Quiz 1: The Changing Role of Managerial Accounting in a Dynamic Business Environment


The explosion in e-commerce will affect managerial accounting in significant ways; one effect will be a drastic reduction in paper work. Millions of transactions between businesses will be conducted electronically with no hard copy documentation. Along with this method of communicating for business transactions comes the very significant issue of information security. Businesses need to find ways to protect confidential information in their own computers, while at the same time sharing the information to complete the necessary transaction. Another effect of e-commerce is the dramatically increased speed with which business transactions can be conducted. In addition to these business to business transactional issues, there will dramatic changes in the way managerial accounting procedures are carried out, one example being e-budgeting which is the enterprise wide and electronic completion of a company's budgeting process.

Plausible goals for the organizations listed are as follows:- a. Az:- - To achieve and maintain profitability - To grow online sales of books, music and other goods. b. ARC: - To raise funds from the general public sufficient to have resources available to meet any disaster that may occur. - To provide assistance top people who are victims of a disaster anywhere in the country on short notice c. GM's:- - To earn income sufficient to provide a good return on the investment of the company's stock holders. - To provide the highest quality product possible. d. J.C.P:- - To penetrate the retail market in virtually every location in the United States. - To grow over time in terms of number of retail locations, total assets, and earnings. e. City of PB: - To maintain an urban environment as free of pollution as possible. - To provide public safety, police and fire protection to the city's citizens. f. Hz:- - To be a recognizable household name associated with rental car services. - To provide reliable and economical transportation services to the company's customers.

Among the five management activities four management activities are listed below. 1. Preparing the information relevant to the decision making and planning and make the employees proactively participate in the decision making and planning process: This plan involves voluntary participation of all employees in the decision making and planning process. The main objective of this plan is to bring out the best plan from the available opportunities. 2. Aid managers to support, direct, and controlling operational activities: Management needs support in day-to-day activities for directing and controlling in customer service. This support may be from data processing system or from supporting staff or from combination of all of the above. 3. Encouraging managers and other employees towards the goals of organization: Empowerment is the concept come into the picture which allows employees to take actions and initiatives to improve process and to reduce cost and any other action which benefits the organization. The proven method of motivating employees is performance reward system. 4. Scaling the performance of activities , subunits, managers and other employees within the organization: Performance of the employees in achieving goals can be rewarded by promotions, pay raises, positive feedback and employee reward systems. One way to retain best employee is giving Employee Stock Option Plan (ESOP). Recognizing employee contribution towards organization is one of the objectives of the management.