1 - 1 ©2003 prentice hall business publishing, cost
TRANSCRIPT
1 - 1©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Key Themes in ManagementDecision Making
Key Themes in ManagementDecision Making
Customer Focus
Value Chainand
Supply ChainAnalysis
Key Success Factors:Cost and Efficiency,
Time, Quality,Innovation
ContinuousImprovement
andBenchmarking
1 - 2©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Customer FocusCustomer Focus
The challenge facing managers is to continueinvesting sufficient (but not excessive)
resources in customer satisfactionsuch that profitable customers
are attracted and retained.
The challenge facing managers is to continueinvesting sufficient (but not excessive)
resources in customer satisfactionsuch that profitable customers
are attracted and retained.
1 - 3©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value Chain andSupply Chain Analysis
Value Chain andSupply Chain Analysis
This theme has two related aspects:
1. Treat each of the business functions in the value chain as an essential and valued contributor.1. Treat each of the business functions in the value chain as an essential and valued contributor.
2. Integrate and coordinate the efforts of all business functions in addition to developing the capabilities of each individual business function.
2. Integrate and coordinate the efforts of all business functions in addition to developing the capabilities of each individual business function.
1 - 4©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value Chain andSupply Chain Analysis
Value Chain andSupply Chain Analysis
Supply chain – describes the flow of goods,services, and information from cradle to grave,regardless of whether those activities occur inthe same organization or other organizations.
Supply chain – describes the flow of goods,services, and information from cradle to grave,regardless of whether those activities occur inthe same organization or other organizations.
1 - 5©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Key Success FactorsKey Success Factors
These are operational factors that directly affectthe economic viability of the organization.
Cost – organizationsare under continuous
pressure to reduce costs.
Cost – organizationsare under continuous
pressure to reduce costs.
Quality – customersare expecting higher
levels of quality.
Quality – customersare expecting higher
levels of quality.
1 - 6©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Key Success FactorsKey Success Factors
Time – organizations are under pressure tocomplete activities faster and to meet
promised delivery dates more reliably.
Time – organizations are under pressure tocomplete activities faster and to meet
promised delivery dates more reliably.
Innovation – there is now heightened recognitionthat a continuing flow of innovative products
or services is a prerequisite to the ongoingsuccess of most organizations.
Innovation – there is now heightened recognitionthat a continuing flow of innovative products
or services is a prerequisite to the ongoingsuccess of most organizations.
1 - 7©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Continuous Improvementand Benchmarking
Continuous Improvementand Benchmarking
Continuous improvement by competitors createsa never-ending search for higher levels ofperformance within many organizations.
Continuous improvement by competitors createsa never-ending search for higher levels ofperformance within many organizations.
1 - 8©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value ChainValue Chain
The term “value chain” refers to the sequence ofbusiness functions in which usefulness is addedto the products or services of an organization.
The term “value” is used because as the usefulnessof the product or service is increased, so is its value
to the customer.
1 - 9©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value ChainValue Chain
Management accountants providedecision support for managers in the
following six business functions:
1 - 10©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value ChainValue Chain
R & D Design Production
Marketing Distribution Service
Management Accounting
1 - 11©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value Chain FunctionsValue Chain Functions
Research and Development
It is the process that is conducted to generateand experiment with ideas related to new
products, services, or processes.
1 - 12©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value Chain FunctionsValue Chain Functions
It is the detailed planning and engineering of products, services, or processes.
Design
1 - 13©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value Chain FunctionsValue Chain Functions
It is the acquisition, coordination, andassembly of resources to produce
a product or deliver a service.
Production
1 - 14©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value Chain FunctionsValue Chain Functions
It is the manner by which companiespromote and sell their products
or services to customers or prospective customers.
Marketing
1 - 15©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value Chain FunctionsValue Chain Functions
It is the delivery of products orservices to the customer.
Distribution
1 - 16©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Value Chain FunctionsValue Chain Functions
It is the after-sale support activitiesprovided to customers.
Service
1 - 17©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Key GuidelinesKey Guidelines
1. Cost-benefit approach
2. Full recognition of behavioral as well as technical considerations
3. Using different costs for different purposes
1 - 18©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Cost-Benefit ApproachCost-Benefit Approach
A cost-benefit approach should be used in orderto spend resources if they promote decisionmaking that better attains organization goals
in relation to the costs of those resources.
1 - 19©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Behavioral and TechnicalConsiderations
Behavioral and TechnicalConsiderations
A management accounting system should have twosimultaneous missions for providing information:
1. To help managers make wise economic decisions
2. To help managers and other employees to aim and strive for goals of the organization
1 - 20©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Different Costs forDifferent PurposesDifferent Costs forDifferent Purposes
A cost concept used for the external reportingpurpose need not be the appropriate conceptfor the purpose of internal routine reporting
to managers.
1 - 21©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Line and Staff RelationshipsLine and Staff Relationships
Line management is directly responsible forattaining the objectives of the organization.
Staff management exists to provide adviceand assistance to line management.
1 - 22©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Line and Staff RelationshipsLine and Staff Relationships
C o n tro ller A u d it T a x T rea su ry R iskM a n a g em en t
In v esto rR ela tio n s
C h ief F in a n cia l O fficer (C F O )
P res id en tC h ief O p era tin g O fficer (C O O )
C h a irm a nC h ief E x ecu tiv e O fficer (C E O )
B o a rd o f D irecto rs
1 - 23©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Line and Staff RelationshipsLine and Staff Relationships
* G lo b a l F in a n cia l P la n n in g /B u d g etin g* O p era tio n s A d m in is tra tio n* P ro fita b ility R ep o rtin g* In v en to ry
* R o y a lties* G en era l L ed g er* A cco u n ts P a y a b le a n d R eceiv a b le* S u b s id ia ry a n d L ia iso n A cco u n tin g
E x a m p les o f F u n ctio n s:
C o n tro ller
1 - 24©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Professional EthicsProfessional Ethics
Confidentiality
Integrity
Objectivity
Competence
1 - 25©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
Ethical GuidelinesEthical Guidelines
The Institute of Management Accountants (IMA)is the largest association of management
accountants in the United States.
The IMA has issued a Standards of EthicalConduct for Management Accountant.