PepsiCo restaurants Essay

I. Introduction The key question is whether PepsiCo should expand its restaurant business by pursuing the purchase of CARTS OF COLORADO, a $7 million manufacturer and merchandiser of mobile food carts and kiosks, and CALIFORNIA PIZZA KITCHEN, a $34 million restaurant chain in the casual dining segment. II. Analysis of the main problemPepsiCo has 3 main segments: soft drinks (35% of PepsiCo’s sales and 39% of its operating profits in 1991), snack foods (29% of PepsiCo’s sales and 35% of its operating profits) and restaurants (36% of PepsiCo’s sales and 26% of its operating profits). In the early 1990’s PepsiCo’s three restaurant chains (KFC, Taco Bell and Pizza Hut) were the leaders in their respective segment. PepsiCo’s senior management believes its ability to move people within and across divisions gives PepsiCo a competitive advantage in the restaurant segment. PepsiCo believes their restaurants perform due to their strong management teams; which are developed within the corporation. PepsiCo would like to utilize their competitive advantage in running restaurants with PepsiCo managers by adding California Pizza Kitchen and CARTS OF COLORADO to the PepsiCo portfolio. Despite PepsiCo’s success with KFC, Taco Bell and Pizza Hut it had difficulty expanding La Petite Boulangerie, a three-unit bakery chain it purchased in 1982. The large overhead for La Petite Boulangerie made the company unprofitable and Pepsi sold it in 1987 for a $13 million loss. The unsuccessful venture into La Petite Boulangerie suggested that although PepsiCo managers were gifted and could be easily moved across divisions; the moves would not always guarantees a successful business expansion. Therefore, the main problem for PepsiCo management is to decide whether it can successfully purchase and administer CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO. This is in light of the fact that PepsiCo believes it has a competitive advantage in the skillfulness of its managers that was not borne out in the unsuccessful La Petite Boulangerie bakery endeavor. III. Recommendations PepsiCo can be categorized as a related diversifier. Approximately 30% of its revenue is split between its 3 main industrial  categories. PepsiCo’s business units share common resources and skills. Historically companies that take a corporate strategy of related diversification perform the best (GBS_634M lecture notes). Therefore on the surface it would appear that diversification by acquiring CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO would be an excellent strategic decision. However, in arguments described below; the evidence does not support a recommendation for PepsiCo to purchase Carts of Colorado or CALIFORNIA PIZZA KITCHEN. IV. Justification for recommendations PepsiCo is a lucrative company and therefore does not need to diversify into CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO to maintain it profitability. From 1987-1991 PepsiCo’s sales doubled, income from continuing operations grew at a compound rate of more than 20%, and the company’s value on the stock market tripled (PepsiCo restaurant Case, pg. 4, and Exhibit 3). Eight key reasons NOT to diversify into CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO. It is poor rationale for PepsiCo to diversify into CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO simply to reduce risk. The restaurant business is cyclical. Some restaurants will be profitable, while some will not be profitable. PepsiCo’s shareholders can diversify risk by purchasing shares in CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO themselves. Furthermore, it is not an appropriate strategy for PepsiCo management to over-diversify to protect their personal wealth. Maintaining growth is not a good basis to diversify into CALIFORNIA PIZZA KITCHEN or CARTS OF COLORADO. Most shareholders would rather hold shares in a small profitable company, not a big unprofitable company. As a shareholder, there is only a benefit if PepsiCo makes a profit. Currently PepsiCo is making a profit. Although managers benefit from growth regardless of profit or loss , growth for the sake of growth is not an appropriate reason to diversify. Although PepsiCo can use CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO to balance cash flow by funneling cash from its large business units to the smaller CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO business units; this is not recommended. Even thought PepsiCo has the capability of doing this an individual shareholder can do this for himself. The counterargument would be that PepsiCo managers can do a better job balancing cash flow than shareholders because the corporation can be more tax efficient than the individual shareholder. But this alone is not a sufficient reason to diversify. The acquisition of CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO will not create synergy within the PepsiCo corporate strategy. PepsiCo already has a Pizza segment (i.e. Pizza Hut) and does not have experience in the mobile food cart segment. Diversifying into these two market segments will not produce corporate synergy where the whole is greater than the sum of the parts. One good reason for PepsiCo to diversity into CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO is the sharing of infrastructure and to create economies of scope. PepsiCo is currently saving money because they are competing in several different industries (ie. Soft drinks, snack foods, and restaurants). These business units share the support structure and therefore the reduced costs. While Pepsi’s economy of scope can be used to distribute chips just as well as soft drinks it is not apparent that they can deliver well in the niche restaurant market like CALIFORNIA PIZZA KITCHEN (refer back to La Petite Boulangerie misfortune). If PepsiCo were to sell two or more different products simultaneously that would be beneficial by creating an economy of scope. For example, if PepsiCo could distribute Pepsi soft drinks and California Pizza from a cart they would have justification for the acquisition of CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO because they would be sharing common infrastructure that would make them unique. The uniqueness would make it very difficult for competitors to imitate and would be a reason to diversify. But there are currently no mechanisms to sell California Pizza’s from a cart. Therefore at this time, sharing of  infrastructure is not a good justification for PepsiCo to diversify into these two markets. It is not apparent that PepsiCo will increase its market power if they acquire CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO. PepsiCo already has multiple business units that buy from the same set of suppliers and sell to same set of customers. They have used this to gain market power. It is not apparent that adding CALIFORNIA PIZZA KITCHEN or CARTS OF COLORADO to the fold will increase PepsiCo’s market share significantly. It could be argued that by acquiring CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO PepsiCo is exploiting core competence. Although this is generally a good reason to diversify by generating more revenue opportunity and competing in several markets; this is not a good initiative for PepsiCo in the situation with CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO. In order to exploit core competencies, PepsiCo’s business units must be related, so they share the same set of skills. In order for this strategy to be successful, the benefits to PepsiCo have to be unavailable to PepsiCo’s competitors. If PepsiCo’s competitors can gain the same advantage, then PepsiCo will not have a strategic benefit. Although the Colorado Carts are unique, they can be duplicated by the competition (e.g. California Carts, All-Star Carts, Creative Mobile systems). With regards to CALIFORNIA PIZZA KITCHEN, other pizza restaurants can reproduce the unique flavors and styles of pizza. Therefore, PepsiCo will not be exploiting its core competence and should not diversify. If PepsiCo is contemplating CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO as good ‘turnaround projects’ then this is not a justification for diversification. CALIFORNIA PIZZA KITCHEN is a profitable company. CALIFORNIA PIZZA KITCHEN has increased both sales and net income from 1990 to 1991. CARTS OF COLORADO has also shown an increase in sales and operating income from 1985-1991. The management teams of both companies appear to be performing well. Therefore the ‘turnaround’ potential is not a good reason to diversify. CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO do not fit into the PepsiCo Corporate strategyWhere does PepsiCo compete?There may be a market opportunity for PepsiCo in the acquisition of CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO, but that does not necessarily imply that PepsiCo should take the opportunity. The overall scope of PepsiCo is on convenient foods and beverages. The acquisition of CARTS OF COLORADO would certainly be in-line with PepsiCo’s focus of providing foods and beverages at well-situated locations. However, PepsiCo does not have experience in the placement of mobile food carts and therefore PepsiCo would be at a disadvantage to those more experienced in the mobile cart business. There is even less evidence for a distinctive market opportunity for PepsiCo with the acquisition of CALIFORNIA PIZZA KITCHEN. PepsiCo already owns Pizza Hut and therefore has a place in the dine-in and take-out pizza business. Although CALIFORNIA PIZZA KITCHEN is suited for more upscale markets with unique flavors and tastes, Pizza Hut could introduce similar unique flavors and tastes. In addition Pizza Hut has stores across the United States and internationally, while CALIFORNIA PIZZA KITCHEN has a limited geographic scope. It currently operates only 25 restaurants in eight states (PepsiCo case, pg. 15). The offbeat pizzas may not sell well across the United States and internationally. For example, jerk-chicken pizza may sell very well in Beverly Hills, CA but not sell well in Peoria, Illinois or Duesseldorf, Germany. How does PepsiCo compete?PepsiCo’s corporate strategy allows for transfer of resources (i.e. managers) across their business units. PepsiCo’s philosophy is â€Å"We take eagles and teach them to fly in formation† (PepsiCo case, pg. 3). Therefore PepsiCo may have a strategic advantage by transferring managers from one of its current business units to CALIFORNIA PIZZA KITCHEN or CARTS OF COLORADO. For example, one manager could transfer her knowledge from a position at Pizza Hut to CALIFORNIA PIZZA KITCHEN relatively transparently; although it may be more difficult to transfer knowledge from Pizza Hut to the food carts and kiosks; the business of Colorado Carts. PepsiCo does transfers resources which fit well with the CARTS OF COLORADO  enterprise. PepsiCo can place a Cart outside a shopping mall on the street selling food. At some carts PepsiCo could offer KFC or Taco Bell while offering a Pepsi soft drink; maybe put forward some Frito lays chips. But this strategy does not fit well with the idea of the upscale CALIFORNIA PIZZA KITCHEN being directly near a KFC or Taco Bell in a mega-mall food court. How does PepsiCo execute?PepsiCo, although a very large corporate office, has an execution strategy in which they let the managers go at their own pace. They have a ‘decentralized organization’ (PepsiCo case pg. 4). PepsiCo managers are rewarded on a two-phase system; reporting performance first to direct managers then to upper level managers. In order to be promoted managers of CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO would have to perform very well relative to all of the remaining PepsiCo restaurants. Because all of the other PepsiCo restaurants are at the top of their respective segments it will be a challenge for managers of CALIFORNIA PIZZA KITCHEN and CARTS OF COLORADO to surpass other PepsiCo business units. Therefore the managers will not be incentivized as well managing CALIFORNIA PIZZA KITCHEN or CARTS OF COLORADO. Therefore, diversifying into California Pizza Kitchen and CARTS OF COLORADO is not copasetic with the PepsiCo corporate strategy. V. Summary. The acquisition of CARTS OF COLORADO and CALIFORNIA PIZZA KITCHEN will not lead toward the fulfillment of PepsiCo’s mission which is â€Å"To be the world’s premier consumer products company focused on convenient foods and beverages and seeks to produce healthy financial rewards to investors as they provide opportunities for growth and enrichment to their employees, their business partners and the communities in which they operate. And in everything they do, to strive for honesty, fairness and integrity.† (http://www.pepsico.com/PEP_Company/Overview/index.cfm)PepsiCo’s management should take the â€Å"guilty until proven innocent† approach and not diversify into these two business segments. As described in the preceding paragraphs  at this time there is not sufficient and convincing evidence to support the need for diversification into CALIFORNIA PIZZA KITCHEN or CARTS OF COLORADO. References: 1. http://www.pepsico.com/PEP_Company/Overview/index.cfm2. www.cpk.com3. PepsiCo restaurants. HBS 9-794-078

Expalnation of Father Returning Home Essay

ldad return home! My father travels on the late evening train Standing among silent commuters in the yellow light Suburbs slide past his unseeing eyes His shirt and pants are soggy and his black raincoat Stained with mud and his bag stuffed with books Is falling apart. His eyes dimmed by age fade homeward through the humid monsoon night. Now I can see him getting off the train Like a word dropped from a long sentence. He hurries across the length of the grey platform, Crosses the railway line, enters the lane, His chappals are sticky with mud, but he hurries onward. Home again, I see him drinking weak tea, Eating a stale chapati, reading a book. He goes into the toilet to contemplate Man’s estrangement from a man-made world. Coming out he trembles at the sink, The cold water running over his brown hands, A few droplets cling to the greying hairs on his wrists. His sullen children have often refused to share Jokes and secrets with him. He will now go to sleep Listening to the static on the radio, dreaming Of his ancestors and grandchildren, thinking Of nomads entering a subcontinent through a narrow pass. The poem speaks about the inner loneliness of the poet’s father, the utter alienation he is experiencing in the twilight years (man’s estrangement from a man-made world) as he ceases to matter to his children who no longer share anything with him. All the while he is trying to evoke, through the racial conscious, the invisible connection with his ancestors who had entered the sub-continent through the Khyber Pass in the Himalayas in some distant past (the allusion is perhaps to the migration of the Aryans to the Indian subcontinent from Central Asia). The poet uses some fine imagery to describe the pain and misery lurking in the old man’s soul as he travels in the local train . His bag stuffed with books is falling apart refers to the state of the old man’s mind which has turned senile after all that knowledge it has acquired through years of dedicated study. A wonderful image is used to describe his getting down from the train: Like a word dropped from a long sentence . The uniqueness of the image lies in the highly evocative visual picture of an old man dropping off from the train as though he is no longer relevant to the train which will now move forward with other people to their destinations. The old man is just a word in the syntax of life. The sentence that is long enough to carry several words forward each contributing to its overall meaning now drops off one stray word, which is no longer required. The other interesting image is the eyes and vision, which occurs in the poem again and again. The suburbs slide past his unseeing eyes is a pretty image. The second one is his eyes dimmed by age fade homeward. Above all we may look at the dexterous use of words to convey the â€Å"twilight† atmosphere in the poem : evening train, yellow light, unseeing eyes , his eyes dimmed by age fade homeward ,gray platform. Meaning of the poem is also a part of â€Å"to know, how to live in the society†. Other meaning is It’s all about the severe problem of generation gap. The widening crisis due to the explosion of rational. Father Returning Home is a poem written by Dilip Chitre. The main idea of this poem is ‘Man’s estrangement from a man-made world’. Here the father comes home late tired with his pants are soggy and his black raincoat is stained with mud and his bag is falling apart-He never cares the scenes of the outer world when he travels. Because he is always musing about his family. He is so true about his family, yet no one in his family realizes his care for them. He gets only the weak tea and stale chapati. (Look, he is the only one who works hard for his family yet he does not get even good food.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The lines like ‘The cold water running over his brown hands, A few droplets cling to the greying hairs on his wrists’ are used to add to the effect of the life and the world of poor father. His children are not ready to share jokes with him-their sullenness shows the unspoken resentment. And finally, even when he goes to bed the story is not different. There he receives only noi sed receiving, not even a good program from the radio. In short the father has no joy in his life; there is no closeness between the father and the children. The only thing that changes the mood of the poem is when he thinks about his dead yesterdays (ancestors) and unborn tomorrows (grand-children and nomads) -Here one thing must be noted that he dreams about these people not about his own children. Patel wanted to convey the idea of unseen sincerity of millions of fathers who strive hard for their family and their people. Dilip Chitre’s poem â€Å"Father Returning Home† is selected from â€Å"Travelling in A Cage†. It speaks about the dull and exhausting daily routine of a commuter. Delinked from his family he is left with himself to talk. Dreaming about his ancestors and grand children he communicates with the dead ‘yesterdays and unborn tomorrows. ‘ His alienation is complete and irreversible. Sleep and dream come as sweet relief from a world that is alien to him. The theme of the poem is â€Å"Man’s estrangement from a man-made world. † Dilip Purushottam Chitre (Marathi: ) was one of the foremost Indian writers and critics to emerge in the post Independence India. Apart from being a very important bilingual writer, writing in Marathi and English, he was also a painter and filmmaker. Biography He was born in Baroda on 17 September 1938. His father Purushottam Chitre used to publish a periodical named Abhiruchi which was highly treasured for its high, uncompromising quality. Dilip Chitre’s family moved to Mumbai in 1951 and he published his first collection of poems in 1960. He was one of the earliest and the most important influences behind the famous â€Å"little magazine movement† of the sixties in Marathi. He started Shabda with Arun Kolatkar and Ramesh Samarth. In 1975, he was awarded a visiting fellowship by the International Writing Programme of the University of Iowa in Iowa City, Iowa in the United States. He has also worked as a director of the Indian Poetry Library, archive, and translation centre at Bharat Bhavan, a multi arts foundation, Bhopal. He also convened a world poetry festival in New Delhi followed by an international symposium of poets in Bhopal. His Ekun Kavita or Collected Poems were published in the nineteen nineties in three volumes. As Is,Where Is selected English poems (1964-2007) and â€Å"Shesha† English translation of selected Marathi poems both published by Poetrywala are among his last books published in 2007. He has also edited An Anthology of Marathi Poetry (1945–1965). He is also an accomplished translator and has prolifically translated prose and poetry. His most famous translation is of the celebrated 17th century Marathi bhakti poet Tukaram (published as Says Tuka). He has also translated Anubhavamrut by the twelfth century bhakti poet Dnyaneshwar. Film Career He started his professional film career in 1969 and has since made one feature film, about a dozen documentary films, several short films in the cinema format, and about twenty video documentary features. He wrote the scripts of most of his films as well as directed or co-directed them. He also scored the music for some of them. Awards and Honors He worked as an honorary editor of the quarterly New Quest, a journal of participative inquiry, Mumbai. Among Chitre’s honours and awards are several l Maharashtra State Awards, the Prix Special du Jury for his film Godam at the Festival des Trois Continents at Nantes in France in 1984, the Ministry of Human Resource Development’s Emeritua Fellowship, the University of Iowa’s International Writing Program Fellowship, the Indira Gandhi Fellowship, the Villa Waldberta Fellowship for residence given by the city of Munich, Bavaria, Germany and so forth. He was D. A. A. D. German Academic Exchange) Fellow and Writer-in-Residence at the Universities of Heidelberg and Bamberg in Germany in 1991–92. He was Director of Vagarth, Bharat Bhavan Bhopal and the convenor-director of Valmiki World Poetry Festival ( New Delhi,1985) and International Symposium of Poets ( Bhopal, 1985), a Keynote Speaker at the World Poetry Congress in Maebashi, Japan (1996 ) and at the Ninth International Conference on Maharashtra at Saint Paul, Minnesota, USA in 2001 and Member of the International Jury at the recent Literature festival Berlin, 2001. He was member of a three-writer delegation ( along with Nirmal Verma and U. R. Ananthamurthy) to the Soviet Union (Russia, Ukraine, and Georgia), Hungary, the Federal Republic of Germany and France in the spring and summer of 1980 and to the Frankfurter Buchmesse in Frankfurt, Germany in 1986; he has given readings, lectures, talks, participated in seminars and symposia, and conducted workshops in creative writing and literary translation in Iowa City, Chicago, Tempe, Paris, London, Weimar, Saint Petersburg, Berlin, Frankfurt, Konstanz, Heidelberg, Bamberg, Tubingen, Northfield, Saint-Paul/Minneapolis, New Delhi, Bhopal, Mumbai, Kochi, Vadodara, Kolhapur, Aurangabad, Pune, Maebashi, and Dhule among other places. He travelled widely in Asia, Africa, Europe, and North America as well as in the interiors of India; been on the visiting faculty of many universities and institutions, a consultant to projects. He was the Honorary President of the Sonthhheimer Cultural Association, of which he was also a Founder-Trustee. Death After a long bout with cancer, Dilip Chitre died at his residence in Pune on 10 December 2009. Dilip Chitre: Portrait of an artist At the ripe young age of 16, Dilip Purushottam Chitre made a decision that would change his life forever. He decided he wanted to live as a poet and artist. It could not have been an easy choice. He admits to vague premonitions of it being difficult, and admits it proved hard at times. And yet, after over fifty years of living that life of poet and artist, he stands by it, refusing to have it any other way. One can’t blame him either. After all, his has been a life gifted with all sorts of revelations. It has been a colourful life, one spent whole-heartedly in the service of art and literature. His achievements, when strung together casually, boggle the mind. Chitre has — since publishing his first collection of poems, Kavita, in Marathi in 1960 — published a lot in English (Travelling in the Cage, 1980), has had his work translated into Hindi (Pisati ka Burz, 1987), Gujarati (Milton-na Mahaakaavyo, 1970), German (Worte des Tukaram) and Spanish. He has exhibited his own paintings (First One Man Show of Oil Paintings, 1969); written and directed an award-winning film (Godam, 1984); made a dozen documentary films and scored music for some of them; taken on the mantle of editor for literary magazines (Shabda, 1954-1960); written for India’s most respected publications; influenced a literary movement (the little magazine of the sixties in Marathi); convened poetry festivals; won all kinds of honours; travelled widely across India and abroad; and taught at universities worldwide. So, when he describes his interests on his blog thus — ‘I am a poet and a writer. I paint. I make films. I travel. I make friends. I read. I listen to music. I reflect. I contemplate. ‘ — it’s hard not to believe him. Born in Baroda in 1938, Chitre soon moved with his family to Mumbai, where he published his first collection of poems. Possibly the most famous of his translations is Says Tuka, a rendition of the work of seventeenth century Marathi bhakti poet Tukaram. It is a translation of abhangs, a form of devotional poetry sung in praise of Vitthal. Chitre’s translation continues to find new readers, surprising and moving them with its simplicity: ‘There is a whole tree within a seed/ And a seed at the end of each tree/ That is how it is between you and me/ One contains the Other. I envy Dilip Chitre for the life he has lead, for his unwavering faith in all he holds dear. He now lives in Pune with his wife, Viju, to whom he has been married for over 45 years. ‘Even in the most civilized societies of the world, poets receive ambivalent treatment,’ he writes. ‘The economic value of what poets do is considered extremely dubious†¦ The most they can hope for during a lifetime is niche audiences scattered far and wide and small publishers crazy enough to publish poetry without any regard to sales. ‘

A Study of the Barriers of Implementation of Accounting Information System: Case of Listed Companies in Tehran Stock Exchange

Journal of Economics and Behavioral Studies Vol. 2, No. 2, pp. 76-85, Feb 2011 A study of the barriers of implementation of accounting information system: Case of listed companies in Tehran Stock Exchange 1Accounting Mahdi Salehi1 Abdoreza Abdipour2 and Management Department, Islamic Azad University, Takestan Branch, Iran, 2Payame Noor University, Andimeshk Branch, Iran [email  protected] com Abstract: Accounting information system is one of subsystems in management information system that is very important in all companies. The current study reviews barriers in implementation by postulating six hypotheses of accounting information system (middle managers, human resources, organizational structure, environmental factors, financial issues, and organizational culture) in companies listed on Tehran Stock Exchange. Finally, some results were obtained in this manner: barrier of organizational structure with 26 percent, middle managers with 26 percent, human resources with 25 percent, environmental factors with 21 percent, organizational culture with 19 percent and finally financial issues with16 percent were identified as barriers factors influencing on the establishment of accounting information systems in listed companies on Tehran Stock Exchange. Generally to eliminate these barriers, management, financial managers and staff must be trained practically by experienced teachers in accounting information systems to use the specialist and professional managers, to lengthen position of managers, to clear financial issues, to inform benefits of system establishment to company's managers. By giving reward to managers and staff try to encourage these people to use the new system. To justify staff that the establishment of new system would be their advantages; by the lever of reward, to encourage staff to compete in learning and work with the system in staff and learn to compete with systems that can accelerate performing and implementing the system. Key words: Accounting information systems, Corporate accounting system, financial system 1. Introduction Today, dramatic changes have occurred in the field of Information Technology (IT) and its progress has been so pervasive so that it has created changing trends in different in areas. The most important features of it are; high speed data processing, extremely high accuracy, and high speed access to information, to be up-to-date, the possibility of electronic exchange of information, high quality, very cheap and declining price. By considering these factors there will be no need to justify the use of IT in today's world (Salehi et al. , 2010a). Addition in accounting has to use and apply all or some of the new techniques in their services and obligations. So, providers of information especially accountants, should be the providers of advanced and high-quality information so that their services to be bought in high prices. Otherwise, in the future they will not have any place. Accounting information System (AIS) is developed between one or two or more units of a company to achieve a specific goal (Salehi et al. , 2010 b; Salehi and Alipour, 2010). It contains small sub-systems that support larger systems, includes people, methods, information and software and information technology infrastructures (Romney and Barrett, 2003). System consists of a set of incorporated components that are affiliated to achieve one or several particular goals in a way that, if one or more input can enter in it, one or more output exits (Frederick, 1984). AIS is a completely designed system for the production, collection, organization (processing), storage, retrieval and dissemination in an institution, organization or any other defined areas of society. AIS can helps business units and solve short-term problems of managers in the areas of final price, cost and cash flow through providing information to support and supervision of companies in the dynamic and competitive environment, and to help the integration of these companies and the operational considerations and strategic programs in long term (Mitchell et al. 2000). Progress in the fields of accounting, information technology and information systems during the past two decades suggest conditions to consider the role of accounting information system. For example, the evolution of active database technology, implementing new models, such as accounting resources and factors of planning resources and allowing accounting information to attract financial old data. 76 Available literat ures show little evidence of developing AIS within medium companies. In fact considerable evidences suggest that financial accountings n medium companies are the main source of information and management (McMahon and Davies, 1994). Advantages of JIT The advantages of the JIT philosophy are many. Giunipero et al. , (2005) say that JIT has led to several benefits which include lower production cost, higher and faster throughputs, better product quality, reduced inventory costs, and shorter lead times in purchasing. According to an American study of U. S. Manufactures, companies can expect improved performance in lead times, quality levels, labor productivity, employee relations, inventory levels and manufacturing costs (White, Pearson, and Wilson, 1999). Fullerton and McWatters (2001) summarised benefits in to five categories: quality benefits, time-based benefits, employee flexibility, accounting simplification and firm profitability. The increase in performance is usually attributable to a decrease in inventory levels, smoother production flow, lower storage cost and ultimately a decrease in average cost per unit (Hall, 1989). Callen et al. , (2000) reported that JIT plants have significantly less WIP than non-JIT plants. JIT plants also store fewer finished products and have lower variable and total costs than the non-JIT equivalent. Callen et al. , (2000) further found that JIT plants are significantly more profitable than non-JIT plants, but are neither successful at minimizing WIP and costs nor maximizing profits. It is possible to observe that traditional performance measurement system is inconsistent with JIT system benefiting from technological innovations at a maximum level and also that it prevents or hides broad-based effectiveness of new production methods. In this sense, the restrictions of traditional measurement system in JIT environment might be listed as follows: 1. Continuous development in production process is basic element in JIT manufacturing environment. To reach this aim easily, it’s intended to make flow of production possible with minimal parties and decreasing stock levels to a minimum. Yet, production and productivity measures of traditional understanding have reported that the productivity is low when small-lot production is made (Drury, 1990). For this reason, traditional accounting system suggests increasing batch capacity rather than decreasing lot size, which leads to raising stock levels, long supply process, increasing cost and declining customer satisfaction (Mcnair et al. 1990). As in standard costing, appropriate operational control of traditional accounting system cannot be carried out in today’s production environment (Allott, 2000; Cheatham and Cheatham: 1996; Ezzamel, 1992). Besides, due to the reliability and consistency of manufacturing processes in JIT environment, deviations do not exist or exist in qui te low level and it also leads to less use of deviation analyses. JIT manufacturing system changes will bring about changes in information requirements (Upton, 1998). As it is known, normally traditional performance, reporting is prepared monthly or weekly and cannot detect on time real reasons of processes that are not realized as expected. Yet, in JIT production system there is a possibility of short production cycle, so it requires information for the problems coming out in accordance with one-day or â€Å"real time† principal. 2. 3. Ahmad et al. , (2004) presented potential benefits and performance improvements achieved through JIT implementation. The summary of main benefits of JIT is listed below: 1. 2. 3. . 5. 6. 7. 8. 9. Reduced process time, setup time and lead time; Reduced raw material, wip and finished goods inventory levels and lot size; Improved machinery and reduced machine breakdowns and downtimes; Minimized space requirement; Improved flow of products; Lowered production costs; Simplified production processes; Improved quality; Improved flexibility, multifunctional ability, motivation and problem solving capability of emplo yees; 10. Increased productivity and performance; 77 11. Improved consistency of production scheduling; and 12. Increased emphasis on supplier integration Following are the main objectives of the study: 1. 2. Identify barriers in the establishment of AISs in companies. Provide strategies for the establishment of the obstacles companies AIS in listed companies on TSE. 2. Theoretical issues and review of literature IT is a company's key infrastructure that includes physical information technology infrastructures, information technology of human resources to get information (technical and managerial skills), and technology of irreplaceable resources (Bharadvj, 2000). An important study problem in management accounting and concern about AIS decision-making with organization regarding the need for information is communication and control of accounting information system. Computer system is based on a process that supports financial data for decision-making tasks of managers within the frame of coordination and control of company's activities that in the researches of different studied models, between accounting information system with technology organization, organization's structure and organizational environment have been studied (Chen and Hall, 1994). AIS is an important mechanism of an organization that is vital for effective management decision-making in controlling organization (Zymrmn, 1995). Generally, AIS is classified in two categories: a: effective decision-making for information that is largely for control of organization and b: to facilitate information that is mainly used for coordination of organization in decision-making are used (Kern, 1992). Effectiveness of AIS to increase system integration is to improve internal communications throughout the organization (Huber, 1990). Top management team with various planning and management information system influences on strategic performance (Gil, 2009). Behavioral changes following Joint development show AIS support and participation of users that has been influencing on in accounting information system development and improved financial performance, which eventually lead to successful troubleshooting cost accounting system, are based activities (Alden burg et al. , 2009). About the productivity of information technology within the information systems in public accounting is that a small number of respondents aware of the technology components were the major component of respondents information technology data, but not the information system Accounting and usefulness were aware of the development and effects in this study started the organization, human resources management and knowledge of technology and acceptance of data were evaluated (Madshary, 2008). Comparative advantage as a model of efficiency value accounting information systems research for scholars is significantly effective and that represent the financial resources and human resources as the two basic pillars of research and development supplement industry regarding information systems that are accounting absolute superiority ensures business operations (Eles, et al. , 2008). Management stress on critical factors in success to implement organizational resources planning systems suggests that the selecting appropriate time, completing the project by one management, training personnel, superiority of project results in comparison with other projects, use of consultants, management interaction with users, the use of project control committee, shows the difference between successful and unsuccessful projects (Bradley, 2008). Test of textual factors and the impact of characteristics of technology on implementing auditing decisions is in such a way that the use of computer techniques by experienced auditors shows that companies which have experienced the ability of influencing on implementation of new technology using long-term budgets, have assed different courses through indirect control of the software (Curtis and Payne, 2008). Intelligent business systems and measuring, its effects in connection with business processes and organizational performance when measuring performance is important as information technology systems through specialized texts and literature is outstanding (Bashir, et al. , 2008). Test of the influence of international investors on the quality of accounting information demonstrates that the choice right of investment and increasing work quality of international investors on the quality information has influenced on Russian accounting companies (Baguya, 2008). Current economic and the traditional model of accounting reports: challenges and opportunities ahead of AIS researches prove that the economy in real condition can accelerate measurement and evaluation of business. Decision-making processes as a 78 new business model results in decrease of internal and hidden processes. Therefore, AISs together with research literature have been successful in development of new models to accelerate accounting processes (Vasarahly and Els, 2008). Organizational determining factors acceptance and implementation of information technology in mean companies: private and public companies shows that limiting factors in the implementation and information technology overhaul, reform arranged, changes, lack of qualified personnel and Run the same technology and information systems quality are essential (Muyanu and Brook, 2007). Strategic Planning of information systems: case study in inancial services companies in Germany represents that lack of scientific literature in implementation of strategic information systems planning, data transfer isn't mainly due to scientific literature, although scientific literature inspiring, in practice to run strategic planning, information system not included. Professional characters of management and different resources are of scientific characters. Thus the role of management in the information technology practice through the opinions of staff need more experience (Tabnar, 2007). More regulatory practices on information technology function of information technology organizations and business sector common understanding with the goals are associated with information technology. For example, active participation in the committee information technology, trade balance, decisions regarding technology information and understanding of strategic policies and administrative information technology in successful exploitation of information technology projects (Buyan et al. , 2007). Appropriate review between designing of AIS and performance of commercial units by analyzing strategies explains that high performance of commercial units depends on a wide range of accounting information systems (Boolean, 2007). Study of integrated information systems literatures of management accounting with consideration to the existing strengths within the framework of management accounting elements, new integrated information systems of accounting results in more development and understanding of theatrical frameworks in this regard. It identifies research gaps and suggests using research opportunities with different patterns and different methods. Ranking of AISs on performance of medium companies in Malaysia after study of 310 companies through electronic questionnaire showed that, a significant and important part of medium companies in Malaysia placed in high rank, and only a limited number of medium companies because of low organizational performance were in low level of accounting information systems (Nur Azizi and Kynk, 2005). Factors of users' concentration, measurement, and report making, quality of provided management information, reviewing and checking group work of outcomes affect the quality of accounting information (Hong-Jiang, 2005). To develop and spread of AIS a special team should be organized for designing input and output concepts and processing stored information so that company's decisions for main outputs and comparing of them with computer information to be possible and achievable (Romney and Stein, 2003). Future development of AIS in investment shows that the successes in avoiding risking the capital of companies are of five categories as: 1- clear and bright offers. 2 – Internal changes in institution investment. 3 – The variety of variables and repeating information change 4 – More use of information for supportive decisions support 5- world-wide impacts on investment. These evidences are good reasons for the judge and further research in the future and development of AIS (Gavyn et al. , 1997). Mistry (2005) found that, though JIT has been widely implemented, interest in documenting its impact on financial performance and productivity was generated during last few decades. For example, Inman and Mehra (1993) established the link between JIT benefits and bottom line financial measures. Olsen (2004, cited in Swamidass, 2007) is stated that â€Å"lean/JIT firms tend to have better return on equity†, since lean/JIT is associated with low inventories. However, according to Fullerton and McWatters, (2002), the use of financial performance measures under the present competitive market conditions appears unsustainable due to various reasons. Therefore, performance measurement system of a corporate using JIT production system should support basic variations such as increasing product or service quality, continuous development and reducing the losses (Hendricks, 1994). 79 Chart (1): General Plan of Financial Automation 3. Research methodology The statistical society of the study includes the financial managers of the companies listed on Tehran Stock exchange (TSE). For this purpose, a number of 442 companies were selected from TSE website. From the entire number of the selected companies 36 companies were omitted from the list of listed companies of TSE following the session of Security Subscription Board on June 10, 2008. Eventually, the study was concentrated on 406 companies from 36 different industrial sectors. The statistical community in this research could be all of companies all over the country, but with different directions and limitations of the personal facilities and we limited statistical community and selected 100 companies listed on TSE. Research data collection instrument is a questionnaire which has been standardized in the academic community and validity of it considering the opinions of specialized literatures and comments of expert managers in relevant areas were analyzed and its validity is acceptable. In order to determine the proper size of the specimen and calculate the Cronbach ? coefficient a pre-testing process was conducted. The methodology of the process was as follows: A number of 13 questionnaires of which narration style had been confirmed were distributed by the researcher among the financial managers of the admitted companies of TSE as an initial specimen. The original data showed that, on average, the affectivity of financial expenses in order to establishing an internet financial reporting was rated at 13. 90 with the standard deviation of 4 within the range of 5-25. In the society average comparison test, with the constant number of 15 (the middle point of the above range), at least, a number of 86 persons at 5% error rate provided 80. 26 percent level of ability. In order to testing of hypotheses, T-Test was employed in the study which it fits to the testing of hypotheses. Research hypotheses H1: middle managers prevent the establishment of AIS in financial units. H2: organizational structure prevents the establishment of AIS in the company's financial units. H3: organizational culture prevents the establishment of AIS in financial units. H4: financial problems prevent the establishment of AIS in the company's financial units. H5: labor prevents the establishment of AIS in financial units. H6: environmental factors influencing on AIS prevent the establishment of the company's financial units. 4. Data analysis In this section, demographic information of participants based on research experience and education level is presented in Table 1. 80 Table 1: General information of participants Item Variable Diploma Educational background B. A M. A Field of the Study Accounting Management Lee than 5 years Experience 6-10 years 11-15 years Manager Designation deputy expert clerk Testing of hypotheses Frequency 26 59 12 59 38 62 28 7 11 7 41 38 Percentage 26. 80 60. 80 12. 40 60. 80 39. 20 63. 90 28. 80 7. 20 11. 30 7. 20 42. 30 39. 20 H1: middle managers prevent the establishment of information systems in the company's financial units. In order to testing of the first hypothesis, One sample T-test is employed which the detail has presented in Table 2. Table 2: The results of testing first hypothesis Test Value=20 First hypothesis Middle managers H0: M = 20) (H1: = M> 20 degrees of freedom T Significant level 0. 001 Information contained in Table 2 shows the level of significant 0. 001, and since the significant level is less than 0. 005 shows the acceptance of hypothesis, so H0 is rejected and H1 is approved. H2: organizational structure prevents the establishment of accounting information system in the company's financial units. Table 3 shows the results of testing of hypothesis, according to the results of Table 3 the research hypothesis is accepted. Table 3: the results of second hypothesis The second hypothesis Organizational structure HO: M = 7) (H1: = M; 7 Test Value=7 Degree of freedom T Significant level 0. 001 Table 3 shows 0. 001 level of significant, and since the significant level less than 0. 005 is accepted, hypothesis H0 is rejected and, H2 is approved. Therefore, organizational structure is one of the barriers of the establishment of AIS in companies listed on TSE. 81 H3: organizational culture prevents the establishment of accounting information systems in financial units. For the above hypothesis single-sample T-test using SPSS software with confidence level of 0. 095 used and the results are mentioned in Table (4) Table (4): the results of testing third hypothesis Test Value=12 The third hypothesis Organizational culture HO: M = 12) (H1: = M; 12 degree of freedom T Significant level 0. 001 Information contained in table (4) shows significant level of 0. 001, and since the significant level less than 0. 005 is, hypothesis H0 rejected, so H3 is approved. Therefore, organizational culture prevents the establishment of AIS in companies based in financial units of companies. H4: financial problems prevented the establishment of accounting information system in the company's financial units. Table (5): the results of fourth hypothesis Test Value=6 Fourth hypothesis Financial problems HO: M = 6) (H1: = M> 6 degree of freedom T Significant level 0. 001 Information contained in the table (5) show 0. 001 level of significant, and since the significance level less than0. 005, H0 rejected, therefore, financial problems prevent the establishment of AIS in companies listed on TSE. H5: Labors don’t prevent the establishment of AIS in financial units. For the above hypothesis one- sample T-test, using SPSS software with confidence level of 0. 95 is used and the results are mentioned in Table (6). Table (6): the results of testing fifth hypothesis Test Value=17 fifth hypothesis Labors HO: M = 17) (H1: = M> 17 degree of freedom T Significant level 0. 001 Information contained in the table (6) shows 0. 001 level of significant, and since the significance level less than0. 005, H0 rejected, so H5 is approved. Hence we can say that issues related to human resources are of barriers in the establishment of accounting information system in companies located in stock exchange. H6: environmental factors affecting accounting information system prevent the establishment of accounting information system in companies' financial units. For the above hypothesis single- sample Ttest using SPSS software with confidence level of 0. 95 used and the results are mentioned in Table (7). 82 Table 7: Results of testing sixth hypothesis Test Value=12 sixth hypothesis Environmental factors HO: M = 12) (H1: = M; 12 degree of freedom T Significant level 0. 001 Information contained in the table (7) shows 0. 001 level of significant, and since the significance level less than 0. 05, is accepted, H0 rejected, so H6 is approved. Hence, we can say that environmental factors can also regard as barriers in establishment of accounting information system in companies located in stock exchange. 5. Conclusion and Discussion: Middle managers prevent implementation of AIS in companies listed on TSE. Results of above hypothesis through single-sample T-test with confidence level of 0. 95 r epresent the acceptance of this hypothesis of the research. It means that middle managers are of affecting barriers in failure of implementation of accounting information system in companies located stock exchange . There is a meaningful relation between middle managers and implementation of accounting information system. Further, environmental factors prevent the implementation of AIS listed companies on TSE. Results of the above hypothesis through single-sample T-test with confidence level of 0. 95 represent the acceptance of this hypothesis in the research. It means that organizational structure is one of affecting barriers in failure of implementing AIS in companies listed on TSE. There is a meaningful relation between and between organizational structure and implementation of AIS. By the way the results reveal that organizational culture prevents the implementation of AIS listed companies on TSE. Results of the above hypothesis through single-sample T-test with confidence level of 0. 95 represent the acceptance of this hypothesis in the research. It means that organizational culture is one of the affecting barriers in failure of implementing accounting information system in companies located in stock exchange. It means that there is meaningful relation between organizational culture and implementation of accounting information. The authors come to conclusion that several barriers lead to implementation AIS on listed companies on TSE. In such a condition it seems that without solving these problems the Iranian companies do not enjoy of advantages of AIS, so it cause very big problem in near future. In order to solving these problems all together from top managers to simple clerk should give hand in hand and at least reduce these problems in competition world. 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Management and Organisational Behaviour - Essay Example Management is essentially an act of fulfillment of objectives through people, and efficient management implies getting the maximum output from the people. Therefore, a good manager must encourage teamwork and enhance team spirit by meeting the needs of both the individual and the team. This paper focuses on various theories of management and demonstrates their application with the help of a case study. Roles of a Manager – case of Oliver A business organization is a complex body that requires efficient and skilful management for proper running. A manager has multiple functions and responsibilities. Based on this theory, Henry Mintzberg identified ten essential managerial roles that are required for the fulfillment of the company’s objectives. The ten managerial roles are – 1) Figurehead, 2) Leader, 3) Liaison, 4) Monitor, 5) Disseminator, 6) Spokesperson, 7) Entrepreneur, 8) Disturbance-handler, 9) Resource-allocator, and 10) Negotiator (Watson & Gallagher, 2005, p.34). He has further categorized them in three groups as shown in Table 1. Table 1: Interpersonal Roles Informational Roles Decisional Roles Figurehead Monitor Entrepreneur Leader Disseminator Disturbance-handler Liaison Spokesperson Resource-allocator Negotiator (Lussier & Achua, 2009, p.10) The interpersonal roles define the authoritativeness of the manager and involve maintenance of a positive relationship with the employees. In figurehead role, the manager performs symbolical or ceremonial duties that can be of either social or legal nature. For instance, he needs to do social functions like attending to candidates for jobs, presenting awards, entertaining clients, receiving official visitors, and attending farewell dinners. As legal function he has the authority to sign official papers like cheques, vouchers and contracts. In leader role, a manager supervises and evaluates the performances of employees, hires new employees and provides them training. In liaison role, he maint ains contact with people outside the organization to form a network of services. The second group which is informational roles involves a major part of managerial functions which is to gather and convey information from the employees. In monitor role, the manager needs to gather information regarding problems and solutions of the organization. This can be done by reading journals, magazines, newspapers or by attending meetings inside or outside the organization or by observing and comparing the business activities of the competitors. In disseminator role, the manager receives information from internal sources like higher level of management or from external sources. He in turn transmits the information to the employees through group meetings or emails. In spokesperson role, the manager provides information about the organization to outside people like consumer groups, press, TV and government officials and any other communities who have vested interest in the organization. The third group which is decisional roles involves assessment of various possibilities before making strategies for the benefit of the organization. Such decisions may affect few employees or can affect the entire organization. In entrepreneur role, a manager develops ideas for new projects, makes decisions to abandon any project, develops innovative ideas and new products. In disturbance-handler role, a manager finds means to resolve external or internal

Ethics Case Study Essay Example for Free

Ethics Case Study Essay Utilitarianism Utilitarianism would not qualify Tom falsifying data as unethical, as it would have the greatest benefits to the larger quantity of stakeholders whilst only bringing a limited amount of harm. This can be seen through the stakeholders who benefit from Tom gaining full-time employment such as; his parents, the child receiving the life-saving sponsorship, the charity and the government, as Tom could start paying his HECS debt. One stakeholder who would be harmed by Toms dilemma is the small accounting firm in Milton. Ultimately the risk of this actually harming the business due to his lack of experience would be minimised due to Tom being tightly supervised for the first year of work. Egoism also maintains that the agent should do whatever they ought to do if it benefits themselves. In Toms moral dilemma, if he falsifies his CV in order to achieve full time work, he is acting on the natural instinct of self promotion that egoism sees as ethical. Kantian ethics Kantian ethics maintains that there are some things that are deemed wrong in themselves, apart from their consequences. This means that Tom should regard the act of lying as wrong; regardless whether it brings about good results. Kants categorical imperative states I should never act except in such a way that I can also will that my maxim should become a universal good† (Kant, 1996). In universalising a law that is not in relation to specific circumstances, it allows moral issues to be solved by pure rationality. When applying Toms situation to Kants universalisation theory, a maxim for Toms situation could be â€Å"one should falsify data if it benefits them†. This could not be accepted as a law universally as falsifying data could not be consistent, as eventually all data would be deemed tainted and therefore unusable, leading to the act of giving information to its own demise. If it  were ethical for Tom to falsify data, Tom would have to accept that it would therefore be ethical for everyone to do so. If everyone was free to fake data, universal lying would weaken trust in communication. Kant also states â€Å"act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply means† (Kant, 1996). If Tom falsified his CV, it would result in disrespect as the owners of the accounting firm are basing crucial business decisions on inaccurate data, which is unethical. Virtue ethics Applying virtue ethics is based on evaluating how virtuous Tom is, not just the actions or consequences of his moral situation. A virtue that can be applied from Aristotles Doctrine of the Mean is ‘indifference’ meaning good deeds are done for their own sake and not for personal recognition. The two vices of indifference are false modesty (deficiency) and careerist (excess). Assuming Tom decided to fake his CV he would display characteristics in the vice of excess meaning he is a careerist and would not be classified as virtuous, and therefore unethical. Ranking of Ethical Theories 1. Utilitarianism/Egoism Utilitarianism is in line with many fundamental morals that society intends for us to adopt. For example, two fundamental ethical principles are that we must avoid doing harm to others and aim to do good. When I consider certain actions or decisions, I usually evaluate them in terms of their consequences. Although it disregards the ethical element of an action, it looks at the benefits it can cause in solving my moral dilemmas. Egoism also  usually takes part in most of my moral decision making. I usually base many of my decisions on the consequences I can achieve, therefore find this most useful. 2. Virtue Ethics I use virtue ethics to solve some moral issues due to the benefit of gaining insight into emotional and personal values in relation to the action. I believe people are emotionally involved in ethical reasoning making virtue ethics a better way to assess whether an action is ethical or not. I find this theory somewhat useful as I believe every situation cannot be branded under absolute rules, as in Kantian Ethics. 3. Kantian Ethics Although Kantian seems like the ‘right’ moral structure to follow it is extremely idealistic and would not necessarily result in good outcomes for me or the greater good of everyone. I think due to it being a rigid system, in certain situations for my moral dilemmas, it could not be used as Kantian ethics does not factor the importance of character and motivation in making ethical judgements. Therefore I dont believe I would assess the ethics of a dilemma accurately, finding this least useful. PART B Socially responsible organisations should aim to minimise their negative impacts, but the fast food industry faces extreme public criticism due to the effects it is having on some main stakeholders; consumers and communities. Fast food consumption is potentially harmful and if businesses adopt Friedmans’ shareholder theory by only focusing on short-term profit goals, the long-term welfare of customers is compromised. For example, Bowman, Gortmaker Ebbeling (2004), indicate that â€Å"energy derived from fast  food is  10% of a childs average recommended daily intake, 5 times more than the 1970’s†. This highlights the need for somebody to not only take responsibility but action. â€Å"Advertisers spend 100s of billions of dollars a year worldwide encouraging, persuading and manipulating children into a consumer lifestyle† (Beder, 1998), leading to devastating consequences. The narrow view by Friedman, where businesses adopt the ‘let the government do it’ theory is criticised as society now has a greater concern for a better quality of life which businesses could help achieve. Supporters of Freeman maintain that fast food corporations have a responsibility to their stakeholders and should acknowledge potential health risks associated with consuming fast food. Highly advertised food corporations should have responsibilities beyond enhancing their profits, because they have great social and economic power in society. This undeniable power discounts Friedman’s theory that the ‘business can’t handle it’. If corporations have such power, they should also take responsibility for its actions in these areas. Nature Neuroscience published a study linking â€Å"effects of fast food to those of addictive substances such as cocaine, heroin and nicotine† (Klein, 2010). If tobacco packaging in many countries legally have to display health warnings due to smoking being addictive, why does fast food packaging not have responsibility to do the same? Businesses who adopt a narrow view on CSR compromise stakeholders welfare. For example, on January 1954 in the US â€Å"main tobacco companies published a statement named ‘A Frank Statement to Cigarette Smokers’ reaching an estimated 43,245,000 Americans† (Cummings, 2002). The advertisement promised consumers that cigarettes were safe and denied all health risks to consumers. This resulted in millions of people dying due to lacking concern stemming from the companies understating health effects in a blind effort to create profit. This scenario could almost determine the future of fast food industries being irresponsible about  marketing to addicted consumers. If major food corporations dont undertake measures to outweigh unhealthy promotion to children and society, they might too face the same consequences.

Limiting Factors in a Business Situation

Limiting Factors in a Business Situation (a) Explain what a limiting factor is and what sort of things can become limiting factors in a business situation? (16 marks) Limiting factor is any factor that restricts a company or an organisations activities. In other words, limiting factor is a factor which is limited or not enough provide to the company. Limiting factors in an organisation can be labour hours, raw material, machine hours or space. For example, when sales demand excess the productivity capacity, the company do not have enough resources to produce the products, the scarce resource will be the factor that restricts the companys activities. Hence, the scarce resources should be identified to ensure company has enough resources to produce their products as many as their wish. By using limiting factor, we can maximise the profit when obtained the greatest possible contribution to profit each time. Example1: A B C Contribution per unit of output RM 24 RM 20 RM 12 Machine hours required per unit of output 6 hours 2 hours 1 hours Estimated sales demand 3,000 units 3,000 units 3,000 units Required machine hours 18,000 hours 6,000 hours 3,000 hours The machine hour is limited to 18,000 hours for the period because of the breakdown of one machine. Consider Example 1. From the example 1, we know that the company required total 27,000 machine hours to produce the total sales demand of the product A, B and C that they estimated. However, the company only has 18,000 machine hours for the period because of the breakdown of one machine. In this situation, companys activities are limited by the machine hours. When we looking at the above information, we will think that the company should produce the product A first since the contribution per unit of product A is the highest, but this could be wrong. This is because produce each unit of product A required 6 machine hours, but product B required 2 machine hours and product C required 1 machine hours only. So, the company can produce 3,000 units of product B and C respectively first, after that just produce the product A with the remaining machine hours. In other words, if the company concentrates on produce the product A, there will no machine hours left to the company to produce B and C. In order to maxi mize the companys profit, we should use limiting factor to calculate the greatest possible contribution per profit for each product and rank the profitability of the product to obtain the optimum production plan. (b) Explain the techniques that have been developed to assist in business decision- making when single or multiple limiting factors are encountered (16 marks) Single limiting factor- Limiting factor analysis When single limiting factor are encountered, we have to use limiting factor analysis to help companies to identify the scarce resources and maximise profit by using the best combination of available resources. In limiting factor analysis, we should identify the bottleneck resources first. Secondly, we should calculate the contribution per unit for each product. Next, we can calculate the contribution per unit of the bottleneck resource for each product after we get the contribution per unit of each product. After this, we can rank the products from the highest to the lowest in sequence based on contribution per unit of bottleneck resource. Finally, we can allocate the resources from the highest contribution per profit to the lowest contribution per profit by the ranking until the resources are used up. By doing so, we can obtained the greatest possible profit when resources are limited by single limiting factor. Example 2: X Y Machine hours per units 3 hours 4 hours Sales demand 2,000 units 3000 units RM RM Selling price 32 50 Less : Direct Material 10 20 Direct Labour 5 8 Variable Overhead 5 8 20 36 Contribution 12 14 The supply of materials for the period is unlimited, but the machine hours are limited to 15,000 hours. In order to maximize the profit, we should using limiting factor analysis to solve the problem when there is only one limiting factor. Step 1: Identify the bottleneck resource. At sales demand level: Sales demand Machine hours per unit Total machine hours X 2,000 units 3 hours 6,000 hours Y 3,000 units 4 hours 12,000 hours 18,000 hours Thus, machine hours are the limiting factor. Step 2: Calculate the contribution per unit for each product. The contribution has been given at the above. X Y Contribution per unit RM 12 RM 14 Step 3: Calculate the contribution per unit of the bottleneck resource for each product. To calculate the contribution per unit of the bottleneck resource for each product, the formulae is: Contribution per units of the machine hours = Contribution Machine hours Product X = RM 12 3 hours = RM 4.00 Product Y = RM 14 4 hours = RM 3.50 Step 4: Rank the products from the highest contribution per machine hour to lowest contribution per machine hour. Production should be concentrated on product X first, up to maximum sales available, then product Y. Step 5: Finally, allocate the available resources using that ranking that we decided at step 4 and calculate the maximum contribution. Production plan Units produced Machine hours per unit Total machine hours Balance of machine hours 15,000 hours Product X 2,000 units 3 hours 6,000 hours 9,000 hours Product Y 2,250 units 4 hours 9,000 hours So, the maximum contribution is as follows: RM Product X ( 2,000 units x RM 12) 24,000 Product Y (2,250 units x RM 14) 31,500 55,500 Multiple limiting factors- Linear programming We can use limiting factor analysis when there is one limiting factor. However, when there is more than one of scare resources which restricts organisations activities, we can use linear programming to solve the problem. Firstly, we must define the variances when using linear programming. Then, we can define and formulate the objective. After formulate the objective, we also must formulate the constraints. Next, draw a graph to identify the feasible region and get the optimum production plan from the graph. Finally, we can solve the problem and get the maximum contribution by doing so. Example 3: A B Contribution per unit RM 20 RM 10 Machine hours per unit 6 hours 3 hours Kilos per unit 4 kilos 8 kilos Maximum available : Machine hours = 18,000 hours Kilos = 24,000 kilos What should be the production plan? To answer the example 3, we should use linear programming to get the optimum production plan because there is two or more of scarce resources. Step 1: Define the variances Let x = the number of units of the product A. y = the number of units of the product B. Step 2: Define and formulate the objective function. The objective is to maximize the contribution C, given by: Maximum contribution = 20 x + 10 y Step 3: Formulate the constraints. The limitations here are machine hours and kilos. For the machine hours, product A required 6 hours and product B required 3 hours machine hours. So, total machine hours required = 6 x + 3 y For the kilos, product A required 4 kilos and product B required 8 kilos. So, total kilos required = 4 x + 8 y Constraints Utilised Available Machine hours 6 x + 3 y 18,000 Kilos 4 x + 8 y 24,000 Step 4: Draw a graph and identify a feasible region. For the equation 6 x + 3 y = 18,000 machine hours When x = 0, y = 18,000/ 3 = 6,000 When y = 0, x = 18,000/ 6 = 3,000 Draw a straight line between the point (0, 6000) and (3000, 0) on the graph to represent the line for machine hours constraint. For the equation 4 x + 8 y = 24,000 kilos When x = 0, y = 24,000/ 8 = 3,000 When y = 0, x = 24,000/ 4 = 6,000 Draw a straight line between the point (0, 3000) and (6000, 0) on the graph to represent the line for kilos constraint. The graph is shown as below: The original constraints were Step 5: Determine the optimal solution Calculate the total contribution at each point P, Q and R Point P = RM 20 (0) + RM 10 (3,000) = RM 30,000 Point Q = RM 20 (2,000) + RM10 (2,000) = RM 60,000 Point R = RM 20 (1,500) + RM10 (0) = RM 30,000 Point Q gives the maximum contribution. Step 6: Answer the question The optimal point is at x = 2,000 and y = 2,000. This gives a maximum contribution of C = (20 x 2,000) + (10 x 2,000) = RM60, 000 (c) Explain the management idea known as throughput accounting. State and justify your opinion on whether or not throughput accounting and limiting factors are the same thing. (18 marks) For every company to reduce it costs and improve the profitability of the company, managers will use cost accounting to help them on decision-making. Hence, Theory of constraints (TOC) or Throughput accounting (TA) is another method for decision-making apart from Standard Based Costing, Activity Based Costing and Marginal Costing. TOC/TA is a new management accounting approach based on factors identification when the constraints are restricts companies to achieving their goals and reduces companys profits. Throughput accounting is used when there are few constraints only, usually just one. The constraint can be a resource, company policy or management mindset. According to Goldratts ideas, TOC is forecasting on a limit capacity at certain critical points in any production plan. Therefore, TOC maximise organisations profit by increasing the producing speed through an organisation in order to eliminating bottlenecks. Additionally, throughput accounting is not costing because it does not include variable and fixed expenses, and overheads to products. Thus, throughput accounting helps managers to get better management decision in order to improve organisations profits by three measurements. They are: Throughput (T) is the rate of money that a company produced, throughput is total sales (S) less total variable costs (TVC), usually is cost of raw materials ( T = S TVC ). However, T exists even there is only one product are sold. Besides, finished goods of inventory in a warehouse that not yet sold are not included. Investment (I) is total amount of money that invest in a new system to enhance its ability to improve the capacity, for examples machinery. Operating expenses (OE) is all others expenses except the total variables cost when calculate the throughput. Basically, OE is total costs to operating the production system, for examples maintenance, utilities, rental, etc. Fixed or partially fixed costs are no difference in throughput accounting. On the contrary, there have either total variable cost or operating expenses in throughput accounting. Therefore, throughput accounting use difference formulas to make difference types of accounting decisions by combined the throughput, total variable costs and operating expenses: Net profitÂÂ  (NP) = Throughput Operating Expense = T-OE Return on investmentÂÂ  (ROI) = Net profit / Investment = NP/I ProductivityÂÂ  (P) = Throughput / Operating expense = T/OE Investment turnsÂÂ  (IT) = Throughput / Investment = T/I According to Dr. Goldratt, we can use the above formulas to get the right decision when making a decision that related to changes in revenue, expenses or investments, which must get a positive answer from one out of three questions below: Does it increase throughput? Does it reduce operating expense? Does it improve the return on investment? Finally, there are five steps established by Goldratts in the TOC to help managers maximize the throughput and then achieve organisations goals. The five steps are as follows: Identify the system constraints. There is either an internal constraint (in production, engineering or planning.) or an external constraint (in the market)? The constraint is a resource or a policy? Decide how to maximise the output from the constraint. All other activities are prepared subject to this decision. Non-constraints must be subject to constraints. Consider the appropriate level of resources once the resource constraint has been identified. Therefore, the capacity constraints can be improved. Enhance the systems constraints. Once constraint has been corrected, return to Step 1 to determine the next most serious constraints and duplicate the above steps. In my opinion, throughput accounting and limiting factor is not the same thing but there are similarities and differences in between throughput accounting and limiting factor. For example, throughput accounting and limiting factor are using to assist companies identify bottleneck resources instead to maximise companies profits. However, throughput accounting is used when there are few constraints; normally just one but limiting factor is used when there are one or more than one constraints. Besides, limiting factor is focus on working to obtain greatest contributions while throughput accounting is focus on some critical areas that have limited capacity at any production plan. In addition, limiting factor maximise the organisations profit by using the best combination of available resources but throughput accounting is maximise the profit by increase the producing speed through organisation to eliminate bottlenecks. Throughput accounting calculates the products throughput as sales price minus total variable costs. Variable costs or in other words cost of materials in throughout accounting included direct material costs only, labour and overhead costs are fixed and categories to total factory costs. In contrast, limiting factor calculates contribution as sales price minus variable costs but labour and overhead costs are part of variable costs in limiting factor, this is difference from throughput accounting.

Amartya Sen The Idea Of Justice Review Philosophy Essay

Amartya Sen The Idea Of Justice Review Philosophy Essay Justice is the quality of being just or fair. Justice can also be looked upon as the judgment involved in the determination of rights and the assignment of rewards and punishments. Justice can also be the concept of moral rightness based on ethics, rationality, law, natural law, religion, fairness, or equity (Princeton Web 2010). Individuals may look at justice many different ways, but what factors play into deciding what truly is justice? Must you look at fairness in order to be just, must you look at rationality, or even equality and liberty? There will always be debates about how to achieve justice. But due to so many factors being involved, we may never understand what justice truly is. I believe that in order for one to be just, or even to make a just decision on a matter that factors such as rationality, fairness, human rights, and the well being of all parties involved must be taken into account. But this is just my opinion many of todays philosophers often argue what it mean s to be just or even to achieve a completely just state in our society, along with the decisions we make on a daily basis. To call attention to a specific philosopher, Amartya Sen undoubtedly makes a solid stance on what justice truly means. The Idea of Justice is Amartya Sens assessment of political philosophy. He explores what justice really means and has come up with alternatives to the existing model. Sens philosophic arguments are shown by an exceptional set of stories drawn from literature, history, and current events occurring in our society today. There are not many main thoughts of the book, but the thoughts presented are revisited throughout each chapter, to help the reader see the bigger picture. You must be able to examine each idea Sen presents in his text, as they all come together, when being able to achieve complete justice. Although justice may never fully be reached entirely in any society, Sen does an amazing job giving examples and putting each of his arguments in basic text, so that it is easy for the reader to understand what he is talking about. The specific philosophic arguments of the book are highly important when it comes to the ideas of justice. The Idea of Justice is divided into four main pa rts. Part one contains several of Sens most important thoughts throughout the book. They include, reason objectivity, institutions persons, voice social choice, impartiality objectivity, and closed open impartiality. In part two, forms of Reasoning, Sen discusses a number of themes including rationality, plurality of impartial reasons, and rationality other people. Part three contains information on the capabilities approach, lives, freedoms capabilities, and equality liberty. The final part of Sens text speaks to public reasoning democracy, including sections on justice the world, human rights global imperatives, the practice of democracy, and democracy as public reason. Throughout each of these main sections Sens argues very strong points, I will try to give you a summary of the main points throughout each chapter of Sens book along with where he stands on certain topics and how I can relate and feel about what he believes. To call your attention to the preface/introduction, Sen specifically states that what he is presenting here, is a theory of justice which aims to clarify how we can proceed to address questions of enhancing justice and removing injustice, rather than to offer resolutions of questions about the nature of perfect justice (Sen IX). The Introduction elaborates on two approaches to justice, which include the comparativist framework the social contract framework. The comparativist framework is presented using the realization comparison approach. The realization approach prioritizes the social understanding of advancing justice and removing injustice in real societies with their existing institutions. The social contract framework is presented using the transcendental institutionalism approach which was led by the works of Thomas Hobbes. The transcendental institutionalism approach concentrates on perfect justice and the institutions that would be recognized in such a perfectly just societ y. There are two distinct problems indentified here which Sen engages. First it concentrates its attention on what it identifies as perfect justice, rather than on relative comparisons of justice injustice (Sen 6). Sen goes on to explain that this approach tries to only identify social characteristics that cannot be transcended in terms of justice, and its focus is thus not on comparing feasible societies, all of which may fall short of the ideals of perfection. Also it is intended to identify the nature of the just, rather than finding an alternative being less unjust than another. The second major issue with this approach is described by Sen Saying that in searching for perfection, transcendental institutionalism concentrates primarily on getting the institutions right, and it is not directly focused on the actual societies that would ultimately emerge. We need to focus on how change within the actual society is going to be completed, not by getting institutions perfect to the point that they are just institutions. This would do nothing for emerging societies we need to look at society as whole in order to achieve perfect justice by not having only perfectly just institutions. People are sti ll going to act how they choose as well as behave how they choose, so we must focus on society as whole. The nature of the society that would result from any given set of institutions must, of course, depend also on non-institutional features, such as actual behaviors of people and their social interactions (Sen 6). I do agree with Sen in this theory of justice, it should first and foremost, serve as a basis for practical reasoning. Chapter one is to defend a notion of objectivity in our average thoughts of justice.   Sen argues for the idea that we should understand reason as the final judge of our ethical beliefs. One must be able to justify and understand his reasoning by critically evaluating reasoning for ethical beliefs. The necessity of relying heavily on reason is important as Sen describes in his work. Sen says, the case for reasoned scrutiny lies not in any sure-fire way of getting things exactly right (no such way may exist), but on being objective as we reasonably can (Sen 40). Sen believes that one must be able to rely on reason in order to fully justify and decide on our ethical beliefs. I must agree with Sen on this point, when he argues that this approach is not going to be one that will allow and individual to get things exactly right, but allow us to be as objective as we possibly can. By scrutinizing your own reasoning, it is highly probable that you will arrive at the best possible ethical decision. We should not get caught up in being overconfident in the decisions of our own reasoning, as this could add flaws to our decisions. The remedy for bad reasoning lies in better reasoning, and it is indeed the job of reasoned scrutiny to move from the former to the latter (Sen 49). This quote explains it all, it is imperative that one must critically scrutinize his/her own reasoning for a decision, and that without this scrutiny theres great chance for bad reasoning. To avoid this, one must critically scrutinize his/her reasoning of choice or decision. Moving to another argument from Sen, I share the following quote. Justice is rooted in fairness and fairness can be broadly be seen as a demand for impartiality (Sen 54). In order for one to be completely just, the decision must be rational and fair, if a decision is not looked upon as being fair for all parties, you arrive at issues of impartiality. Sens gives his example of three children and a flute, all children having a rational reason as to why they deserve the flute. But if there is not a common vested interest on one solid set of principals between all parties, we run into an issue of what the true just decision is. Institutionally, we cannot address such issues as these. Individuals still have their own morals and values and going to make their own decisions regardless of what is taught. One of the most difficult things is to change an individuals moral values and beliefs, institutionally this cannot be done. Values as these are usually learned at the home-base from parents and guardians and are instilled in us from a very young age. It i s imperative that we do not look at what truly is a just society in order to achieve a just society. As actions such as these will get our society nowhere Sen looks at the social choice theory as an approach to justice as well. Social choice theory is concerned with the relationships between people, their preferences social choice. For example a group of individuals such as a committee making a decision in a voting process, individuals in the group may have different preferences over options that are available to them. This approach deals with the principles of aggregations of preference. Aggregation of social choice may be impossible if the process of choice is to satisfy a set of reasonable conditions. With such reasonable conditions, this could alter the general consensus of a social choice being made by such a committee or group. Even some very mild conditions of reasonable sensitivity of social decision to what the members of society want cannot be simultaneously satisfied by any social choice procedure that can be described as rational and democratic (Sen 93). We can however, become more informally sensitive, if we choose to jus t try and do better rather than to meet the criteria of being fully rational or just. One may use social choice theory as a framework for reasoning, rather than to try and use it completely to achieve justice. Position of observation and knowledge is another important approach Sen discusses in his work. What we observe depends on our position by means of the things that we observe. What individuals decide to believe is based on what we view. How one decides to act relates to his/her beliefs on a particular subject. Observations, beliefs, and actions are vital to understanding and arriving at sensible reasoning. To Sen, Objectivity is a position-dependent phenomenon (Sen 157). This issue [positionality] is quite important for the formulation of a theory of justice and, more specifically, for exploring a theory that gives a special role to public reasoning in the understanding of the demands of justice (Sen 167). It is important here to understand that there is no single way to master a way of making sense of the world or our experience in it. No decision made could ever be rationalized in every single persons mind, something such as this is physically not possible. There are just too many d ifferent people in our society today for that to be able to happen. There will always be a flaw in certain reasoning in some persons view. There is just no way, that every single person in the world would be satisfied with a decision, because we all observe, understand, and put reason into different perspectives. Some placing more weight on rational choice, critical scrutiny, positional objectivity, reasonable behaviors sustainable reason when it comes to making a decision. There are just too many approaches for everyone to be able to agree. So we must take into account all perspectives of others when it comes to justice and just decision making, as Sen states, we must be sensitive to others (206). Respect of others views is exceedingly important here. To move forward, the capabilities approach is also a major theme within the work. The capabilities approach focuses on human lives, and not just on the resources people have, in the form of owning or having use of objects of convenience that a person may possess (Sen 253). The approach emphasizes purposeful capabilities substantive freedoms, such as the ability to engage in economic transactions, or participate in political activities. Poverty is understood as capability deficiency in Sens view. The emphasis is not only on how human beings actually operate but also on their having the capability to do so, which is a practical choice, to operate in important ways if thats what they choose to do. Someone could be stripped of such capabilities in many ways. Ignorance, government oppression, lack of financial resources, and false comprehension, are ways in which one may be stripped of such capabilities. Possession of capabilities strongly implies a responsibility for making use of the m to help others when possible, especially when it comes to the less fortunate. If someone has the power to make a difference that he or she can see will reduce injustice in the world, then there is a strong and reasoned argument for doing just that (Sen 271). If you can see that your capabilities go beyond that of the less fortunate by any means, and that they can be used in any positive manner weather be financial or emotional, I believe that there is no doubt that one should be obligated to reduce injustice in some way shape or form if at all possible. Again this only being an approach, this is not the end all-be all in deciding justice, but undoubtedly can make a difference, and I would have to agree. In basic terms, if you are capable, than you should do something to reduce injustice. I dont feel that you are obligated to do so, but any reduce in injustice, is a step in the right direction. Sen goes on to support the idea that democracy is a universal value, he differentiates between the institutional structure of the contemporary practice of democracy, which is largely the product of European and American experience over the last few centuries (Sen 322-323). In my opinion, one should not assume that because a particular type of institutional structure is up and running, such as elections, voting being counted properly, and etc, that a satisfactory level of democracy has been achieved. Sen believes that having too much institutional focus on democracy has caused particular trouble at the global level. Sen believes that, an uncont rolled media is important to the operation of democratic societies. Sen explains in the text that this contributes to human security by giving a voice to the defenseless and deprived by subjecting the government to criticism from such individuals. I believe this power is key I giving people courage, power, and the ability to express feelings towards actions that are being taken. We sort of put power in the hands of individuals who are not as capable as other, which I do agree with also, because this is a simple way in which we can empower individuals to voice opinions in a manner which may not fall on death ears as usual. We can place emphasis on individuals human rights here, which an important factor concerning human rights is to protect individuals freedoms, thus freedom of speech freedom of press being highly important. Sen says that human rights are moral rights, strong ethical pronouncements as to what should be done (357). According to Sen, reasoning concerning justice should not be restricted to one state or population, but rather be global. If the importance of public reasoning has been one of the major concerns of this book, so has been the need to accept the plurality of reasons that may be sensibly accommodated in an exercise of evaluation (Sen 394). We must look at every possible angle that the book discusses in order to find an answer to the idea of what justice truly is. If you cannot effectively rationalize all aspects of the idea of what justice is, it will be difficult for you to be able to ever understand what justice is. As Sen states the reasons may sometimes compete with each ot her in persuading us in one direction or another in a particular assessment, and when they yield conflicting judgments, there is an important challenge in determining what credible conclusions can be derived, after considering all argument (Sen 394). Which I most certainly agree with, it would in fact be a difficult task to determine a credible solution, but it is imperative that you must consider all of the arguments at hand.