1.2 CONTEMPORARY BUSINESS ENVIRONMENT
CHANGES
Increased global competition
Lean manufacturing
advances in info technology, the internet & enterprise resource mgt
Changes in social, political & cultural environment of business
Growth of international mkts & trade
rise of worldwide economies
decline of trade barriers
ECONOMIC NATIONALISM
Ideology that promotes domestic economic growth & opposes globalization, free trade, and immigration
LEAN MANUFACTURING
JIT INVENTORY METHODS
Reduce cost & waste of maintaining large levels of materials & unfinished product.
Flexible manufacturing techniques
Reduce set up times
fast turnaround of cust orders
SPEED TO MKT
Deliver the product or service faster than the competition
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NEW ECONOMY
for communications
for sales
business data processing
REDUCES TIME FOR PROCESSING TRANSACTIONS
EXPAND ACCESS TO INFO WITHIN THE FRIM, THE INDUSTRY & THE BUSINESS INDUSTRY AROUND THE WORLD
Greater focus on customer
GLOBAL BUSINESS ENVIRONMENT
Growth of international markets & trade
Rise of economies throughout the world
Decline of trade barriers
Rapid growth of economic interdependence & increased competition from other countries
Consumers Benefit: low-cost, high-quality goods traded worldwide
Managers & Business Owners: know imp of pursuing sales & operating activities in foreign countries
Investors: benefit from the increased opportunities for investment in foreign firms.
June 2016 Brexit
Japanese man lean methods
cost & quality imp
quality teams & statistical quality control
Internet based firms Amazon, ebay
INCREASED EXP FOR PRODUCT FUNCTIONALITY & QUALITY
Shorter prod life cycle
CHANGED
FROM
Low cost prod of large quanties
TO
Quality
Service
Timeliness of delivery
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ability to respond to the customers' desire for specific features
Reports include specific measures of customer preferences & customer satisfaction.
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MGT ORG
CHANGING BECAUSE OF
TECHNOLOGY
MARKETING
MANUFACTURING PROCESSES
NOW
CUST SATISFACTION
Time to delivery
service
PREVIOUS
FINANCIAL & PROFIT BASED
Quality
HIERARCHICAL COMMAND AND CONTROL
FLEXIBLE ENCOURAGES TEAMWORK & CO-ORDINATION
New forms of mgt organization
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Ethically & racially diverse workforce
changes in regulatory requirements
sense of ethical responsibility among managers & employees
STRATEGIC FOCUS OF COST MGT
Identification of measures that are critical orgs success
STAGES OF SHIFT IN FOCUS
- Basic Transaction Reporting Systems
2 External Fin reporting...limited usefulness of cm
3 Systems track key operating data & info is developed
4 Strategically relevant info is INTEGRAL part of the system
Role: Measurement & Reporting
Role: Measurement & Reporting
Role: Operational Control
Role: integral, part of mgt teams
Role: Measurement & Reporting
IDENTIFY CRITICAL SUCCESS FACTORS
Financial & non financial
depends on nature of competiton
Measures of those aspects of the firm's performance that are ESSENTIAL to its COMPETITIVE ADV and success.