Preparing a well-planned business model
Orica Limited uses the integrated reporting method, which also indirectly helps
the organization to plan a better business model for the future. It also helps to increase the
productivity of the annual report. The report preparers are also capable of distinguishing
between outcomes of the organization with the capital invested in it (Lasserre, 2017).
To have better communication between the executive managers, report preparers
and CEO of Orica, integrated reporting is essential for creating a good relationship with
company governance. The report prepares also makes sure that those statements which
contain any government charges must get elevated before the annual report is ready. The
report makers also promote practical examples.

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6. Maintaining the materiality as well as creating value
Orica Limited managers give importance to the value-creating ideas of the
integrated reporting framework. Mixed and various arguments which give equal
importance so that there will be more materiality to the annual report. The report
preparers of Orica Limited finds out the similarities which are present regarding their
Framework with the other Framework. Practical examples also shared regarding the
materiality determination by the organization (De Villiers, Rinaldi & Unerman, 2014).
7. The organization maintains stakeholder’s legitimate needs and the interests
The legal and authentic demands of the stakeholder are fulfilled by the help report
preparers by accessing to the innovative examples which ultimately discloses the practical
ideas. The principles of the framework also contain some purposes of maintaining the
relationship with the stakeholders and also how to meet their needs at the perfect time.
For the betterment of the organization, the report preparers first understand the market
need and then customize the report accordingly (Cheng et al., 2014).
8. Maintaining the report integrity along with the connectivity
Orica Limited report preparer follows the technique related to IIRC’s
interpretation which increases the market understanding of the report preparers and also
they can know about the current need of the operation and management. The management
department of Orica also promotes its practical examples regarding the concept, which
shows that they are beneficial while collecting the data (Adams, 2015).
The report preparers of these organizations have good relation with other
corporates who can support or connect with the organization’s integrated report. They do
enough research related to the decision-making process, along with the information.

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9. Proceeding towards multiple capitals
The report preparers of Orica keep themselves updated with the IIRC’s guidelines
so that they are always eligible for bringing changes into the strategies. Reflective
examples are displayed in the integrated report to add more meaningful and leading
practices (Aicd.companydirectors.com.au, 2020).
Orica Limited has maintained to cover all there six capitals which mentioned in
the Framework of the report. The report experts of the organization have prepared the
help report to access the relationship between social, intellectual and human easily
(Assets.kpmg, 2020). The unique relationship capital of Orica metrics such that it suits
the organization’s circumstances.
1.3 Conclusion
Form the above discussion, and it can conclude that there are mainly the common
issues and challenges which are raised by the Orica Limited and they are similar to the
problems posed by other companies as well who are also engaged in using integrated
reporting and strategic management process for their management. The issues, however, can
be eliminated to some extent if followed some simple steps as followed by Orica Limited.
There are many organizations where they use traditional method but stakeholders raised no
issues regarding that. Orica Limited in their annual report has also increased the concerns
regarding the process of strategic management and the process of integrated reporting. The
report has addressed the issues that even after considering all the facts from the framework, it
is not possible to avoid few issues altogether because the market and capital investors’
demand is changing day by day and it is challenging to meet all the expectations at one point
of time.
References:

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14(2), 227-245.
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