ACCT3001 Portfolio: Accounting, Behaviour and Control

This portfolio, submitted for ACCT3001 at Curtin University, addresses key concepts in accounting, behaviour, and control. The assignment analyzes the strategic positioning of companies, differentiating between cost reduction and customer satisfaction approaches. It delves into the evaluation of ...Read More

Running head: ACCOUNTING, BEHAVIOURAL AND CONTROL
Accounting, behavioural and control
Name of the student
Name of the university
Author’s name

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Table of Contents
Question 1........................................................................................................................................2
Question 2........................................................................................................................................5
Question 3........................................................................................................................................7
References........................................................................................................................................9

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Question 1
Answer 1-1
The strategic position of the poppy company is the cost reduction approach. Their
internal management is concerned more on cost reduction to improve profit margin.
The strategic position of the Iris is customer satisfaction oriented. Rather than reducing
the cost of operation, they focus on improving customer satisfaction through fast delivery and
better services. The Iris has gained goodwill through its customer-centric approach. Since the
company’s focus on improving customer service, customers will prefer Iris product over Poppy’s
product. The customer-oriented approach is helping Iris to gain a competitive advantage over
Poppy (Asiedu and Elvis 2015).
The strategic position of the company is determined by some of the factors that how it
uses its efficiency in increasing the value of the products. The value can be an increase in two
ways, either decreasing the cost of the product or increasing customer satisfaction by
differentiating the product from its competitors (Hammami et al. 2015). The position of the
Poppy shows that it is only focusing on the reduction of price, but still, it is unsuccessful in
making the availability of the product at a premium price, which is lower than its competitors.
However, Iris's strategic position shows that it is successful in creating value to its product as it
is providing fast delivery with other better services at a similar market price like Poppy (Al-
Zu’bi and Hasan Ali 2014).
Answer 1-2
Adam is talking about some values that the customer gets after buying the product apart
from the reduced prices. The Iris is capable of providing better services than Poppy at equal

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prices. This is because the internal management is continuously focusing on improving the
quality of the product. Strategic planning is on a long term basis (Elbanna, Rhys, and Raili
2016). The source of the value is better service at an equal price like its competitors. The efforts
of the internal cost and maintenance department are the source of value that Adam is talking
about. The cost and maintenance department is very efficient as they are successful in providing
quality service and making it available to its customers at the same price. The high strategic
planning is needed to achieve the molding of two benefits in one product that is quality service at
the same price available in the market (Dibrell et al. 2014).
The efficient physical distribution system is another source of this value. The faster
delivery of the product is one of the features;the customer takes into consideration before buying
the product (Luo et al. 2018).
When customer experience quality service, they always prefer to purchase goods from
the same store means better services helps to create customer loyalty. In addition, the company
can also generate a new customer base. The reputation and goodwill become the source of this
value addition in the customer base (Chen, Zelin, and Zhiyuan 2019).
Answer 1-3
The Poppy company has first analyzed how the customer is deviating to other
competitors' products. The analysis can show that, Iris is giving faster delivery to its customers
and the customers are more satisfied with the quality and after-sale service of Iris (Reyes et al.
2017).
The company addresses the situation wisely, as losing existing customers can be a threat
to company sustainability. Earlier, the time taken by the production process of the company was

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higher. The company has considered it and improved the internal process. The internal process
management can consist of many activities such as reduction of idle hours of the labours,
appointing more skilled labors, adoption of newer advance technology, adoption of efficient and
effective courier services, improving the customer feedback portal so that important feedbacks
can be received for improving the services. Most probably, Poppy has improved all these factors
to make the delivery of products faster than earlier. The better management helped the company
to reduce the defective products, and thus the operation and maintenance cost of the sewing
machine reduced by the company, and the cost saved here can be allocated to the supply chain
management system to improve the delivery option.
The provision of better and fast delivery option makes the company in a similar position
like Iris. However, the improvement in the internal process helped in reducing the cost of
production, thus helps in reducing the prices of the products (Fisher et al. 2019). The aggressive
lower pricing helps Poppy to gain a competitive advantage over the other competitors.
The management accounting information system helps the company to evaluate the
financial performance using the financial information of the company, whether it is available
internally or externally. The management includes evaluating the customer relationship, supply
chain management system, inventory control management, and other important areas significant
to business performance. Here, the management of accounting information is very efficient as it
not only evaluated the internal demerits of the company but also studied the external factors like
why it is losing its customers. With the help of effective MIS, the company becomes able to
introduce the newer plan of operation in the internal process, and this helps Poppy to gain a
competitive advantage in the market (Mirzaey et al. 2019).

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Question 2
Answer 2-1
The manager of the maintenance department can be evaluated on the basis of his
technical knowledge. The technical knowledge of the manager should be the combination of his
experiences and his skills to learn newer technology available in the market. In accounting terms,
the manager should be able to create a difference between the budgeted or planned cost and the
actual cost. The aim of the manager should always be minimizing the cost and keeps the cost
lower than the budgeted cost. Thus the manager of the maintenance department should be
evaluated on the basis of variance analysis (Arzbächer et al. 2017).
Answer 2-2
Part 2- 2A
Cost center and profit centers are present in a decentralized organization. The cost center
tries to focus on reducing the prices of the product as Poppy’s maintenance department was
doing earlier. This is done by not charging prices for the service from the other interrelated
departments. The other department may sometimes take the services for granted and create an
unnecessary burden on the cost centers. A similar issue can be seen in the case of MUP. Thus
making the maintenance department into a profit center can be significant in reducing the
defective items produced by theMUP (Verboncu, Ion, and Ion 2017).
Answer 2-2B
The impacts of converting the maintenance department from a cost center to a profit center
can be in two ways:

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 The practice of converting the maintenance department to a profit center can reduce the
number of a user service request as the other core departments which are contributing to
the profit will try to produce the products more efficiently so that the number of defective
products produced will be less in numbers. This helps them reduce the number of service
requests and can avoid increment in cost by taking help from the maintenance center,
which is now a profit center.Moreover, it is charging money per service, which will
directly increase the cost of production if service requests are not minimized.
 It can also happen that the other department will keep on producing with the same style
of production, and the number of defective items did not reduce. This will
unconditionally increase the cost of production. This is because the bill charged by the
maintenance department (profit center) will now be considered as an overhead cost and
will be added to the original cost of production (Grydzhuk and Shvets 2019).
 The increment in the cost of production can adversely affect the sales of the business as
the customers will not buy a product at a higher price, which is already available at a
lower cost in the market. The consumer purchases the products rationally after evaluating
each aspect of the product (Sayed et al. 2016).
Part B
The manager of the maintenance department can be evaluated using different
performance matrix. The evaluation should be based on their skills in reducing the cost of
production and their sills in reducing the time in which they are providing complete service. This
practice will determine the delivery time of the product to the concerned customers. The
objective of the manager should be made quantifiable so that their performance can be assessed
and evaluated. The objective of the maintenance department can be diversified on the basis of

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their contribution to different departments, such as production and service departments. The
managers can be evaluated on the customer satisfaction level. This level will determine whether
the company is providing the safer products are not (Henkel et al. 2019).
Question 3
Answer 3-A
The budgetary slack impacts the different departments and employees of the company
differently. When the top managers do not know the complete information about the target and
the departmental or unit managers have the sole right to set the budgets for themselves. The unit
managers generally have more information than the top-level managers concerning the inventory
requirement, employee performance, expenditure requirement, etc. thus, they try to set the
budget goal lower than it is needed.
The other disadvantage of budgetary slack is this practice of setting the target at a lower
limit involves the self-interest of the managers.They will easily avail of these lower targets and
can enjoy the incentives provided by the company for performance appraisal.
The other disadvantage is the dynamic marketing environment. Whenever a company is
entering into a newer product line, the managers do not know about the future scenario in which
the product will be marketed. The managers follow the conservatism approach in setting the
target of budgets. This sometimes overestimates the budget since managers are considering all
the uncertainties of the futures market, which may or may not arise. The managers underestimate
the level of future profit, which is easily attainable if those uncertainties arise.
Answer 3-B

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The disadvantages of the budgetary slack from the point of view of corporate
management are:
 The efficiency and effectiveness of corporate management decrease in determining the flaws
and inefficiencies of the different units and departments. The corporate managers fail to take
corrective actions to remove this inefficiency as the problem areas are not ascertained timely.
The managers have to consider every aspect of the expenses and income which should be
included in the budget.
 The other disadvantage is that the company fails to plan the organization's goal and related
activities effectively to achieve it. The proper planning may help the company in improving
its revenue with the help of effective pricing and promotional budget. The budgetary slack
can divert the company from these attainable revenues with the help of better
foresightedness.
 The corporate managers fail to determine the true and appropriate departmental budget if
budgetary slack persists in each of the interconnected departments. The top-level managers
fail to evaluate the performance of different departments if the departmental managers are
already using the budgetary slack for fulfilling their self-interest.Thus the presence of
budgetary slack in an organization can decrease the level of productivity. The budgetary
slack should be minimized and a proper evaluation system should be formulated which can
the disadvantages of budgetary slack and can mould it towards achieving the organizational
objective (Hormati et al. 2017).

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References
Al-Zu’bi, Hasan Ali. "The relationship between strategic orientation and competitive
advantages." American Academic & Scholarly Research Journal 6, no. 3 (2014): 13-20.
Arzbächer, Sandra, Ursula Holtgrewe, and Christian Kerst. "Call centres: Constructing
flexibility." In Re-Organising Service Work: Call Centres in Germany and Britain, pp. 19-41.
Routledge, 2017.
Asiedu, Elvis. 2015 "A critical Assessment of the Strategic Position of Melcom within the Retail
Industry in Ghana." Journal of Entrepreneurship & Organization Management 4, no. 137
(2015): 119-142.
Chen, Zelin, and Zhiyuan Jiang. "Empirical Research on Internet Enterprise Value Evaluation
Based on Free Cash Flow." In 2019 International Conference on Management, Education
Technology and Economics (ICMETE 2019). Atlantis Press, 2019.
Dibrell, Clay, Justin B. Craig, and Donald O. Neubaum. "Linking the formal strategic planning
process, planning flexibility, and innovativeness to firm performance." Journal of Business
Research 67, no. 9 (2014): 2000-2007.
Elbanna, Said, Rhys Andrews, and Raili Pollanen. "Strategic planning and implementation
success in public service organizations: Evidence from Canada." Public Management Review 18,
no. 7 (2016): 1017-1042.
Fisher, Marshall L., Santiago Gallino, and Joseph Jiaqi Xu. "The value of rapid delivery in
omnichannel retailing." Journal of Marketing Research 56, no. 5 (2019): 732-748.

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Grydzhuk, D. M., and N. R. Shvets. "increasing efficiency of banking activity in ukraine by
governing pricing centers of profit of the bank." Financial and credit activity: problems of theory
and practice 3, no. 30 (2019): 4-15.
Hammami, Samir, Hazem Mohammed AlSamman, and M. N. Alraja. "The role of CRM system
in consolidating the strategic position of the organization." International Journal of Applied
Business and Economic Research 13, no. 4 (2015): 1629-1640.
Henkel, Tom, Jim Marion, and Debra Bourdeau. "Project Manager Motivation: Job Motivators
And Maintenance Factors." Journal of Diversity Management (JDM) 14, no. 1 (2019): 1-8.
Hormati, Asrudin, Rudy Laduna, S. Mahdi, and S. Kahar. "The Effect of Budgetary Participation
on Budgetary Slack Using Budgetary Ethical Compliance as the Mediating and Moderating
Variable." International Journal of Civil Engineering and Technology 8 (2017): 1081-1092.
Luo, Diansheng, Yongwei Xia, Yuanyuan Zeng, Canbing Li, Bin Zhou, Hao Yu, and Qiuwei
Wu. "Evaluation method of distribution network resilience focusing on critical loads." Ieee
Access 6 (2018): 61633-61639.
Mirzaey, Mehdi, Mohammad Behdad Jamshidi, and Yousef Hojatpour. "Applications of
artificial neural networks in information system of management accounting." International
Journal of Mechatronics, Electrical and Computer Technology 7 (2017): 3523-3530.
Reyes, Damián, Martin Savelsbergh, and Alejandro Toriello. "Vehicle routing with roaming
delivery locations." Transportation Research Part C: Emerging Technologies 80 (2017): 71-91.

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Sayed, Naqi, Naureen Mushfique, and Camillo Lento. "Successful Conversion of a Cost Center
to a Profit Center: A Case Study of a United Arab Emirates Company's Experience." Middle East
Journal of Business 55, no. 3034 (2016): 1-11.
Verboncu, Ion, and Ion Cochină. "Reflections on Some Complex Management Methods:
Management by Objectives and Management Based on Profit Centres." Revista de Management
Comparat International 18, no. 5 (2017): 491-502.