MANAGEMENT ACCOUNTING Essay Example | Topics and Well Written Essays - 2000 words - 2

MANAGEMENT ACCOUNTING - Essay Example â€Å"Costing is a powerful tool that helps managers to discover the true costs of products† (Ledgerwood & White 2008, p.317). Relying on the given case of the building firm â€Å"Home improvements and Extensions Ltd† we can consider different constructive costs. A firm may incur various types of operational costs during the course of their day to day business operations. In order to design situational business strategies and thereby fit the organizational interests into the persisting demand conditions, every corner of operational costs has to be essentially identified by a firm. According to Truett & Truett (2008), a firm may experience different types of costs such as ‘historical costs, opportunity costs, fixed costs, variable costs, incremental costs, private costs, and social costs’ (p.223). The explanations and reasons of variations of these costs are described below with suitable examples from construction industry. Historical cost: It is the cost incurred by the firm during the course of their operations for which the firm has either paid completely in the past or promised to pay in future. Historical cost is recorded in the books of accounts of the firm and is used for the preparation of income statement at the end of the financial period. It includes rent and interest payments, wages and salaries to the labors, and cost of raw materials. Historical cost may vary according to the market demand for the services of the construction firm. Opportunity costs: It is the implicit cost incurred by the firm if the business had employed to next best opportunity. Although opportunity cost is an imaginary cost, it is necessary for calculating the net income from operations. Implicit salary income to the directors and implicit interest income on capital are some of the examples for opportunity costs. It may fluctuate according to management strategies and

Small Group and Team Communication Essay Example | Topics and Well Written Essays - 1250 words

Small Group and Team Communication - Essay Example Effective group decision making is based on cooperation and mutual agreements, trust and effective communication between team members. Salaman (2001) underlines that the ideal decision-making (group or individual) is unrealistic because change leads to uncertainty, and there is less uncertainty in the short run than in the long run. He uses examples of business failures to portray ineffective decision-making processes based on decision-making norms rather than careful analysis of the situation. Salaman (2001) states that: "central to decision-making is the notion of rationality. Rationality refers to the quality of thinking and decision-making" (p. 2). Organizations can be pretty sure that whatever long-term guesses they make will be wrong. Unfortunately, most worthwhile achievements are carried out in the long run and consequently require a long-term outlook (Fitzsimmons & Fitzsimmons 2004). Also, the ideal decision-making is impossible because of substantive rationality. Following Weber: "[decision-making] conveys only one element common to all the possible empirical situations" (Salaman 2001, p. 3). The departure often leads to painful changes in the project requirements, which are in turn important contributors to time and cost overruns. In this situation, long-term considerations are sacrificed to short-term exigencies. The corporate culture must extol the virtues of a long-term outlook. ... The best way to let people know the importance of this outlook to the organization is to create incentive systems that reward long-term behavior and to develop organizational structures that make it difficult to be a short-termer. A customer-focused culture requires a new attitude toward customers. Team and group decision making involves co-acting members with specialized knowledge, interacting to arrive at some valued decisions or outcomes. Teams have accountable membership, often work in unpredictable ambiguous environments, and process information (or enact various functions) for variable lengths of time. Team decision making is further complicated when it is supported by technology, such as decision support systems that are comprised of decision aids, informational data bases, computers, intercoms, telephones, video, and so forth. Decision making, as a term, no longer adequately fits the expanded activities that the team undertakes to solve a problem or reach an intended goal. In tellectual teamwork is possibly a better term to describe team decision making in technologically supported environments (Jeynes, 2002). Within this process, ethics becomes a crucial part guarding and controlling decision-making process. Ethics is as a set of moral principles that govern the action of an individual or group. Business ethics are concerned with truth and justice and include aspects which society expects. Two themes which emerged in literature are the role of the victim in the criminal justice system and the use of the criminal law as a resource. Decision analysis is a set of models and methods for helping people deal with difficult and stressful decisions (Hicks, 2004). The operating assumption of decision analysts is that a decision maker wishes to select the