1. Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Prologue Managerial Accounting and the Business Environment PowerPoint Authors: Jon A. Booker, Ph.D., CPA, CIA Charles W. Caldwell, D.B.A., CMA Susan Coomer Galbreath, Ph.D., CPA

2. P-2 Strategy A strategy is a “game plan” that enables a company to attract customers by distinguishing itself from competitors. Customer Intimacy Operational Excellence Product Leadership

3. P-3 Organizational Structure An organization is a group of people united for a common purpose. Decentralization decision–making

4. P-4 Value Chain Research and Production Product Design ManufacturingManufacturingMarketingMarketingDistributionDistribution Customer Service Business Functions Making Up the Value Chain A value chain consists of the major business functions that add value to a company’s products and services.

5. P-5 Lean Production Traditional Thinking Minimize unit costs by maximizing output. Keep everyone busy. Idleness wastes money. Push products through the system even if unsold inventory piles up in warehouses.

6. P-6 Lean Production Step 1 Identify value in specific products and services Step 2 Identify the business process that delivers value Step 3 Organize work arrangements around the flow of the business process Step 4 Create a pull system that responds to customer orders Step 5 Continuously pursue perfection in the business process

7. P-7 Supply Chain Management The term supply chain management is commonly used to refer to the coordination of business processes across companies to better serve end consumers.

8. P-8 Theory of Constraints (TOC) A sequential process of identifying and removing constraints in a system. Restrictions or barriers that impede progress toward an objective

9. P-9 Theory of Constraints (TOC) Step 1 Identify the weakest link in the chain, which is the constraint Step 2 Do not place a greater strain on the system than the weakest link can handle Step 3 Concentrate improvement efforts on strengthening the weakest link Step 4 If improvement efforts are successful, the weakest link will improve

10. P-10 Six Sigma Six Sigma is sometimes associated with the slogan zero defects. A process improvement method that relies on customer feedback and fact-based data gathering and analysis techniques to drive process improvements.

11. P-11 Code of Conduct for Management Accountants – IMA’s Statement of Ethical Professional Practice Part One Competence Confidentiality Integrity Credibility Part Two Resolution of Ethical Conflict

12. P-12 The Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 is intended to protect the interests of those who invest in publicly traded companies by improving the reliability and accuracy of corporate financial reports and disclosures.

13. P-13 Identifying and Controlling Business Risks

14. P-14 Corporate Social Responsibility CSR extends beyond legal compliance to include voluntary actions that satisfy stakeholder expectations. Corporate social responsibility (CSR) is a concept whereby organizations consider the needs of all stakeholders when making decisions. Corporate social responsibility (CSR) is a concept whereby organizations consider the needs of all stakeholders when making decisions. CustomersEmployeesCommunitiesSuppliersStockholders Environmental & Human Rights Advocates

15. P-15

16. P-16 End of Prologue