Recent Developments and Emerging Business Practices

The continuing advancement in technology and changes in

management philosophy have paved the way for the introduction of
holistic management accounting systems used to generate information
for management decisions
 The Modern Business Environment
Managing had tremendously changed in the last three decades and has been disrupted in the
last ten years. The influential developments in technological revolution, especially in the
fields of electronics and biogenetic engineering, coupled with new and more sophisticated
needs and wants of customers have permanently refaced organizational structures, standards
, processes and practices

Speed and Accuracy = Quality

 Quality is what the customer says!
Quality may be associated with durability, color, size, thickness, price, delivery,
response time, relationship or any measure of satisfying customer’s needs. The
business of industrial and commercial companies is to satisfy wants, needs, desires,
and even vanity. Satisfying customer’s need means finding what the customer
wants.
 Table 12.2 Quality is What Customer Say
The Customer Says The Seller Says Quality means
• Power • Durability • Power
• Fashionability • Safety • Fashionability
• Portability • Bigness • Portability
• Comfort • Price • Comfort
• Precision • Usability • Precision
• Design • Color • Design
• Length • Thickness • Length
• Price • Excellent Materials • Price
The Paradigm shift… new way of thinking
The ability of the customer to fully exercise its right in the marketplace
coupled with the calculated consent of the seller to align its efforts with
what the buyer wants and needs have redefined management philosophies,
thinking, and ways of doing things.
 Table 12.3 Traditional Management vs. Strategic
Management
Point of Reference Traditional Management Strategic Management
Business Relationship • Independent companies • Interdependent companies
• Suppliers are evaluated as to their
reliability and credibility
Employees • individualism • Creative, innovative
• Takes responsibility and initiate endeavors
towards self-education and improvement
• Empowered
• Multi-skilled
• Participatory
• Demands for ownership(equity)
Activities • Input-output model
• Product-oriented
Methods • Inspection is made at the end of the process
• Organizational structure is hierarchical and
functional
• Production is labor-intensive
• Use of mechanical equipment and machineries
• Emphasis on company-customer relations
• Less investment in capital expenditures
• Generally, lesser cost of production in the short
run
• Output-input model
• Process-oriented
• Inspection is made before the process
• Lean and mean organizational system, system-based
• Production is technology-oriented
• Use of electronic and mechanical equipment and
machineries
• Emphasis on suppliers-company-customer relations
• Heavy investments in capital expenditures
• Generally lower cost of doing business in the long run

Managerial terms • Line and staff • Process re-engineering

• Job description • Process value analysis
• Product • Kaizen (continuous improvements)
• Standards • Benchmarking
• Lead time • Just-in-time
• Job order costing, process costing • Backflush costing
• Convenience-based management • Life-cycle costing
• Convenience-based costing • Activity-based costing and activity-based management
• Financial measures • Non-financial and non-quantitative measures
• Balance-scorecard
• Theory of constraints