...need more than 1 school. The five p´s of strategy Plan: Forward looking. Can be dangerous if it is strictly planned and something unforeseen happens. Patterns: Backwards looking Positions and perspective. Locating a particular product in a particular market: Strategy of positioning a product. Example: Introduce breakfast at McDonalds to use restaurant in the morning. The new position is consistent with existing perspective. The strategy of absent strategy Deliberately using absent strategy promotes flexibility, experimentation and innovation. Management control. Chapter 1 in the book. Management control is the systematic process by which the organization’s higher-level managers influence the organization’s lower- level managers to implement the organization’s strategies. Decentralization is the single most important reason for organizations to need management control systems. So, Management Control is about decentralized organizations. Need for control Decentralized managers do not automatically understand the goals and strategies developed by higher level managers, nor how they can contribute to these goals and strategies. Decentralized managers do not automatically agree with organizational goals and strategies developed by higher-level managers. Decentralized managers do not automatically have the resources needed to act with...
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...Solutions Manual COST ACCOUNTING Fifteenth Edition Charles T. Horngren Srikant M. Datar Madhav V. Rajan ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- Acquisitions Editor: Ellen Geary ------------------------------------------------- Editorial Project Manager: Nicole Sam ------------------------------------------------- Editorial Assistant: Christine Donovan ------------------------------------------------- Project Manager: Roberta Sherman ------------------------------------------------- Supplements Project Manager: Andra Skaalrud ------------------------------------------------- Copyright © 2015 Pearson Education, Inc. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying...
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...Chapter 1 Managerial Accounting and the Business Environment Lecture Notes Chapter theme: This chapter serves four main purposes. First, it explains the differences and similarities between financial and managerial accounting. Second, it describes the role of management accountants in an organization. Third, it explains the basic concepts underlying Lean Production, the Theory of Constraints (TOC), and Six Sigma. Fourth, it discusses the importance of upholding ethical standards. I. Globalization A. Import/Export Data i. Imports into the United States (in billions) 1. The data reveal an enormous increase in import activity from 1990 to 2004. In particular, imports from Canada, Mexico, and China skyrocketed. ii. Exports from the United States (in billions) 1. The data reveal an increase in exports to Canada and Mexico. Interestingly, the increase in exports to China pales in comparison to the growth rate in imports from China. iii. Internet Usage 1. The internet fuels globalization by providing companies with greater access to geographically dispersed customers, employees, and suppliers. 2. The number of internet users more than doubled during the first four years of the new millennium. 3. As of 2004, more than 87% of the world’s population was still not connected to the Internet...
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...Management controls are about influencing human behavior Result control (USA) Check results to make sure that employees make right results Performance measurement: * Financial * Non-financial Incentives: * Extrinsic * Intrinsic Elements of result controls * Empowerment & decentralization * Performance indicators & targets * Consequences of own actions and decisions * Rewards * Manu organizational levels: alignment Conditions for effective results controls: * Determine & communicate what results are desired in the areas being controlled * Employees have significant influence on results * Results can be measured Action control Check all the actions to make sure that employees make right actions Behavioral constraints (physical, administrative passwords) Action accountability (procedures, policies, codes, professional judgement) Preaction reviews (budgets, investments, huge contracts) Redundancy (4 eyes principle, back up systems: high risks complex decisions) * Be able to determine what actions are (un)desirable * Be able to ensure that the (un)desirable actions (do not) occur Personnel control Put the right people on the right place The game is important Check the working process Selection & placement Training Job design Cultural control Influence the culture of the company To make good cultural perform * Codes of conduct * Group rewards * Employee rotations * Physical & social arrangements ...
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...centralization decision: should he combine product management for the company's two business units--cutting and welding--which operated largely independently of each other but shared the same brand? His technical leader believed that an integrated product range would make the company's offerings more appealing to businesses that bought both types of equipment. These customers accounted for more than 70 percent of the market but less than 40 percent of the company's sales. "You cut before you weld," he explained. "You get a better weld at lower cost if the cutting is done with the welding in mind." Managers in both divisions, though, resisted fiercely: product management, they believed, was central to their business, and they could not imagine losing control of it. The CEO's dilemma--were the gains of centralization worth the pain it could cause?--is a perennial one. Business leaders dating back at least to Alfred Sloan, who laid out GM's influential philosophy of decentralization in a series of memos during the 1920s, have recognized that badly judged centralization can stifle initiative, constrain the ability to tailor products and services locally, and burden business divisions with high costs and poor service.1 Insufficient centralization can deny business units the economies of scale or coordinated strategies needed to win global customers or outperform rivals. Timeless as the tug-of-war between centralization and decentralization is, it remains a dilemma for most companies....
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...Chapter 1 Lecture Notes Chapter theme: This chapter describes the larger business environment within which management accounting operates. It is divided into nine sections: (1) globalization, (2) strategy, (3) organizational structure, (4) process management, (5) the importance of ethics in business, (6) corporate governance, (7) enterprise risk management, (8) corporate social responsibility, and (9) the Certified Management Accountant. I. Globalization 1 A. Import/Export Data i. 2 Imports into the United States (in billions) 1. The data reveal an enormous increase in import activity from 1995 to 2007. In particular, imports from Canada, Mexico, and China skyrocketed. ii. Exports from the United States (in billions) 1. The data reveal an increase in exports to Canada and Mexico. Interestingly, the increase in exports to China pales in comparison to the growth rate in imports from China. iii. 4 Internet Usage 1. The internet fuels globalization by providing companies with greater access to 1 3 4 geographically dispersed customers, employees, and suppliers. 2. While the number of internet users continues to grow, as of 2008, more than 78% of the world’s population was still not connected to the Internet. This suggests the Internet’s impact on business has yet to fully develop. II. Strategy A. Definition 5 i. A strategy is a ―game plan‖ that enables a company to attract customers by distinguishing itself from competitors. B. Customer value propositions i....
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...Chapter 1 Managerial Accounting and the Business Environment Solutions to Questions 1-1 Managerial accounting is concerned with providing information to managers for use within the organization. Financial accounting is concerned with providing information to stockholders, creditors, and others outside of the organization. 1-2 Essentially, managers carry out three major activities in an organization: planning, directing and motivating, and controlling. All three activities involve decision making. 1-3 The Planning and Control Cycle involves formulating plans, implementing plans, measuring performance, and evaluating differences between planned and actual performance. 1-4 A line position is directly related to the achievement of the basic objectives of the organization. A staff position is not directly related to the achievement of those objectives; rather, it is supportive, providing services and assistance to other parts of the organization. 1-5 In contrast to financial accounting, managerial accounting: (1) focuses on the needs of the manager; (2) places more emphasis on the future; (3) emphasizes relevance and flexibility, rather than precision; (4) emphasizes the segments of an organization; (5) is not governed by GAAP; and (6) is not mandatory. 1-6 A number of benefits accrue from reduced setup time. First, reduced setup time allows a company to produce in smaller batches, which in turn reduces the level of inventories. Second, reduced setup time allows a company to spend...
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...Decentralization and Local Government in the Zimbabwean Constitution By Dele Olowu, Africa Europe Foundation, Netherlands Paper prepared for the Constitutional Conference, Zimbabwe, October 26-29, 2009, Rainbow Towers, Harare, Zimbabwe Introduction Local community governance is essential not only for the practice of good governance but also of economic growth and development. For this reason most of the developed countries of the world, irrespective of their political or economic systems, have a robust system of local or community governance. This also explains why many developing and former communist states have made solid efforts to enhance the capacities of their systems of local governance since the third wave of democratic revolution swept through the world in the 1980s and 1990s and the results have been quite impressive. Africa may be the only exception to this general principle even though there have been some progress as well in some countries. Unfortunately, Zimbabwe has not been part of the good news as far as the effort to enhance the capacity of local governance is concerned. It is ironic that over time, the resilient institutions of local governance that were inherited at independence have deteriorated over time-both in the cities or in the rural areas. It is even further ironic that though community organs were crucial during nationalist struggles in the countries in which political independence involved military engagement between occupying powers and...
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...Questions & Answers for mid-term examination Chapter 1: 1- List and describe four reasons why information systems are so important for business today? Answer: - Capital Management - Foundation of doing business - Productivity - Strategic opportunity and advantage 2- Describe five technology and business trends that have enhanced the role of information systems in today’s competitive business environment: Answer: (chapter 1: page 8) - Internet growth and technology convergence - Transformation of the business enterprise - Globalization - Rise of the information economy - Emergence of the digital firm 3- Describe the capabilities of a digital firm. Why are digital firms so powerful? Answer: - Digital firm is one in which nearly all of the organization’s significant business relationships with customers, suppliers, and employers are digitally enabled and mediated. - Digital firms are so powerful because all companies can use internet technology for e-commerce transactions with customers and suppliers, for managing internal business process, and for coordinating with suppliers and other business partners. E-commerce includes e-commerce as well the management and coordination of the enterprise. And also digital management of key corporate assets. 4- What is information system? Distinguish between a computer, a computer program...
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....................................................... 7 Chapter 1 Introduction to IBM ................................................................................................................................................ 7 Globalization................................................................................................................................................................................ 7 Technological Change: The Internet ................................................................................................................................ 7 Knowledge management ....................................................................................................................................................... 7 Collaboration across ''Boundaries''.................................................................................................................................. 7 Managing for Competitive Advantage ............................................................................................................................. 8 What is management all about? ......................................................................................................................................... 8 The four management functions........................................................................................................................................ 8 Management skills...
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...CHAPTER 19: QUALITY, TIME, AND THE THEORY OF CONSTRAINTS TRUE/FALSE 1. Shortening delivery times is a minor part of the quality improvement process. Answer: False Difficulty: 2 Objective: 1 Shortening delivery times is a major part of the quality improvement process. 2. ISO 9000 developed by the International Organization for Standardization is a set of five international standards for quality management adopted by more than 85 countries. Answer: True Difficulty: 2 Objective: 1 3. Quality of design measures how closely the characteristics of products or services meet the needs and wants of customers. Answer: True Difficulty: 2 Objective: 1 4. In the banking industry, depositing a customer's check into the wrong bank account is an example of quality of design failure. Answer: False Difficulty: 2 Objective: 1 This is an example of conformance quality failure. 5. Costs of quality (COQ) reports usually do not consider opportunity costs. Answer: True Difficulty: 2 Objective: 1 6. A control chart identifies potential causes of failures or defects. Answer: False Difficulty: 2 Objective: 2 This is a definition of a Pareto diagram. 7. A cause-and-effect diagram is used to help identify potential causes of defects. Answer: True Difficulty: 2 Objective: 2 8. Allocated cost amounts are an important determinant of the costs of a quality improvement program. Answer: False Difficulty:...
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...CHAPTER 22 MANAGEMENT CONTROL SYSTEMS, TRANSFER PRICING, AND MULTINATIONAL CONSIDERATIONS 22-1 A management control system is a means of gathering and using information to aid and coordinate the planning and control decisions throughout the organization and to guide the behavior of its managers and employees. The goal of the system is to improve the collective decisions within an organization. 22-2 To be effective, management control systems should be (a) closely aligned to an organization's strategies and goals, (b) designed to fit the organization's structure and the decision-making responsibility of individual managers, and (c) able to motivate managers and employees to put in effort to attain selected goals desired by top management. 22-3 Motivation combines goal congruence and effort. Motivation is the desire to attain a selected goal specified by top management (the goal-congruence aspect) combined with the resulting pursuit of that goal (the effort aspect). 22-4 The chapter cites five benefits of decentralization: 1. Creates greater responsiveness to local needs 2. Leads to gains from faster decision making 3. Increases motivation of subunit managers 4. Aids management development and learning 5. Sharpens the focus of subunit managers The chapter cites four costs of decentralization: 1. Leads to suboptimal decision making 2. Results in duplication of activities 3. Focuses managers’ attention on the subunit rather than the company as a whole ...
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...Chapter 1 Managerial Accounting and the Business Environment Solutions to Questions 1-1 Managerial accounting is concerned with providing information to managers for use within the organization. Financial accounting is concerned with providing information to stockholders, creditors, and others outside of the organization. 1-2 A strategy is a game plan that enables a company to attract customers by distinguishing itself from competitors. The focal point of a company’s strategy should be its target customers. 1-3 Customer value propositions fall into three broad categories—customer intimacy, operational excellence, and product leadership. A company with a customer intimacy strategy attempts to better understand and respond to its customers’ individual needs than its competitors. A company that adopts an operational excellence strategy attempts to deliver products faster, more conveniently, and at a lower price than its competitors. A company that has a product leadership strategy attempts to offer higher quality products than its competitors. 1-4 Managers carry out three major activities in an organization: planning, directing and motivating, and controlling. Planning involves establishing a basic strategy, selecting a course of action, and specifying how the action will be implemented. Directing and motivating involves mobilizing people to carry out plans and run routine operations. Controlling involves ensuring that the plan is actually carried out and is appropriately...
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...wiL1084x_fm_i-xxiv_1.indd Page i 1/10/11 7:53:00 PM user-f499 /Users/user-f499/Desktop/Temp Work/Don't Delete Job/MHBR231:Wild:203 Managerial Accounting John J. Wild University of Wisconsin at Madison Ken W. Shaw University of Missouri at Columbia 3 rd edition wiL1084x_fm_i-xxiv_1.indd Page ii 1/10/11 9:14:31 PM user-f499 /Users/user-f499/Desktop/Temp Work/Don't Delete Job/MHBR231:Wild:203 To my students and family, especially Kimberly, Jonathan, Stephanie, and Trevor. To my wife Linda and children, Erin, Emily, and Jacob. MANAGERIAL ACCOUNTING Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright 2012, 2010, 2007 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4 3 2 1 ISBN 978-0-07-811084-9 MHID 0-07-811084-X Vice president and editor-in-chief: Brent Gordon Editorial director: Stewart Mattson Publisher: Tim...
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...lost is a title of the book written by Johnson and Kaplan, where they were complaining that management accounting techniques emerged centuries ago, are still used, but they no longer relevant in today’s highly competitive environment. CHAPTER 5 - CONTROLLING THE MULTI DIVISIONAL ORGANIZATION 64. What are the two major obstacles to the success of the integrated firm? 1. Complexity - or the bureaucratic paralysis caused by complexity. 2. Management indifference to the owner's goals (p.94). This potential problem resulted when managers replaced owners in performing the managerial functions. 65. How did the integrated firms cope with these problems? Multi divisional firms might have developed better accounting systems, (e.g., using Church's ideas) but instead they coped with these obstacles using decentralization (p.94-96). In decentralized firms, top management plans strategy, while subordinate managers coordinate and control operating activities (p.97). 66. What was the New Use Developed For ROI? J&K indicate that ROI was used to delegate responsibility and allocate funds, i.e., capital (p.98). (Note: Technically, responsibility can be assigned, but not delegated. The authority to act on one's behalf can be delegated as when someone is hired to do a tax return, but the taxpayer is still responsible.) 67. Success of multi divisional firms depends on the management accounting system to perform three task better than the capital markets. What are they? 1. Provide...
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