Question

1. Identify an organisation you are familiar with that has exploited technological change to its advantage and another organisation that has not coped well with change.

Required: Critically discuss what made the first organisation successful and elaborate on the consequences for not coping with change for the second one. (150 words)
2-Think of an example of a value chain activity that is sensitive to scale economies and one which is not. Critically discuss the reason for this difference. (130 words)
3-4. Explain how an organisation’s management accounting system (MAS) can contribute towards the development of a cost leadership strategy. (190 words)
4- Critically discuss why strategy beqcame increasingly important and elaborate on the current challenges. (170 words)
5-Critically discuss the costs and benefits of TQM. (100 words)

Answer 1

1. Most of the organizations have tried to cop up with the rising technological trends of the world. The electronic manufacturing organizations are the most suitable example among these. They have not only been able to take advantage of the advancements in electronic industry, but also have taken advantage of the technological changes that have arose among the marketing and sales sector and have reaped benefits out of it. The reason behind their success lies in the fact that they were able to adapt themselves when these advancements were happening in the society and made all the efforts to go with the flow due to rising competition that existed. Although this is the case with many organizations, it can be seen that traditional manufacturing organizations like coir manufacturing units of India have not been able to cop up with rising technological trends across he globe. The failure to access have resulted in various losses like market loss, profit loss etc. These sectors are being organized in rural areas which makes hen inaccessible to technological revolutions happening in the society and still keeps them outbound.

2.                                        Value chain activities involves five primary activities like inbound logistics, operations, outbound logistics, marketing and sales and service. The support activities include procurement, human resources, technology development and firm infrastructure. Here, the following example can be suggested

· Consider a marketing strategy that is innovative and is modelled based on the current economy on a frequent basis. Here, we can say that such an activity is always sensitive to economies of scale as the cost benefits could be obtained due to reshaping of marketing strategy in accordance with the persisting economic conditions.

· Consider the support activity of servicing in a value chain process. Here, the cost of servicing cannot be avoided at any instances of economic condition and hence it does not depend on the variations in the economy and hence is non-sensitive to economies of scale.

3.                              Management Accounting Systems [MAS] provides critical information to management to be used in operational business decision making. A manufacturing unit uses this system to help in costing and managing their processes. It acts as a bridge between the financial functions and other parts of the business. A MAS helps to gain information about the cost, productivity or efficiency advantage of the company with respect to its competitors. Moreover, in a market value chain analysis plays an important role and proper management in value chain is of great concern so as to reduce the unwanted losses in movement of procts from one chain to the other. Here also management accounting ca be crucial for the success of a firm. Thus, they help in formulating a strategy that gives competitive advantage to the firm. The advantage that is gained through this would help the company to formulate optimal costs by proper analysis of its processes via logistics management and linear analysis. Once optimal costs are formulated, the profits of the firm would rise. Thus, a MAS is largely beneficial in attaining a cost leadership strategy to a firm.   

4.                                The more competitive the market becomes, the more competent the firms should be so that they gain profits out of the market. This is where proper formulation and implementation of strategies plays an important role. A marketing strategy involves many components like cost reduction, advertisement, supply chain modelling, inventory management etc. The implementation of proper strategies in each of these sectors would help the organization to gain profits from the market. For example, say am organization has focus on management of its supply chain. Thus, it takes care to properly manage its stock or inventories so that the products are available always to keep the chain running so as to attain customer satisfaction which forms the key for the success of an organization. In the case of advertisements, the role of media has been playing a major role in influencing the people to chose between various competitors of the market. Thus, proper strategy making and implementation is always a necessity of todays’ market.

5.                                TQM refers to Total Quality Management. It is a continuous process of detecting and eliminating errors in manufacturing, supply chain management, improvement of customer satisfaction, training employees etc. TQM takes a considerable amount of input costs of an organization in its marketing strategy. The following benefits are the results of such management

· Customer satisfaction

· Cost reduction

· Productivity improvement

· Reduction of defects in various processes