Please enable JavaScript.
Coggle requires JavaScript to display documents.
Chapter 1 : Introduction to Managerial Accounting and Business Environment…
Chapter 1 : Introduction to Managerial Accounting and Business Environment
1.1 Nature of cost and management accounting in the globalization management environment
GLOBAL COMPETITION
Organizations began to encounter severe competition from overseas
competitors that offered high-quality products at low prices.
Manufacturing companies can now establish global networks for acquiring raw
materials and distributing goods overseas
Service organizations can communicate with overseas offices instantaneously
using video conferencing technologies.
These changes have enabled competitors to gain access to domestic markets throughout the world. They have to compete against the best companies in the world.
ADVANCES IN MANUFACTURING TECHNOLOGIES
Companies must be capable of manufacturing innovative products of high quality at a low cost, and also provide a first-class customer service
Excellence in manufacturing can provide a competitive weapon to compete in sophisticated worldwide markets.
Must be flexible to cope with short product life-cycles, demand for greater product variety from more discriminating customers and increasing international competition.
THE IMPACT OF INFORMATION TECHNOLOGY
Use of IT to support business activities has increased dramatically and the development of electronic business communication technologies known as e-business, e-commerce or internet commerce have had a major impact.
For example, consumers are more discerning in their purchases because they can access the internet to compare the relative merits of different products.
Internet trading allows buyers and sellers to make transactions from diverse locations in different parts of the world.
ENVIRONMENTAL ISSUES
Environmental management accounting is becoming increasingly important in many organization
Regulatory requirements involving huge fines for non-compliance have increased significantly.
Society is demanding that companies focus on being environmentally friendly, therefore it can also improve their image and enhances their ability to sell their products and services.
Companies develop systems of measuring and reporting environmental costs, the consumption of scarce environmental resources and details of hazardous materials used or pollutants emitted to the environment
Managers are able to redesign processes to minimize the usage of scarce environmental resources and the emission pollutants, to make more sensitive environmental decisions.
CUSTOMER ORIENTATION
Companies have had to become more customer-driven and to recognize that customers are crucial to their future success.
Companies will make customer satisfaction an overriding priority and to focus on identifying and achieving the key success factors that are necessary to be successful in today’s competitive environment
E.g. Key success factors – Cost Efficiency, Quality, Innovation and Continuous improvement.