Managerial Accounting and the Business Environment

Prologue Managerial Accounting and the Business Environment Study Suggestions ( The prologue describes important aspects of the contemporary business environment. While there are no written assignments, you should be familiar with the major ideas as background for your study of managerial accounting. HIGHLIGHTS A. In many industries, a company that does not continually improve will find itself quickly overtaken by competitors. The text discusses four major approaches to improvement—Just-In-Time (JIT), Total Quality Management (TQM), Process Reengineering, and the Theory of Constraints (TOC). These approaches can be combined. B. The Just-In-Time (JIT) approach is based on the†¦show more content†¦2. The Plan-Do-Check-Act (PDCA) Cycle is a systematic, fact-based approach to continuous improvement. Exhibit 1 in the text illustrates the PDCA Cycle. a. In the Plan phase, the current process is studied, data are collected, and possible causes of the problem at hand are identified. A plan is developed to deal with the problem. b. In the Do phase, the plan is implemented and data are collected. This is done on a small scale if possible since at this point the team is rarely sure that the plan will work. c. In the Check phase, the data collected in the Do phase are analyzed to verify whether the expected improvement actually occurred. d. In the Act phase, the plan is implemented on a large scale if it was successful. If the plan was not successful, the cycle is started again with the Plan phase. 3. Perhaps the most important characteristics of TQM are that it empowers front-line workers to solve problems and it focuses attention on solving problems rather than on finger pointing. F. Process Reengineering is a more radical approach to improvement than TQM. It involves completely redesigning business processes and it is often implemented by outside consultants. 1. In Process Reengineering, all of the steps in a business process are displayed as a flowchart. Many of the stops are often unnecessary and are called non-value-added activities. 2. The process is then completely redesigned,Show MoreRelatedThe Changing Role of Managerial Accounting in a Dynamic Business Environment1723 Words   |  7 PagesCHAPTER 1 THE CHANGING ROLE OF MANAGERIAL ACCOUNTING IN A DYNAMIC BUSINESS ENVIRONMENT Learning Objectives 1. Define managerial accounting and describe its role in the management process. 2. Explain four fundamental management processes that help organizations attain their goals. 3. List and describe five objectives of managerial accounting activity. 4. Explain the major differences between managerial and financial accounting. 5. Explain where managerial accountants are located inRead MoreChapter01.the Changing Role of Managerial Accounting in a Dynamic Business Environment4441 Words   |  18 PagesWhich of the following statements about managerial accountants is false? A. Managerial accountants more and more are considered business partners. B. 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