Accounting 3020 Chapter 1 – Managerial Accounting and the Business Environment
Globalization The business world is global. International competition is everywhere. Many suppliers to U.S. companies are from other countries, especially China, India, and Mexico. Most of our Fortune 500 companies receive over half of their sales overseas.
Strategy Game plan that enables a company to attract customers by distinguishing itself from competitors. Three competitive reasons: –Customer intimacy –Operational excellence –Product leadership
Strategy- Organizational Structure Functional view of company Centralization vs. Decentralization Organization Charts Line and Staff Relationships Chief Financial Officer (CFO) and Controller Positions
Process Management Value chain (Exhibit 1-3) 1.Research and development 2.Product design 3.Manufacturing 4.Marketing 5.Distribution 6.Customer service
Process Management Lean Production Lean Thinking Model Just-in-Time (JIT) Philosophy –Pull-Approach –Inventory Minimization –Key Elements Improved plant layout Few reliable suppliers Total Quality Control Multi-skilled workers –Benefits
Process Management Supply Chain Management –Deals with the value chain –Ensuring quality along the value chain Theory of Constraints –You are only as good as your weakest link –Find the weak link and fix it and you will improve productivity Six Sigma –Formal system to improve quality
Importance of Ethics Increased Importance IMA Code of Ethics –Competence –Confidentiality –Integrity –Credibility Codes of Ethics – Company Codes of Conduct on the International Level
Other Topics Corporate Governance – the system by which a company is directed and controlled. –Sarbanes-Oxley Act of 2002 EXECUTIVES ARE NOW RESPONSIBLE FOR EVERYTHING IN THEIR FINANCIAL STATEMENTS!!!! EXECUTIVES SIGNING OFF ON FRAUDULENT STATEMENTS WILL GO TO CRIMINAL JAIL (NO COUNTRY CLUBS!) Enterprise Risk Management –Be aware of the potential risks –Try to have backup plans if plans fall through Corporate Social Responsibility –Concept whereby organizations consider the needs of all stakeholders when making decisions.
Certified Management Accountant (CMA) Exam 1.Business Analysis (Economics, Global business, internal controls, financial statement analysis) 2.Management Accounting and Reporting (Budgeting, etc.) 3.Strategic Management (Strategic planning, strategic marketing, corporate finance, decision analysis, investment decision analysis) 4.Business Applications (Above 3 sections + organization management, communications, behavioral issues and ethical considerations) Available through December 31, 2010
Certified Management Accountant (CMA) Exam 1.Financial Planning, Performance & Control 2.Financial Decision Making Available as of May 1, 2010