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Accounting in Organisations & Society Assignment PDF

   

Added on  2021-04-16

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Question 1The five key stakeholders along with the relevant accounts for satisfying the informationalneeds are highlighted below (Deegan, 2014).Shareholders – The decision regarding supplier can impact the profitability of thecompany and hence the net worth. As a result, the existing 20 shareholders of thecompany are stakeholders. The key accounts of importance for the shareholderswould be the net profit to begin with but would include metrics related to injuries toworkforce (including those of suppliers). Customers – Sustainability has become increasingly important for customers whodesire to buy goods from manufacturers having ethical practices. As a result, thesourcing decision could impact the preferences of customers making themstakeholders. The sourcing policy along with the metrics related to environmentsustainability and consumer complaints & refunds are essential. Also, the salesaccount in terms of price charges would be critical.Government/Professional Bodies – Ethical sourcing has become significant ever sincethe abysmal labour practices followed in the sweat shops have come to light. As aresult, there have been agreements in the clothing industry whereby the big brandshave taken measures to focus on ethical sourcing. Key account closely watched wouldrelate to the sustainability report, the sourcing policy, employee related injuries alongwith performance metrics.Suppliers – The sourcing policy adhered by the company has a impact on the presentas well as potential suppliers in the future. The informational needs can be fulfilledfrom the sustainability report besides the balance sheet which would indicate thefinancial strength of the company.Lenders – The sustainability practices adopted by the company could impact thelenders owing to potential financial impact of any lapse. In case of sourcing fromBangladesh, there is considerable risk to the business which could increase credit risk.Key accounts would be the sourcing policy, sales, profits along with liquidityindicators (both short term and long term).Question 2

Balanced scorecard is a tool to ensure that the performance metric of the business are broadbased and hence not too much biased towards economic performance. Considering that thebalanced scorecard enables the business to focus on other critical aspects such as learning andcustomer satisfaction, hence this leads to higher sustainability for the business. There areessentially four perspectives namely financial, customer, internal business processes alongwith learning and growth. The most critical metric for each of these performance dimensionshas been outlined below (Adams, Neely and Kennerley, 2007).Financial – The two key important metrics would be sales growth along with profitmargin. However, the more significant of the two metrics would be profit marginsespecially considering that the company would go with expensive but green supplier.As a result, the margins in short term could be under pressure and as a result series ofcost cutting measures may be initiated by the company whose effectiveness would becaptured by this metric.Customer – The number of customers complaints received as a percentage oftransactions should be the appropriate metric. This becomes significant in the wake ofincreasing complaints from the customer that the business faces in wake of expansion.Keeping customer complaints under check would enhance the customer satisfaction. Internal business processes – The product quality is a critical metric in this regard.The company should aim to bring the damaged or defective goods to less than 0.5%of the total goods manufactured. This would lower the costs related to repair,replacement and quality check and would enhance the overall customer satisfactionalong with profitability.Learning and growth – The company should aim to improve the online shoppingexperience as it an area of weakness and has tremendous scope for growth. Also, thiswould help the business lower down costs and improve operational profitability. Asuitable metric could be clicks generated along with conversion rate of clicks. Question 3In order to choose between the two suppliers, a cost benefit analysis needs to be performed asindicated below.Supplier 1: Super Cheap

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