Answer
Management accountants must understand the company's strategy in order to make financial decisions that are consistent with that strategy. For instance, McDonalds should not raise the price of it's Big Mac even if it would boost company revenue because a raise in price would be inconsistent with the company's strategy.
Work Step by Step
McDonalds focuses it's company strategy around operational excellence by offering products at a lower price than their competitors. Raising the price of the Big Mac would conflict with this strategy.
The purpose of any activities in a business organization is to achieve profit. Therefore, the main business strategies always incorporate this purpose during execution.
Every element of the organization including the various executives should understand and work in favor of these strategies.
The accountants should be aware of these strategies because it can help them to work in line with the organizational goals. If the accountant do not know the business strategy, they will diverge from the focus of the organization towards its goal and may bring undesired results, sometimes may end up in huge losses.
