Management Accounting Report: Macquarie Group Analysis

This report provides a detailed analysis of management accounting principles, specifically focusing on value chain analysis and its application within the context of Macquarie Group, an independent multinational investment bank and financial services firm. The report begins by defining the value chain and its significance in enhancing production efficiency and identifying sources of competitive advantage, as well as identifying complex interrelationships and dependencies. The report then presents a case study on Macquarie Group, examining its mission, values, and differentiation strategy. The core of the report involves a value chain model of Macquarie Group, followed by an in-depth examination of two key activities: inbound logistics and technological development, assessing their roles in the company's success. The report concludes with a theoretical evaluation, linking the chosen activities to real-world situations and highlighting the importance of supplier relationships and technological advancements in the company's value chain. The report also provides relevant references for further reading.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

1MANAGEMENT ACCOUNTING
Table of Contents
Question 1:.........................................................................................................................2
Part a:.............................................................................................................................2
Part b:.............................................................................................................................2
Requirement i:............................................................................................................2
Requirement ii:...........................................................................................................2
Requirement iii:...........................................................................................................3
Requirement iv:..........................................................................................................3
Requirement v:...........................................................................................................4
References:........................................................................................................................5

2MANAGEMENT ACCOUNTING
Question 1:
Part a:
Value chain is described as a business model that represents the overall
activities needed for formulating any product or service. In case of organisations
involved in producing products, value chain comprises of the steps that include bringing
any product from conception to distribution like raw material procurement,
manufacturing processes and marketing activities (Barney 2015). This analysis is
performed for increasing the production efficiency in order to assure delivery of
maximum value for the organisation at the least possible cost. The two ways through
which the value chain analysis results in yielding benefits to an organisation are
described as follows:
Identification of sources of competitive advantage:
Since all activities could not traded by an organisation in the external market,
value chain analysis suggests that the organisation could consider such activities as the
sources of economic rent. Moreover, the activities could act as obstacles to the new
entrants or they might result cost disadvantages to the competitors (Herrera 2015).
Identification of complex interrelationships and dependencies:
The internal linkages could be described as interrelationships between activities
within the similar organisational units, while the external linkages are between the
business units of identical or different organisations. By analysing these
interrelationships, an organisation could seek benefit from joint optimisation and
coordination.
Part b:
In this section, Macquarie Group is selected as the organisation, which is an
independent multinational investment bank and financial services firm operating in
Australia.
Requirement i:
The mission of Macquarie Group is to provide value to creativity and innovation
and it uses its diversity via inclusion. Inclusion denotes developing a workplace
environment, in which staffs are motivated to work irrespective of their age, gender,
cultural affiliation, ethnicity, educational background or beliefs (Koc and Bozdag 2017).
In terms of values, Macquarie Group always undertakes efforts for identifying
opportunity so that they could be realised for the clients, community and other
stakeholders. Moreover, the organisation provides encouragement to integrity,
innovation and entrepreneurial spirit (Macquarie.com 2019).
Requirement ii:
The description of the competitive strategy of Macquarie Group could be
analysed from its differentiation strategy. The organisation procures the valuable and
unique inputs, which are not available readily to the competitors. For differentiation
basis, it changes the individual entities. The cost drivers like linkages, interrelationships,
integration and scaling are altered for the development of uniqueness. Some instances
of differentiation for Macquarie Group are provided as follows:

3MANAGEMENT ACCOUNTING
 Forward integration for having better control over inputs
 Usage of new distribution channels
 Enforcement of innovative process technologies
Requirement iii:
Figure 1: Value chain model for Macquarie Group
(Source: Macquarie.com 2019)
Requirement iv:
From the above-depicted value chain model of Macquarie Group, one value-
adding activity from the primary activities and one value-adding activity from the support
activities are selected. From the primary activities, inbound logistics is chosen and from
the support activities, technology development is chosen. The detailed analysis of these
two chosen activities is represented as follows:
Inbound logistics:
Inbound logistics include the suppliers that are involved in funding the activities of
Macquarie Group. They mainly include the investors investing in the shares of the
Group, commercial papers as well as the foreign investors. Macquarie Group is involved
in working closely with its high and medium-risk suppliers for identification of the
potential issues along with the measures for addressing them (Neilson 2014). For
managing this, the organisation has developed “Corporate Responsibility Supplier
Questionnaire”.
All new high-risk and medium-risk suppliers are needed to fill up the
questionnaire and it is a condition to renew the contract as well in case of the existing

4MANAGEMENT ACCOUNTING
pertinent suppliers. The questionnaire has provided necessary information for ensuring
that the right suppliers are chosen and they have effective policies of corporate
responsibility, which is in line with the standards of the Group.
Technological development:
With the rise in number of branches and operating areas going global, Macquarie
Group is depending more on technology for reaching the diversified customer base
(Porter and Magretta 2014). However, there is significant cost incurred for technological
improvements. Macquarie Group is involved in using technology for reaching out its
operations, which are spread globally. For reaching the customers, the organisation is
involved in using mobile applications needing greater quality of technological support.
They are used for keeping past bank records, former and existing staff records and
customer records (Porter and Kramer 2019). The records are maintained effectively by
Macquarie Group for supplying information to branches like when opened by which
organisation along with history of the building.
Requirement v:
The theoretical evaluation of the above two activities would be conducted by
linking the same with the real life situation. From the theoretical perspective, it has been
learnt to maintain strong relationships with the suppliers, since their support is essential
for receiving, storing and distributing the product (Riasi 2015). This has helped in
relating with the inbound logistics operations of Macquarie Group. It has been found that
Macquarie Group is involved in working closely with its high and medium-risk suppliers
for identification of the potential issues along with the measures for addressing them.
In theory, it has been learnt that all value chain activities rely on technological
development. For Macquarie Group, it has been found that With the rise in number of
branches and operating areas going global, Macquarie Group is depending more on
technology for reaching the diversified customer base. For reaching the customers, the
organisation is involved in using mobile applications needing greater quality of
technological support.

5MANAGEMENT ACCOUNTING
References:
Barney, J., 2015. 15 Firm resources and sustained competitive advantage. International
Business Strategy: Theory and Practice, p.283.
Herrera, M.E.B., 2015. Creating competitive advantage by institutionalizing corporate
social innovation. Journal of Business Research, 68(7), pp.1468-1474.
Koc, T. and Bozdag, E., 2017. Measuring the degree of novelty of innovation based on
Porter's value chain approach. European Journal of Operational Research, 257(2),
pp.559-567.
Macquarie.com., 2019. Macquarie Group. [online] Available at:
https://www.macquarie.com/in/corporate [Accessed 29 May 2019].
Neilson, J., 2014. Value chains, neoliberalism and development practice: The
Indonesian experience. Review of International Political Economy, 21(1), pp.38-69.
Porter, M. and Magretta, J., 2014. Strategy and Competition: The Porter Collection (3
Items). Harvard Business Review Press.
Porter, M.E. and Kramer, M.R., 2019. Creating shared value. In Managing sustainable
business (pp. 323-346). Springer, Dordrecht.
Riasi, A., 2015. Competitive advantages of shadow banking industry: An analysis using
Porter diamond model. Business Management and Strategy, 6(2), pp.15-27.