COB 242 1st Edition Lecture 6 Outline of Current Lecture 1. Went over Chapter 14 homework- answers are posted on Canvas2. Review Chapter 1- a. Managerial Accountingi. Vital activities1. Planning2. Controlling3. Decision Makingb. PerspectivesCurrent Lecture1. Managerial Accounting- providing information to managers for use within the organizationa. Emphasizes: decisions affecting the future, relevance, timeliness, and segment performance i. Segment- a part or activity of an organization about which managers would like cost, revenue, or profit datab. Helps perform 3 vital activities:i. Planning- establishing goals and specifying how to achieve them1. Budget- detailed plan for the future that is usually expressed in formal quantitative termsii. Controlling- gathering feedback to ensure that the plan is being properly executed or modified as circumstances change1. Performance report- compares budgeted data to actual data in an effort to identify and learn from performancesiii. Decision making- selecting a course of action from competing alternatives1. What should we be selling?2. Who should we be serving?3. How should we execute?2. Perspectivesa. An ethics perspectivei. Statement of Ethical Professional Practice- ethical code adopted by the Institute of Management Accountants (IMA)1. General guidelines for ethical behaviorThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.2. What should be done if an individual find evidence of ethical misconductb. A Strategic Management Perspectivei. Strategy- a “game plan” that enables a company to attract customers by distinguishing itself from competitorsii. Customer value propositions- reasons to choose you over a competitor1. Customer intimacy- customer service, customized products2. Operational excellence- faster, convenient, cheaper3. Product leadership- higher quality productsc. An Enterprise Risk Management Perspectivei. Enterprise risk management- a process used by a company to identify those risks and develop responses to them that enable it to be reasonableassured of meeting its goalsd. A Corporate Social Responsibility Perspectivei. Corporate social responsibility (CSR)- a concept whereby organizations consider the needs of all stakeholders when making decisions1. Stakeholders:a. Customersb. Suppliersc. Stockholdersd. Employeese. Communitiesf. Environmental and human rights advocatese. A Process Management Perspectivei. Business processes serve the needs of a company’s most important stakeholdersii. Business process- a series of steps that are followed in order to carry out some task in a businessiii. Value chain- consists of the major business functions that add value to a company’s products and services1. Research and development, product design, manufacturing, marketing, distribution, and customer service iv. Lean production- a management approach that organizes resources such as people and machines around the flow of business processes1. Just in time production (JIT)- only produces units in response to customer ordersf. A Leadership Perspectivei. Intrinsic Motivation- comes from within us1. Be a CREDIBLE leader by having:a. Technical competence that spans the value chainb. Personal integrity- ethical and honestc. Strong communication skills- oral and written presentation skills2. Be a RESPECTFUL leader by having:a. Strong mentoring skills- to help others realize their potentialb. Strong listening skills- to learn from and respond to co-workersc. Personal humility- deferring recognition to all employeesii. Extrinsic incentives- motivate employees to achieve goals 1. There are many incentive options, but there can be consequences with some of themiii. Cognitive Bias- distorted thought processes1. To reduce the negative impacts, leaders should:a. Acknowledge their own susceptibility to cognitive bias b. Acknowledge the presence of cognitive bias in others and introduce techniques to minimize their adverse consequences2. Examples: Anchoring bias, confirmation bias, groupthink bias, optimism bias, and self-enhancement