DISCUSSION Reply ASSIGNMENT INSTRUCTIONS
reply of 350-400 words to each ( two bellow) classmate’s thread.
In your threads, (initial post and replies to peers’ posts) synthesize course material and demonstrate critical thinking, graduate-level writing skills, and reflection.
· Cite the textbooks and scholarly articles from professional accounting and business journals.
For each reply, reference the textbooks, at least 2 journal articles, and the correlated thread. Opinion is worth little unless it is supported by quotes and/or paraphrases from textbooks and professional journals. Adhere to current APA format in all posts. Note that management techniques must not be capitalized. Consult the grading rubrics to see how you will be graded.
Reply to:
Classmate 1 AND Classmate 2 reply of 350-400 words to each
CLASSMATE 1 :
My preferred company is Amazon, and the modern management style I'll concentrate on is Total Quality Management. To say Amazon is a well-known firm would be an understatement. Amazon is an e-commerce and technology company noted for its large product range, quick shipping, and, most crucially, its revolutionary business model. Their essential success criteria include preserving client trust, delivering items on schedule, ensuring quality, and efficiently managing a complex supply chain. Total Quality Management is a modern management style that emphasizes continual improvement, customer happiness, and the participation of all employees in quality improvement activities. It aims to decrease flaws, optimize processes, and improve the overall quality of products and services.
Based on my research, I feel that TQM can be a good influence in assisting Amazon to achieve key achievement and, ultimately, optimize their entire brand success. Research suggests that “organizations implement TQM in order to gain competitive advantage in terms of quality, productivity, customer satisfaction, and profitability” (Shafiq et al., 2019). TQM strongly resembles Amazon's customer-centric approach, stressing customer pleasure and trust through continuous improvements in product quality and service levels. Similarly, TQM focuses on process improvement, which may be extremely beneficial to Amazon's supply chain and logistics operations, contributing to more reliable and efficient product deliveries, which are critical to success in the e-commerce market.
TQM also includes quality control concepts. From my research, I found that “TQM aims at enhancing quality to meet customer demand and thus can achieve excellence in firm performance” (Wei et al., 2019). As a result, TQM's quality control principles can help Amazon reduce customer complaints, refunds, and product quality issues, which are all crucial to the company's brand. Employee participation in TQM supplements Amazon's huge workforce, enabling a more flexible and responsive organization capable of efficiently handling consumer requests and operational challenges. TQM's commitment to continuous improvement is complemented by Amazon's reputation for ongoing innovation, allowing the company to stay ahead of the competition.
To summarize, Total Quality Management ideally aligns with Amazon's core success elements, which include customer satisfaction, quality maintenance process improvement, and staff engagement. TQM's customer-centric approach helps Amazon sustain trust and loyalty. Similarly, it “provides the capabilities for continuous product and service quality improvement, reinforcing Amazon's brand and assuring customer pleasure” (Singh et al, 2023). Furthermore, TQM assists Amazon's complicated supply chain and logistics operations in focusing on process refinement details. TQM may improve the dependability and efficiency of product deliveries by optimizing these processes, which is critical in the competitive e-commerce industry.
TQM's strict quality control results in fewer customer complaints, returns, and product faults, preserving Amazon's reputation. TQM's employee engagement strategy also mobilizes Amazon's enormous workforce to identify and address issues, allowing the company to become more adaptable and responsive to consumer requests and operational challenges. Finally, TQM's general dedication to continuous improvement is consistent with Amazon's culture of innovation, allowing the corporation to stay ahead of the competition. Amazon can optimize operations, minimize waste, and enhance cost-efficiency by using TQM concepts to its complex supply chain, ensuring products are delivered more effectively. In summary, TQM greatly strengthens Amazon's pursuit of crucial success criteria in e-commerce and technology, hence promoting long-term success. 1 Peter 3:8 says “Finally, all of you, be like-minded, be sympathetic, love one another, be compassionate and humble.” The bible urges us to come together and work together for a greater purpose, similarly to how we should in business endeavors when trying to enhance our business practices. Be blessed!
References
Shafiq, M., Lasrado, F., & Hafeez, K. (2019). The effect of TQM on organisational performance: Empirical evidence from the textile sector of a developing country using SEM. Total Quality Management & Business Excellence, 30(1-2), 31-52. https://doi.org/10.1080/14783363.2017.1283211 Links to an external site.
Wei, J., Chang, Y. W., Zhang, X., Wu, H., & Tang, Y. (2019). Performance measurement systems, TQM and multi-level firm performance: A person-organisation fit perspective. Total Quality Management & Business Excellence, 30(15-16), 1578-1595. https://doi.org/10.1080/14783363.2017.1384311 Links to an external site.
Singh, N., & Arora, S. (2023). Recognizing the legacy of the TQM journal: A bibliometric analysis of Scopus indexed publications (2008 – 2021). TQM Journal, 35(4), 946-963. https://doi.org/10.1108/TQM-01-2022-0002
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Classmate 2
The automotive industry has a contemporary business environment for manufacturing that focuses on the basis of competition and the manufacturing process (Blocker et al., 2022, p. 12). This emphasizes automotive companies to be competitive by producing a new model of its more popular vehicles every year. Toyota is no exception to this focus of vehicle production and the frequency in which the company releases its latest models of their popular style of vehicles. It helps to improve the quality of their products and the satisfaction customers have while using them. Due to the type of business environment that Toyota is in, the one contemporary management technique that would be a beneficial influence for the company’s critical success factors would be the life-cycle costing method (Blocker et al., 2022, p. 15). The life-cycle cost technique would be positive influence on Toyota’s critical success factors that are evolving in the automotive industry as investors are looking towards sustainable approaches which includes ventures into vehicles that help combat climate change (Gedam et al., 2021).
The life-cycle cost method would benefit Toyota the most because the company needs to know if certain upgrades to any of their vehicle models will result in profit and benefit to their critical success factors for the company or cost too much to make it worth its time to pursue. One of the upgrades that could help Toyota involves their current hybrid vehicle fleets, considering the latest push in the electric vehicle market. Though there are many benefits to transitioning from petroleum powered vehicles to strictly electric powered vehicles, the quick transition that the market has seen can start to have short term negative impacts. For example, the additional cost to consumers and an infrastructure not yet widely available to refuel the vehicles as petroleum stations (Al-Alawi & Bradley, 2013). The life-cycle costing method will help Toyota understand if this upgrade in their fleet to completely electric vehicles would be a profitable strategy for the company to implement.
The life-cycle cost method can be beneficial to Toyota’s critical success factors as well as any company in the automotive industry because the industry’s contemporary business environment and the continual drive to bring upgraded vehicle models to the market every year. Though the method is a positive tool for the industry to use for any company’s vehicle models and the upgrades that they can make to their annual releases, it would be a very helpful for Toyota to use as the consumers’ and investors’ preferences shift to a more sustainable focus. A look into what models and options Toyota can make to their vehicles and the life-cycle cost of those choices would allow the company to make the decision of which route would lead to the greatest positive impact to their critical success factors. Some routes explored previously have found that some electric vehicles have a similar life-cycle cost as the standard vehicle which would have a more significant impact to the company’s critical success factors than other choices available to Toyota and the upgrades to their vehicle models (Lin et al., 2013).
Isaiah 46:4 states, “I will be your God throughout your lifetime—until your hair is white with age. I made you, and I will care for you. I will carry you along and save you” (New Living Translation, 2007). Just like the God has made us, upheld us, and delivered us, automotive companies do the same for their vehicles. The life-cycle costing method is the perfect way to understand how impactful a product’s cradle to grave manufacturing will have on the critical success factors in their industry. It will allow the company to have vital knowledge if a product is worth their continual investment and upgrade of the vehicle or if it is time for the model to be discontinued and shift focus to a better selling and lower life-cycle cost model.
References
Al-Alawi, B. M., & Bradley, T. H. (2013). Review of hybrid, plug-in hybrid, and Electric Vehicle Market Modeling Studies. Renewable and Sustainable Energy Reviews, 21, 190–203. https://doi.org/10.1016/j.rser.2012.12.048
Blocher, E. J., Juras, P. E., & Smith, S. D. (2022). Cost management: A strategic emphasis (Ninth). McGraw-Hill LLC.
Gedam, V. V., Raut, R. D., Lopes de Sousa Jabbour, A. B., Narkhede, B. E., & Grebinevych, O. (2021). Sustainable manufacturing and green human resources: Critical success factors in the automotive sector. Business Strategy and the Environment, 30(2), 1296–1313. https://doi.org/10.1002/bse.2685
Holy Bible. New Living Translation. (2007). Tyndale House Publishers, Inc.
Lin, C., Wu, T., Ou, X., Zhang, Q., Zhang, X., & Zhang, X. (2013). Life-cycle private costs of hybrid electric vehicles in the current Chinese market. Energy Policy, 55, 501–510. https://doi.org/10.1016/j.enpol.2012.12.037
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10/27/23, 10:09 AM Copyright
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COST MANAGEMENT: A STRATEGIC EMPHASIS, NINTH EDITION
Published by McGraw Hill LLC, 1325 Avenue of the Americas, New York, NY 10121. Copyright © 2022 by McGraw Hill LLC. All rights reserved. Printed in the United States of
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Contemporary Management Techniques: The Management Accountant’s Response to the Contemporary Business Environment
LO 1-3
Explain the contemporary management techniques and how they are used in cost management to respond to the contemporary business environment.
Management accountants, guided by a strategic focus, have responded to the six changes in the contemporary business environment with 13 methods that are useful in implementing strategy in these dynamic times. The first 6 methods focus
directly on strategy implementation: the balanced scorecard and strategy map, value chain, activity-based costing and
management, business analytics, target costing, and life-cycle costing. The next 7 methods help to achieve strategy implementation through a focus on process improvement: benchmarking, business process improvement, total quality
management, lean accounting, the theory of constraints, sustainability, and enterprise risk management. Each of these
methods is covered in one or more of the chapters of the text.
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The Balanced Scorecard (BSC) and Strategy Map Strategic information using critical success factors provides a road map for the firm to use to chart its competitive course and serves as a benchmark for competitive success. Financial measures such as profitability reflect only a partial, and frequently
only a short-term, measure of the firm’s progress. Without strategic information, the firm is likely to stray from its
competitive course and to make strategically wrong product decisions—for example, choosing the wrong products or the wrong marketing and distribution methods.
To emphasize the importance of using strategic information, both financial and nonfinancial, accounting reports of a firm’s
performance are now often based on critical success factors in four different perspectives. One perspective is financial; the
other three are nonfinancial:
An accounting report based on the four perspectives is called a balanced scorecard (BSC). The concept of balance
captures the intent of broad coverage, financial and nonfinancial, of all factors that contribute to the firm’s success in achieving its strategic goals. The balanced scorecard provides a basis for a more complete analysis than is possible with
financial data alone. The use of the balanced scorecard is thus a critical ingredient of the overall approach that firms take to
become and remain competitive. An example of a balanced scorecard is shown in Exhibit 1.4.
EXHIBIT 1.4 The Balanced Scorecard: Financial and Nonfinancial Measures of Success
Financial Measures of Success Nonfinancial Measures of Success
Sales growth Customer Satisfaction
Earnings growth Market share and growth in market share
Dividend growth Customer service (e.g., based on number of complaints)
Bond and credit ratings On-time delivery
Cash flow Customer satisfaction (customer survey)
Increase in stock price Brand recognition (growth in market share)
Internal Processes
Product quality
Manufacturing productivity
Cycle time (the time from receipt of a customer’s order to delivery)
Product yield and reduction in waste
Learning and Growth
Competence of managers (education attained)
Morale and firmwide culture (employee survey)
Education and training (training hours)
Innovation (number of new products)
The strategy map is a diagram that links the various perspectives in a balanced scorecard. For many companies, high
achievement in the learning and growth perspective contributes directly to higher achievement in the internal process
1. Financial performance. Measures of profitability and market value, among others, as indicators of how well the firm satisfies its owners and shareholders.
2. Customer satisfaction. Measures of quality, service, and low cost, among others, as indicators of how well the firm satisfies
its customers.
3. Internal processes. Measures of the efficiency and effectiveness with which the firm produces the product or service.
4. Learning and growth. Measures of the firm’s ability to develop and utilize human resources to meet its strategic goals now
and into the future.
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perspective, which in turn causes greater achievement in the customer satisfaction perspective, which then produces the
desired financial performance. The strategy map is therefore a useful means in understanding how improvement in certain critical success factors contributes to other goals and to the ultimate financial results. We cover the balanced scorecard and
strategy map throughout the text, particularly in Chapters 2, 12, 18, and 20.
The Value Chain The value chain is an analysis tool organizations use to identify the specific steps required to provide a competitive product
or service to the customer. In particular, an analysis of the firm’s value chain helps management discover which steps or
activities are not competitive, where costs can be reduced, or which activity should be outsourced. Also, management can use the analysis to find ways to increase value for the customer at one or more steps of the value chain. For example, companies
such as General Electric, IBM, U-Haul, and Harley-Davidson have found greater overall profits by moving downstream in the
value chain to place a greater emphasis on high-value services and less emphasis on lower-margin manufactured products. A key idea of value-chain analysis is that the firm should carefully study each step in its operations to determine how each step
contributes to the firm’s profits and competitiveness. The value chain is covered in Chapters 2, 13, and 17.
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Activity-Based Costing and Management Many firms have found that they can improve planning, product costing, operational control, and management control by
using activity analysis to develop a detailed description of the specific activities performed in the firm’s operations. The
activity analysis provides the basis for activity-based costing and activity-based management. Activity-based costing (ABC) is
used to improve the accuracy of cost analysis by improving the tracing of costs to products or to individual customers. Activity-based management (ABM) uses activity analysis and activity-based costing to help managers improve the value of
products and services and increase the organization’s competitiveness. ABC and ABM are key strategic tools for many firms,
especially those with complex operations or diverse products and services. ABC and ABM are explained in Chapter 5 and then applied in several of the chapters that follow.
Business Analytics Business analytics (BA) (also called predictive analytics) is an approach to strategy implementation in which the
management accountant uses data to understand and analyze business performance. Business analytics often uses statistical
methods such as regression or correlation analysis to predict consumer behavior, measure customer satisfaction, or develop models for setting prices, among other uses. BA is best suited for companies that have a distinctive capability that can be
derived from measurable critical success factors. BA is similar to the BSC because it focuses on critical success factors; the
difference is that BA uses analytical tools to develop predictive models of core business processes.
Emerging key types of BA include blockchain and artificial intelligence. Blockchain is a technology that allows all
parties to a transaction to know with certainty what happened in that transaction (www.fool.com/investing/2018/01/10/the-ba sics-of-blockchain-technology-explained-in-p.aspx). Artificial intelligence seeks to build machines and software that act
intelligently (www.forbes.com/sites/cognitiveworld/2019/02/25/artificial-intelligence-hype-is-real/#52ce2b9525fa). BA is
covered in Chapter 8.
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Target Costing Target costing is a method that has resulted directly from the intensely competitive markets in many industries. Target costi
ng determines the desired cost for a product on the basis of a given competitive price, such that the product will earn a
desired profit. Cost is thus determined by price. The firm using target costing must often adopt strict cost reduction measures
or redesign the product or manufacturing process to meet the market price and remain profitable.
Target costing forces the firm to become more competitive, and, like benchmarking, it is a common strategic form of analysis in intensely competitive industries where even small price differences attract consumers to the lower-priced product. The
camera manufacturing industry is a good example of an industry where target costing is used. Camera manufacturers such as
Canon know the market price for each line of camera they manufacture, so they redesign the product (add/delete features, use less expensive parts and materials) and redesign the production process to get the manufacturing cost down to the
predetermined target cost. The automobile industry also uses target costing. Target costing is covered in Chapter 13.
Life-Cycle Costing Life-cycle costing is a method used to identify and monitor the costs of a product throughout its life cycle. The life cycle
consists of all steps from product design and purchase of materials to delivery and service of the finished product. The steps
typically include (1) research and development; (2) product design, including prototyping, target costing, and testing; (3) manufacturing, inspecting, packaging, and warehousing; (4) marketing, promotion, and distribution; and (5) sales and
service. Cost management has traditionally focused only on costs incurred at the third step, manufacturing. Thinking
strategically, management accountants now manage the product’s full life cycle of costs, including upstream (research and development, design) and downstream (marketing, sales and service) costs as well as manufacturing costs. This expanded
focus means careful attention to product design because design decisions lock in most subsequent life-cycle costs. See
Chapter 13 for coverage of life-cycle costing.
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Benchmarking Benchmarking is a process by which a firm identifies its critical success factors, studies the best practices of other firms (or other business units within a firm) for achieving these critical success factors, and then implements improvements in the
firm’s processes to match or beat the performance of those competitors. Benchmarking was first implemented by Xerox
Corporation in the late 1970s. Today, many firms use benchmarking. Some firms are recognized as leaders, and are therefore benchmarks, in selected areas—for example, Nordstrom in retailing, Ritz-Carlton in service, the 3M Company in
manufacturing, and Apple in innovation, among others.
Benchmarking efforts are facilitated today by cooperative networks of noncompeting firms that exchange benchmarking
information. For example, the International Benchmarking Clearinghouse (www.apqc.org) and the International Organization for Standardization (ISO) (www.iso.org) assist firms in strategic benchmarking.
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