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Advantages and disadvantages of internal control systems
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1. Beltran’s strategic position is to be competitive by providing goods or services at lower costs than its competitors. In this scenario they have lower maintenance costs compared to the Quitax.
Qintax’s strategic position is being competitive by differentiation, which is providing faster & higher quality service to its customers than its competitor but at a premium price
A good example would be Dell compared to HP or Acer as they are well known for their after sales service, and their quality is better than other competing brands in the same market.
2. Quitax’s service reputation and the cost of maintenance are sources of value to the customer the quality of their products
Quitax’s faster delivery times also gives customer the impression
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The business would have to carry out changes in their business activities such as implementing new production processes, new software packages and introducing innovative human resource management policies. Information such as labour effectiveness & productivity should also be measured. Managers would need budgets from cost centres, performance reports & product cost from manufacturing department in a timely manner. There should be a pre-set allocation for defective units as a control measure for the supervisors to maintain the quality of the operation & the production. To reduce the cost of labour, labour hours should be also allotted efficiently. Supervisors and managers should calculate a rate at which labours are given the time to produce a given number of products in a given period of time so as to keep the staff cost to the set budget. These two control measures are very critical to the success and maintenance of the internal process. Control mechanisms ensure that operations proceed according to the plan and the objectives are …show more content…
As a result of this in the short run the business might show profits and would look good in the books, however in the long run the potential of growth from the opportunity cost might be lost.
Managers might set budgets that are too high or too low. If budgetary goal is easily achieved manager would lose interest and performance would decrease. On the other hand if the target is too high the manager might lose focus and performance would decrease. (Mowen, Hansen and Heitger 2009) The long run effect from these actions would be that the company would suffer from inefficient resource usage or allotment which in turn reduces
In this argument I will be focusing on Fox Car Rental, Inc. as the basis for a systematic analyses of the organization, as I identify the strength, weaknesses, opportunities, and threats to the existence of the organization and its operations. Also, I will be providing three pitfalls to strategic management. In order to facilitate my argument, the use of a strategic matrix analyses will be utilized.
Lower profit discourages investment and gives an appearance of poor performance despite how well the business is performing. Low margins also leave little room for market fluctuations and situations like holding inventory longer alone, may lead to profitability issues.
...price, it also allows for them to increase their sales and enter into new markets, which in turn would help to increase their profits.
A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.
...el – with its focus on yield, value-added services, high asset utilization and cost management
Since more than 40 years, Toyota Company was thinking how to develop the traditional process costing system and the production system. Some of the companies believe that the increasing of the production is a big profit, while Toyota proved the opposite. The more you increase the products out of the need of the market, the more losses you are going to gain. This kin...
Dell is one of the renowned companies in the world. If someone is asked to name the companies, which sell computers, he/she will definitely include the name of Dell (Martin 2002). In fact, it is widely accepted brand in the world. However, with the arrival of rival companies, post 2007, for Dell, it was testing to stay alive in the race in the computer industry. Dell in effect is acknowledged by some experts as one of the vulnerable brands. Hence, it would be preemptive for the corporation to continue to exist in the contest, where big companies, such as Apple and Acer have dominated the market by this
For example: with the increase of the number of products produced, the cost of operating a machine also increase. Second we have batch level costs which is associated with batches; producing a multiple units of the same product that are processed together is called a batch. The third type is product level costs which arise from any activity in order to support the production of products. The fourth and the last type is facility level costs, this costs cannot be determined with a particular unit, product or batch; this costs are fixed with respect to batches, products and number of units produced. A single measure of volume is used for allocating costs to each service or product in traditional method for example: direct material cost, machine hours, direct labor cost and direct labor hours. A cost driver is an activity that generate costs, it can be generated by two types of costs the first is a particular machine 's running costs where the costs is driven by production volume as machine hours; the second is quality inspection costs where the cost is driven by the number of times the relevant activity occurs as the number of
Making business decisions involves choosing between alternative courses of action. Many factors affect business decisions, yet analysis typically focuses on finding the alternative that offers the highest return on investment or the greatest reduction in costs. Some decisions are based on little more than an intuitive understanding of the situation because available information is too limited to allow a more systematic analysis. In other cases, intangible factors such as convenience, prestige, and environmental considerations are more important than strictly quantitative factors. In all situations, managers can reach a sounder decision if they identify the consequences of alternative choices in financial terms. This unit
Effective control process in an organization would help in gathering information about the process and the employees, this can further help the management whilst taking important decisions in terms of establishing standards to meet standards, measuring the actual performance, as well as comparing performance with the standards. It can further help the companies in achieving their optimum goals so that they can take corrective actions as and when required. The process controls in place and guide and provide the company with the required regulations of the company’s activities. Which can lead to the performance of the company, hence it will also help the organization in terms of monitoring and responding.
Finally, I have suggested some recommendations for the issues that I have mentioned above. In reference to the first issue, it will be profitable for the company to change to level monthly production.
“The Goal” is a book talking about challenges and problems that can face any plant manager. The story style used was very useful. I enjoyed the reading and gain more knowledge about the manufacturing operation. Many concepts and definitions were introduced such as the goal of any company and the its three measurements which are throughput, inventory and exponential expenses. Also, bottleneck and non-bottleneck resources.
Life is all about setting goals and trying to achieve them. The same theory also applies in the managerial industry. The accomplishment of desired results in a business is called performance. One of the major concerns of the top managers of a firm is the actual performance of the firm so its measurement is unavoidable.
It requires an adequate and sound organizational structure, that is, there must be a definite assignment of responsibility for each function of the enterprise. Budgeting compels all the members of management, from the top to bottom to participate in the establishment of goals and plans. Budgeting compels departmental managers to make plans in harmony with the other departments and of the entire enterprise. Budgeting helps the management to put down in figures what is necessary for a satisfactory performance. Budgeting helps the management to plan for the most economical use of labor, material and capital. Budgeting tends to remove the cloud of uncertainty that exists in many organizations, especially among lower levels of management, relative to basic policies and objectives. Budgeting promotes an understanding among members of management of their co-workers' problems. Budgeting force management to give adequate attention to the effects of general business conditions. Budgeting aids in obtaining bank credit as banks commonly require a projection of future operations and cash flows to support
Of greater importance, job-order costing system needs to accumulate three types of information which include direct materials, direct labor, and overhead. These factors are highly important essentially because of the significant variations in the products produced. Hence, each product or batch has a job identification number and costs are accumulated by a job number. All the more, job-order costing systems requires detailed accounting information and thus the total cost of all jobs is accumulated in one work-in process inventory control account; details of the cost materials, labor, and overhead for each job are kept in subsidiary records called job-order cost sheets (Edmonds, Tsay, & Olds,