Professional Documents
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Chap 001 Garrison 11th Edition
Chap 001 Garrison 11th Edition
Chapter 1
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Copyright2006,TheMcGrawHillCompanies,Inc.
Work of Management
Planning
Planning
Directing
Directing and
and
Motivating
Motivating
Controlling
Controlling
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Planning
Identify
Identify
alternatives.
alternatives.
Select
Select alternative
alternative that
that does
does
the
the best
best job
job of
of furthering
furthering
organizations
organizations objectives.
objectives.
Develop
Develop budgets
budgets to
to guide
guide
progress
progress toward
toward the
the
selected
selected alternative.
alternative.
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Controlling
The
The control
control function
function ensures
ensures
that
that plans
plans are
are being
being followed.
followed.
Feedback
Feedback in
in the
the form
form of
of performance
performance reports
reports
that
that compare
compare actual
actual results
results with
with the
the budget
budget
are
are an
an essential
essential part
part of
of the
the control
control function.
function.
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Decision
Making
Exh.
1-1
Begin
Implementing
Implementing
plans
plans(Directing
(Directing
and
andMotivating)
Motivating)
Measuring
Measuring
performance
performance
(Controlling)
(Controlling)
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McGrawHill/Irwin
Exh.
1-2
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Organizational Structure
Decentralization
Decentralization is
is the
the delegation
delegation of
of decisiondecisionmaking
making authority
authority throughout
throughout an
an organization.
organization.
C o r p o r a te O r g a n iz a tio n C h a r t
B o a r d o f D ir e c t o r s
P r e s id e n t
P u r c h a s in g
P e rs o n n e l
V ic e P r e s id e n t
O p e r a t io n s
C h ie f F in a n c ia l
O f f ic e r
T re a s u re r
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C o n t r o lle r
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Just-in-time
Just-in-time production
production
Total
Total quality
quality management
management
Process
Process reengineering
reengineering
Theory
Theory of
of constraints
constraints
International
International competition
competition
E-commerce
E-commerce
McGrawHill/Irwin
Business environment
changes in the past
twenty years
Copyright2006,TheMcGrawHillCompanies,Inc.
Complete
Complete products
products
just
just in
in time
time to
to
ship
ship customers.
customers.
Schedule
Schedule
production.
production.
Receive
Receive materials
materials
just
just in
in time
time for
for
production.
production.
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Complete
Complete parts
parts
just
just in
in time
time for
for
assembly
assembly into
into products.
products.
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JIT Consequences
Improved
Improved
plant
plant layout
layout
Reduced
Reduced
setup
setuptime
time
Zero
Zero production
production
defects
defects
Flexible
Flexible
workforce
workforce
JIT
JIT purchasing
purchasing
Fewer,
Fewer, but
but more
more ultrareliable
ultrareliable suppliers.
suppliers.
Frequent
Frequent JIT
JIT deliveries
deliveries in
in small
small lots.
lots.
Defect-free
Defect-free supplier
supplier deliveries.
deliveries.
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Freed-up
Freed-up funds
funds
Greater
Greater
customer
customer
satisfaction
satisfaction
Higher quality
products
Increased
throughput
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More
More rapid
rapid
response
response to
to
customer
customer orders
orders
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Continuous
Improvement
Systematic
problem solving
using tools such
as benchmarking
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is
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Process Reengineering
AAbusiness
businessprocess
process
is
isdiagrammed
diagrammed
in
indetail.
detail.
Every
Everystep
step in
in
the
thebusiness
business
process
processmust
must
be
bejustified.
justified.
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Anticipated
Anticipated results:
results:
Process
Processis
issimplified.
simplified.
Process
Processis
iscompleted
completed
in
inless
lesstime.
time.
Costs
Costsare
arereduced.
reduced.
Opportunities
Opportunitiesfor
for
errors
errorsare
arereduced.
reduced.
The
Theprocess
processis
isredesigned
redesigned
to
to eliminate
eliminate all
all
non-value-added
non-value-added activities
activities
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Theory of Constraints
A constraint (also called a bottleneck) is anything that
prevents you from getting more of what you want.
The
The constraint
constraint in
in aa system
system is
is determined
determined
by
by the
the step
step that
that has
has the
the smallest
smallest capacity.
capacity.
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Theory of Constraints
Only actions
that strengthen
the weakest link
in the chain
improve the
process.
2.
2.Allow
Allow the
the
weakest
weakestlink
link to
to
set
set the
thetempo.
tempo.
3.
3. Focus
Focus on
on
improving
improving
the
theweakest
weakest
link.
link.
1.
1.Identify
Identifythe
the
weakest
weakest link.
link.
4.
4.Recognize
Recognizethat
that
the
theweakest
weakest link
link
is
isno
nolonger
longerso.
so.
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International Competition
Increasing
Increasing sophistication
sophistication
in
in international
international markets.
markets.
Fewer
Fewer tariffs,
tariffs,
quotas,
quotas, and
and
other
other barriers
barriers
to
to free
free trade.
trade.
Competition has
become worldwide
in most industries.
Improvements
Improvements
in
in global
global
transportation
transportation
systems.
systems.
An
An excellent
excellent management
management accounting
accounting system
system is
is needed
needed
to
to succeed
succeed in
in todays
todays competitive
competitive global
global marketplace.
marketplace.
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E-Commerce
In recent years, many dot.com
businesses failed that might have
benefited from the application of
managerial accounting tools:
Cost concepts (Chapter 2)
Cost estimation (Chapter 5)
Cost-volume-profit (Chapter 6)
Activity-based costing (Chapter 8)
Budgeting (Chapter 9)
Decision-making (Chapter 13)
Capital budgeting (Chapter 14)
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Competence
Competence
Prepare
Preparecomplete
completeand
andclear
clear
reports
reports after
after appropriate
appropriate
analysis.
analysis.
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Confidentiality
Confidentiality
Ensure
Ensure that
thatsubordinates
subordinatesdo
do
not
not disclose
disclose confidential
confidential
information.
information.
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Integrity
Integrity
Recognize
Recognizeand
and
communicate
communicatepersonal
personal and
and
professional
professional limitations.
limitations.
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Refuse
Refuse gifts
gifts
or
or favors
favors
that
thatmight
might
influence
influence
behavior.
behavior.
Integrity
Integrity
Communicate
Communicate
unfavorable
unfavorableas
aswell
wellas
as
favorable
favorable information.
information.
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Communicate
Communicate information
information
fairly
fairlyand
and objectively.
objectively.
Objectivity
Objectivity
Disclose
Disclose all
all information
information
that
thatmight
might be
beuseful
usefulto
to
management.
management.
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Codes of Conduct on
the International Level
The
The Guidelines
Guidelines on
on Ethics
Ethics for
for Professional
Professional
Accountants,
Accountants, issued
issued by
by the
the International
International
Federation
Federation of
of Accountants
Accountants (IFAC),
(IFAC), govern
govern the
the
activities
activities of
of professional
professional accountants
accountants worldwide.
worldwide.
In
In addition
addition to
to competence,
competence, objectivity,
objectivity, independence,
independence,
and
and confidentiality,
confidentiality, the
the IFACs
IFACs code
code deals
deals with
with
the
the accountants
accountants ethical
ethical responsibilities
responsibilities in:
in:
Taxes
Taxes
Fees
Fees and
and commissions
commissions
Advertising
Advertising and
and solicitation
solicitation
Handling
Handling of
of monies
monies
Cross-border
Cross-border activities.
activities.
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A
A management
management accountant
accountant
who
who has
has the
the necessary
necessary qualifications
qualifications and
and
who
who passes
passes aa rigorous
rigorous professional
professional exam
exam earns
earns
the
the right
right to
to be
be known
known as
as aa Certified
Certified
Management
Management Accountant
Accountant (CMA).
(CMA).
Information
Information about
about becoming
becoming aa CMA
CMA and
and the
the CMA
CMA
program
program can
can be
be accessed
accessed on
on the
the IMAs
IMAs website
website at
at
www.imanet.org
www.imanet.org or
or by
by calling
calling 1-800-638-4427.
1-800-638-4427.
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End of Chapter 1
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