Decision Making Across the Organization

It is a remarkable reality that the traditional costing systems use a solitary, volume-based cost driver. This is the motivation behind why the traditional product costing system misshapes the expense of items or products. By and large, this kind of costing system appoints the overhead expenses to items on the premise of their relative use of direct work. Thus, traditional cost systems frequently report incorrect product costs. The issue is in the basic technique of the traditional costing systems. They stick to the supposition that items reason cost. Every time a unit of product is produced, it is expected that cost be brought about.

While we are performing our analysis on different aspects of the company, we look at the three main types of cost. When we remain devoted to improving our costs, and the faults related, we show our same devotion to our consumers. This is portrayed by the quality of products we put on the shelves. Prevention costs, appraisal costs and Failure costs are areas

Accounting is commonly described as the language of business. It is very important for all business owners to have very good understanding of their finances. Having the knowledge of your business finance, you will know where the money is going. Every business owner should have a good understanding of finance. To have a good understanding business owners needs to understand basic accounting steeps, how does accounting play a role in their business, how to define a financial statement and how the omission of any of these steps would affect the success of a business. Once you have an understanding of accounting/finance and the how it plays

Accounting is a business discipline that allows companies to record, analyze, and retrieve critical financial information that can be used to determine a company 's financial status. Its purpose is to help people understand what is going on financially within an organization provide reports and insights needed to make sound financial decisions.

According to, Skills for Business Decisions, “Cost-volume-profit (CVP) analysis examines changes in profits in response to changes in sales volumes, costs, and prices.” (Kimmel P.D. 2009) A company’s profit is the CVP profit equation of Profit = Revenue – Expenses. A Cost-volume-profit (CVP) analysis consists of five basic components that include:

Do you enjoy mathematics? Businesses run on numbers and it's the accountants that keep track of them. Business accounting may include keeping a general ledger, handling payroll accounts, tracking cash flow or managing employee benefits. Business accounting requires the use of a software program that manages the database and that can be programmed to produce the reports required by management. An accounting degree or business administration with a focus on finance is a solid base, while an MBA with focus on accounting or finance will propel you into a leadership position in your employer's fiscal affairs.

In the health care profession a CEO will be asked to make a lot of difficult decisions. The CEO will not only have to make decisions that fit the ongoing vision of the healthcare facility he/she may work at they will also have to form stable relationships with their peers, media, and staff. Decision making occurs in all organizations. The decision-making process

A company can have extremely high sales and remain unsuccessful. The key to long term success of a company is its ability to control its costs. Some companies may control costs in one area and expect drastic improvements in profits; however, this is not the outcome many will achieve. Because the costs in different areas are intertwined, they must all be considered when trying to improve profitability. Walmart is a fantastic example of how controlling costs in multiple areas can improve profitability. The remainder or this paper will be considering how Walmart controlled costs in the following activities: Procurement, Distribution, Merchandising and Marketing, Stores, People, Management?

Based on the real world functioning of businesses, every organization that deals with the process of manufacturing of certain products operates in accordance with the main principle of maximizing its profits. During the performance of daily activities, many business managers face a series of questions related to planning, control and decision making. In order to give answers to all these questions, an additional analysis needs to be considered. It is very important for managers to plan carefully how they are going to generate sufficient money to pay down costs and, in this way to result with a profit. As managers are interested in having the adequate information about the influence that certain actions might have on the profitability of the business, "Cost Volume and Profit" analysis plays a significant role by being a potential tool in facilitating the process of making the right decisions regarding planning and control in order to add value to the company. (Trifan and Anton, 2011). To further illustrate the essential impact that CVP analysis has on management authorities in making better decisions, I will refer to and analyze the case of the Hampshire Company which follows as below.

Accounting is the study of how businesses track their income and assets over time. Accountants engage in a wide variety of activities besides preparing financial statements and recording business transactions, including computing costs and efficiency gains from new technologies, participating in strategies for mergers and acquisitions, quality management, developing and using information systems to track financial performance, tax strategy, and health care benefits management. They perform these vital functions by offering an increasingly wide array of business and accounting services to their clients, in order to provide information to them.

The process of organizational change can be tumultuous and filled with unexpected challenges. This is true even when organizational change is intended to promote improvement of processes, procedures and efficiencies. This is why key decision-makers within an organization must take steps to prepare for obstacles and must possess a comprehensive understanding of the theoretical implications of a chosen decision. In a fast-paced and continually globalizing business environment, the way that we make decisions, follow-through with them and adjust them in the face of difficulty will be a key determinant of long-term survival, let alone success. The inherent challenges of effective decision-making and adjustment are demonstrated in the discussion hereafter, which proceeds from a personal experience where I participated in a decision-making process. In the chosen scenario, the decision fared poorly and the company suffered the negative consequences both it the experience of its personnel and in its overall performance. The discussion here gives consideration to the role of 'best fit' vs 'best practice' in business decision-making. Likewise, the sunk-cost effect and the transtheoretical model would both be relevant theoretical models in the course of the experience detailed hereafter.

The Organizational Model decision-making process is another that this writer found most useful in this course. Its general characteristics make use of programmed decisions that are usually used well-structured patterns of search but use simple rules of thumb as well as analytical frameworks which are determined by the complexity of the decision to be made. Organizations often make decisions that are optimal to their local sphere, but may not be optimal in the larger totality and is constrained by the desire to minimize uncertainties. However, organizations learn that they are part of open systems and adapt to their environment. Decision-making takes place primarily through the basic functions of the manager which includes planning, organizing, staffing, directing, and controlling.

From that statement manager must pay attention and carefully thinking when do decision making to the cost. For example when manager want to target the profit. They must take every cost that related in production such as variable cost and fix costs.

There are different costs that respond to the different activities like variable costs are directly associated with the products sold. The cost behavior patterns of selling, general, administrative, and other operating expenses are determined, and these expenses are budgeted accordingly. For example, sales commissions will be a function of the forecast of either sales dollars or units. The historical pattern of some expenses will be affected by changes in strategy that management may plan for the budget period. In a participative budgeting system, the manager of each department or cost responsibility center will submit the anticipated cost of the department 's planned activities, along with descriptions of the activities and explanations of significant differences from past experience. After review by higher levels of management, and perhaps negotiation, a final budget will be established. Because of the necessity to recognize cost behavior patterns for planning and control purposes, overhead costs will be classified as variable or fixed.

Decision-making is a fundamental component to any successful business. I chose the topic “Managerial Decision Making” because informed decisions are critical in order for managers to drive a profitable and sustainable business. Many business analysts measure an organization’s performance on their level of attained profit. The profits companies produce based on their business arrangements and profitable business deals, permit them to allocate benchmarks within the company to set financial goals for shareholders and investors, as well as permitting them to structure and design detailed financial budgets within the organization. A budget is a plan that impacts the financial decision making of the firm or organization. Cash budgeting is a critical component of a successful business because having the right cash available will enable business managers to make the right decisions at the right time, in a healthy and informed manner.