1 Chapter One The Changing Role of Managerial Accounting in a Dynamic Business Environment

Managing Resources, Activities, and People Directing An organization . . . Decision Making Acquires Resources Organized set of activities Planning Controlling Hires People

How Managerial Accounting Adds Value to the Organization Providing information for decision making and planning. Assisting managers in directing and controlling activities. Motivating managers and other employees towards organization’s goals. Measuring performance of activities, managers, and other employees. Assessing the organization’s competitive position.

Managerial versus Financial Accounting Accounting System (accumulates financial and managerial accounting data) Managerial Accounting Information for decision making, and control of an organization’s operations. Financial Accounting Published financial statements and other financial reports. Internal Users External Users

Managerial versus Financial Accounting

Line and Staff Positions A line position is directly involved in achieving the basic objectives of an organization. Example: A production supervisor in a manufacturing plant. A staff position supports and assists line positions. Example: A cost accountant in the manufacturing plant.

Evolution and Adaptation in Managerial Accounting Service Vs. Manufacturing Firms Computer-Integrated Manufacturing Information and Communication Technology Emergence of New Industries Change Global Competition Product Life Cycles Total Quality Management Focus on the Customer Cross-Functional Teams Time-Based Competition Continuous Improvement Just-in-Time Inventory

Strategic Cost Management and the Value Chain Product Design Production Research and Development Marketing Securing raw materials and other resources Distribution Customer Service Start

Resolution of Ethical Conflict Professional Ethics Competence Confidentiality Integrity Objectivity Resolution of Ethical Conflict

End of Chapter 1