Managerial Accounting in Managing Complex Organizations Research Paper

Essays on Managerial Accounting in Managing Complex Organizations Research Paper ï » ¿Managerial Accounting in Complex Organizations Contemporary developments in the organization and technology of manufacturing and in the deregulation of service industries are generating demand for entirely new approaches to cost accounting and managerial control. The traditional direct labor focus of most cost accounting systems has become obsolete in light of the much smaller ratio of labor to total manufacturing costs and the increased importance of capital costs and knowledge workers. Current research is exploring the initiatives of innovative organizations across a wide variety of industries to deal with these changes. The role of management accounting systems, including the use of multiple non-financial measures to supplement traditional profit and loss statements, is studied in relation to the firm's production, marketing and strategic goals. Accounting Data in Productivity Measurement and Strategic Decision Making As businesses strive to improve their profitability, it becomes vital to develop cost and profitability data that will support the firm's desire to promote their most profitable products and identify their most profitable market segments. Further, information needs to be collected and classified to ensure the firm's continuing commitment to enhanced productivity and adherence to budgeted performance. Research is focusing on the implications for a firm's cost accounting system of these demands for improved productivity and profitability measurements. Financial Reporting and Industrial Structure Discussions of financial accounting disclosure policy by regulatory bodies such as the S.E.C. and the F.A.S.B. are typically phrased in terms of the effect of such disclosure on the efficiency reporting firms is rarely considered because such effects are thought to be negligible. However, the information produced by a reporting firm is received by its competitors as well as investors. Recent research has studied the effect of different levels of mandated financial accounting disclosure on the behavior of the reporting firms. Of particular interest is whether the level of such disclosure increases the level of competition among the reporting firms, increases tacit collusion among them, or has no effect. These issues have been addressed using experimental markets. Empirical Evidence on the Relation of Accounting Information to Capital Market and Managerial Behavior Much work has studied the effect of publicly available information on the behavior of the stock market. One of the important sources of such information is the accounting data generated by a stream of recent research assesses how accounting information is processed in the capital market securities. Related research examines the capital income, cash flows, and accruals. This research focuses on the market properties of the components of accounting numbers such as information content and relative importance of one information cue vis-a-vis the others in pricing corporate securities. Another avenue of research evaluates the influence of managerial incentives and market/regulatory forces on managerial accounting choice decisions, such as accruals. Cash Flow Accounting and Its Structure While investment decisions are based on cash flow forecasts their consequences are evaluated on the basis of current earnings, which include many non-cash adjustments like depreciation. Such non-cash items are often quite subjective and susceptible to corporate discretion. It seems both feasible and desirable to build an accounting system that excludes such non-cash items, and is capable of providing a profitability indicator that is useful for performance evaluation. In this research, new concepts and measurement techniques are developed in order to construct such a system. Delegating the Choice of the Financial Accounting Method It is usually observed that shareholders delegate the choice of the financial accounting method to managers, and that the latter's compensation is at least partially based on the output of the chosen financial accounting method. But this seems to create incentives for managers to choose the financial accounting method in order to maximize their compensation, rather than to most accurately report the results of operations. Recent research addresses the question of why shareholders find this arrangement in their best interest. This research indicates that production distortions are created when the choice of the financial accounting method is delegated to either the manager or the shareholders. The delegation decision should therefore be based on minimizing these production distortions. This research establishes sufficient conditions under which it is optimal to delegate the choice of the financial accounting method to managers. The Returns to Monitoring and The Effect of Monitoring on Production and Allocation Distortions Much of the recent work in managerial accounting has been based on the principal-agent model in which managerial accounting systems are viewed as monitoring systems which produce information on which the principal (owner) and the agent (manager) base their contract. Recent research addresses whether the gross returns to monitoring are always concave, as they are assumed for other inputs, or whether they can be convex. It is found that the gross returns to monitoring an agent's private information can often be convex. In other words, the better the monitoring system, the more valuable it is to improve it. In addition, this research studies how improvements in a monitoring system affect the size of the production distortion and the excess return or rent earned by the agent on his private information. Collusion in Auditing Historically, auditing arose to overcome informational asymmetries between owners of resources and the managers who traded or transacted on their behalf. Therefore, the value of auditing depends crucially on whether the manager and the auditor collude. Recent research has studied a three-person problem consisting of an owner, a manager, and an auditor in which the latter two can collude against the former. The optimal owner-manager and owner-auditor contracts are characterized and the extent of distortion caused by the potential for collusion is studied. The optimal owner-manager contracts are similar to those found in the leasing of income producing assets such as retail space and mineral and oil deposits. In these instances, it is difficult for the owner to independently verify the amount earned by the asset and the manager can consume any amount not reported to the owner. Empirical Implications of Agency Theory and Their Impact On Management Control Systems Agency theory research focuses on the optimal contractual relationships among members of the firm, where each member is assumed to be motivated solely by sef-interest. Accounting researchers are interested in agency theory because it provides a model from which uses of managerial accounting information and managerial accounting systems can be derived and studies. Executive compensation contracts are important elements of management control systems and therefore, the compensation data can be used to empirically test the theoretical predictions of agency theory regarding the sensitivity of accounting based and non-accounting based performance measure to the total compensation package. A Contract Theory of Accounting and Control If organizations are seen as sets of contracts among economic agents who contribute resources and receive inducements in exchange, accounting and control systems can be seen as means of implementing and enforcing these contract sets. Various forms of accounting for a variety of organization types can be examined in terms of how they serve the following functions; (1) measuring the contribution of each agent; (2) determining and disbursing the contractual entitlement of each agent; (3) informing various agents about the extent to which other agents have fulfilled their contractual obligations and received their entitlement; (4) providing information to potential agents in order to maintain a liquid market for contractual slots or factor of production; and (5) providing a pool of common knowledge of verified information to all participants to facilitate negotiation and contract formation. This research examines various aspects of accounting practices and institutions in terms of this u nified economic model. Market for Information When asset markets reveal the private information possessed by the traders to other participants through price and other market variables, the ability of information produces to recover their cost through trading is attenuated. This research examines the complex interactions between, and equilibria in, the asset markets that reveal private information on one hand and markets for information on the other.

Consumer Society Is a Divided Society Free Essays

TMA 2 Consumption has great control on individual’s lives, the whole development, contemporary UK and the rest of the world. Consumer society is characterization used to explain a society that is defined by the way individuals acquire goods, how they use them and the disposal of these goods. (Hethering, 2009, p. We will write a custom essay sample on Consumer Society Is a Divided Society or any similar topic only for you Order Now 33). Consumption comprises of individual that acquire goods for personal use and those that acquire for manufacturing and resale. However Social Scientist comes in to try and analyse consumer behaviour when acquiring these goods. The question now is whether the consumer society is a divided society. Some view consumer society as divided society and others see it as a society that acquires goods for personal use and that reflects personality and individuality. For some consumer society is not only about purchasing good for essesntial use but also as a way of trying to get a sense of belonging in society. Social Scientist Zygmun possed a question on whether the ability to be part of a consumer society was equally available to everyone. (need referencing. )Bauman’s concept of seduced and repressesd consumers visualise inequalities and differences created by a consumer society. Bauman, claims that we live in a consumer society where divisions are entranched not by class, but by the economic ability to consume. (Hethering,2009,p. 25) Buman described the consumer society by dividing them into two group, the seduced and the repressed. The seduced being the weathy, highly paid professional. This group often run an expensive lifestyle, for example buying expensive houses, cars, designer clothes etc. The repressed as the ones that are not employed, on low paid jobs, the disabled and many others. Hethering,2009,p. 25). this concept in Bauman’s view reflects his understanding in consumer division. How to cite Consumer Society Is a Divided Society, Essay examples

Mountain Dew free essay sample

MOUNTAIN DEW: Selecting New Creative CASE STUDY SECTION A GROUP 5 Roll Numbers : FPM/04/005 (SUPRIYA K. K. ) PGP/14/005 (AMIT KUMAR) PGP/14/015 (ARITRA BASU ROY) PGP/14/025 (DEVARAJAN K) PGP/14/035 (KRISHNAN VR) PGP/14/045 (SAURABH MAHAJAN) PGP/14/055 (TANOY DHAR) Issues identified: 1. â€Å"Do the Dew† campaign was more than 8 years old. 2. Ads were becoming too predictable and repetitive. 3. Use of alternative sports was becoming predictable. 4. Increase in competition amongst CSD and non CSD categories. Increase in ad budgets by Competitors. Recommendations: Based on the analysis our recommendations for the AD’s to be selected for broadcasting at the Super Bowl are * Cheetah * Mock Opera The recommendations for broadcasting throughout the year 2000, based on the criteria listed above are, * Cheetah * Mock Opera * Showstopper Analysis: The STP Identified by the Mountain Dew Management for the financial year 2000:Objective: Expand appeal of Mountain Dew to new users while reinforcing it among current usersPositioning: To 18 year old males, who embrace excitement, adventure and fun, Mountain Dew is the great tasting carbonated soft drink that exhilarates like no other because it is energizing, hirst-quenching, and has a one-of-a-kind citrus flavor. We will write a custom essay sample on Mountain Dew or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Communication Strategy:   Symbolize that drinking Mountain Dew is an exhilarating experience. Target: Male Teens—18 year-old epicenter * Ensure appeal amongst 20-39 year olds (current users) * Drive universal appeal (white, African-American, Hispanic, and other ethnic) Product Benefits| Emotional Benefits| Personality | Energizing| Exhilaration| Irreverent| Quenching| Excitement| Daring| Great Taste| | Fun| | possible choice of ads, before Pepsico for the superbowl * Labor of Love * Cheetah Ad * Dew or Die * Mock Opera * Showstopper 3 to be chosen among the above 5 above which would enable Pepsico to project its new positioning while at the same time maintaining it existing users. Decision filters used to evaluate brand communications: 1. Market research carried out to assess brand health (KPIs) measures 2. Unofficial sources of information like websites, talk shows and other mass media 3. Official sources like brand’s 800 number and Mountain Dew website Evaluation of 5 Ad Campaigns: Labor of Love Pros * Conveys irreverence for rules * Consistent with humorous ad image Cons * Does not conveys product benefits * Involves risk in terms of alienating the existing consumers, especially during the Super Bowl. * Target positioning not clear * Humor may be taken in bad taste especially those with kids * Inconsistent with the brand STP Cheetah Ad Pros Consistent with the Dew Dudes image of wild, athletic, young and adventurous * Conveys exhilaration, excitement, daring and fun so consistent with the new positioning adopted * Focus on overall image perception of the consumer, no specific sport highlighted * Consistent with the Super Bowl energy and excitement * Potrayal of Cheetah will convey an universal imagery of energy ,athleticism which can appeal to all sections in the youth population (African Americans, Hispanics ,Whites and other ethnic). * Brings out the produc t benefit, like taste Consistent with the brand STP Cons * Like extreme sporting action, almost on similar lines with previous ads. Showstopper Pros * Cashes on the retro phenomenon * BMX riders and skate boarders represent fun, wild and athletic * Consistent with the brand STP Cons * Dew Dudes image not consistent * Does not convey excitement and exhilaration Mock Opera Pros * Conveys irreverence with the parody * The athletic action relates to the present Dew image * Consistent with the brand STP Cons * Does not convey exhilaration as much as previous extreme sport ads Dew or Die Pros Consistent with Dew Dude image showcasing exhilaration, daredevilry, excitement and fun * Showcasing competitive spirit Cons * Loses on product benefit attributes * Cliched ad, low on creativity, will not appeal much to the target audience * Inconsistent with brand STP The decision filters used by us: 1. Target positioning being followed a. Universal consumer appeal across different ethnic groups b. Leveraging and developing further on the strengths of the brand image c. Ensuring brand consistency with the existing consumers 2. Consistency of the ad with the product benefits, emotional benefits and personality