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CHAPTER 19
EMERGING MANAGEMENT PRACTICES
QUESTIONS
1. Business process reengineering, BPR, is a method of examining processes to iden-
customer value to products or services.
2. BPR is a tool that leads to revolutionary changes in operations. Often these changes
3. Downsizing is any management action that reduces employment and restructures
operations as a response to competitive pressures. To maintain or increase market
and the demand for labor is reduced. Layoffs are the inevitable result.
4. Expansion of operations around the globe has increased the workforce diversity of
different cultures, religions, and work habits.
interpreter.
5. In the United States, increased diversification has resulted from both the passage
mandates because managers believe a more diverse workforce offers advantages
in serving a diverse customer base.
6. ERP systems are packaged software programs that allow companies to automate
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ERP systems differ from prior generations of systems by the extent to which the
various feeder systems (e.g., payroll, accounts payable) are integrated into a
7. Strategic alliances are agreements between firms that result in their combining
competencies and resources to create products and services for customers. Strate-
provide those competencies. A strategic alliance is a flexible approach to combin-
ing the needed competencies to deliver high-quality goods and services to cus-
tomers at competitive prices.
8. Open-book management refers to the sharing (generally financial) of information
traditional view in which information is regarded as an asset that must be safe-
9. The implementation of open-book management changes the roles of accountants.
Accountants must no longer act as guardians of information but become purveyors
10. The first strategy is to clean up environmental contaminants after they have been
produced. The second strategy is to develop processes to reduce and recycle waste
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EXERCISES
11. a. Without training the firm will have a smaller probability of successfully im-
plementing the software. Additionally, training is necessary to understand the
mentation benefits.
b. Financial experts in a business play important roles in technology acquisitions.
implementation to ensure that the product functions as promised by the vendor
and confirm that the costs incurred and benefits generated are consistent with
the expectations.
12. The use of technology is commonplace in business today. Further, technology is
increasingly a major component of strategies being planned and executed by firms.
ing new technology and will not be capable of understanding whether technology
is serving as an effective strategic and operational tool.
(February 27, 2012), p. R5.
13. Each student will have a different answer; no solution provided. However, there is
changes in operations while TQM is more about seeking continual, incremental
improvements in operations.
15. Each student will have a different answer; no solution provided. However, the
attrition. Any layoffs of employees would be very disruptive to the business cul-
their operations before laying off employees.
16. Each student will have a different answer; no solution provided. One can make a
case that the layoffs are good news or bad news. The layoffs would be viewed as
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18. Whereas each student will have a different answer, the following points should be
made. At a minimum, the accounting and financial professionals can monitor
formal measuring and reporting systems, managers will be forced to consider how
their hiring, promotion, and performance evaluation criteria influence the objec-
tive of greater diversity.
19. Although each student will have a different answer, the following points should be
made. Through the Internet storefront much demographical information can be
of customers can be contacted using questionnaires, phone calls, and e-mail to ob-
tain input about details of features, price points, and quality expectations so that as
tionality can be followed.
20. While each student will have a different answer, the following points should be
made.
vide their perspectives on product design issues.
b. Much of the time required to bring a new product to market is consumed in the
c. Cost management efforts would benefit from a greater flow of information be-
tween marketing and engineering. One specific benefit should be a reduction
21. Before ERP software, information would be communicated sequentially through
the supply chain from the final consumer to the most upstream supplier. Infor-
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mation in real time throughout the entire value chain, coordination of activities
can occur across all links of the supply chain.
23. The establishment of a strategic alliance requires all of the systems and structures
required to form any new business. The financial professional should provide in-
product costing systems. Once the strategic alliance is operational, the financial
professional should contribute to the ongoing management of the business includ-
24. Although each student will have a different answer, the following points should be
made. The steel manufacturer may benefit from using open-book management
following reasons:
MONOPOLY is a widely known game with which managers and employees
are likely to be familiar.
flow concepts and subsequent accounting information.
There is only one winner in the game of MONOPOLY, and that is the individ-
ual who accumulates the most cash and property. Thus, the game reinforces
Training must also be provided to the accounting staff and managers. The ac-
countants must be trained to develop measurement systems for the games that are
in their games.
Managers must be trained to understand the role of games in open-book manage-
plementation.
25. While each student will have a different answer, the following points should be
made. Currently, employees in the production department are not evaluated or
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materials wasted).
The second step in implementing open-book management would be to train work-
ers to understand how the performance measures capture their actions and how
ing the quality of their output.
Finally, a game could be devised to use in training sessions that would demon-
26. a. An end-of-pipe strategy could be applied to this waste. An end-of-pipe strate-
gy is most applicable to situations in which the waste is of low toxicity, can be
eliminate or dramatically reduce the waste.
b. This waste is a likely candidate for total elimination. Because it is highly toxic
c. This waste is a candidate for recycling. Because the waste is nearly identical to
27. a. Dayton Industrial is considering a strategy of waste elimination/reduction
through process improvement.
Discounted cash flow methods would put the cash flows occurring in different
28. Each student will have a different answer; no solution provided.
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PROBLEMS
29. Each student will have a different answer; no solution provided.
are fired, the greater would be the loss suffered by the firm.
owners’ equity and cash caused by the reduction in profits for the period from
the direct cash costs of the layoffs.
fects of transactions on human capital.
31. a. The accounting system poorly captures all of the costs associated with down-
sizing. By design, the accounting system is a closed system that only measures
are not captured by any firm’s accounting system.
b. Opinions about the ethical responsibilities of employers to former employees
students will take the position that employers do have an ethical obligation to
provide a safety net to workers, especially those whose skills may be unique to
32. The accounting function can help top management identify talented managers.
important role in decentralization by providing the necessary plans, performance
measurements, and information systems.