Question

How is focusing on customer value changing managerial accounting? Why is the value chain important?

Answer 1

The business of an organization is very much dependent on the value of the products and services offered by an organization to the customers. It is important that the products and services offered by an organization have value to the customers. Only then an organization will be successful in achieving its objectives. The management is the premier body responsible for the operations and day to day affairs of an organization. It is up to the management to ensure that the business is not only making best and effective use of its resources but at the same time the products and services are relevant in the market have value to the customers. Thus, the management must focus its attention equally to the aspect of customer value addition along with other aspects of business to ensue successful management of an organization. Hence, focusing on customer value changing is certainly managerial accounting.

Value chain is important because it affects the ability of an organization to run the day to day affairs of an organization. The better the value chain the better will be the financial performance of an organization. Value chain will help an organization to increase value for its operations to improve the performance of the organization.