Australian Dairy Products in China: A Management Accounting Report

This report provides a briefing on international issues in management accounting related to Australian dairy products in the Chinese market. It addresses the perceived advantages of Australian dairy products in China and how this should be reflected in manufacturing for export. The report also explores the differences between Chinese and Western approaches to management accounting, including the use of joint product costing and budgeting in Chinese firms. Furthermore, it explains the concepts of 'guanxi' and 'power distance' and their potential impact on business relationships and negotiations, particularly in the context of Mercury Inc.'s acquisition of ChinaSouth DairyCo. The analysis suggests that leveraging the popularity and perceived quality of Australian dairy products, coupled with an understanding of Chinese business culture, can lead to a successful market entry and expansion.

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MANAGEMENT ACCOUNTING

Australian Dairy products
1. The Australian dairy products are the most famous dairy products of China that is due
to the rich quality and benefits it provides. If the value of product comes for an infant, then
the product which provides the best safety and has the best benefits is chosen. Therefore, the
rich nutrients and heath safety of the Australian dairy products, it is the best to feed the
infants and also it ranks the highest among all other dairy makers. The Australia dairy market
has a really good distribution system which makes it easier for the customer to reach the
product and thus leading the market in terms of choice and availability. The major difference
which drives the customers to choose Australia Dairy products over the Chinese products is
the quality of the commodity as well as the choice of the consumers. It is clearly seen that the
crowd is much more satisfied with the Australian dairy products thus leading to the drop in
the sales of Chinese dairy products (Australian Dairy Products, 2017). The product is not
only profitable for the company to earn revenue and increase sales, but also the nutrient rich
and healthy product makes it very beneficial to the consumer families. All the above factors
lead to increase the demand of the product thus forcing the company to manufacture more
products which in turn leads to the revenue generation. A strong supply chain was maintained
and thus making it useful for the company to get into import and export of the products.
2. Management accounting practices vary in different regions and countries. Similar is
the case when it comes to management accounting systems of the Chinese and Western
countries. In the case of western countries, all the legal and legislative rules and regulations
are followed according to the Companies Act which states that the amendments and revisions
of the policies of accounting are not having any legal binding power and the formulation of
the principles is done according to the National legal framework (Hwang et. al, 2008). The
commands for a company can be formulated along with the ascertainment of the other rules
on an individual basis as the Banking ordinances are prepared for the listed and financial
institutions. It makes the base line which is used to set other standards and maintain the other
bodies of accounting. China has a different case as it have initiated to use a completely new
method of accounting system. The major firms of the market use the method of joint product
costing and also budgeting. The rate of embracement of the Chinese firms has been observed
to be very high when it comes to the standard costing (Fubier, 2017). When it comes to the
matter of embracement of the accounting systems, then both the normative and the standard
costing methods have not much things to differentiate.
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Australian Dairy products
3. Guanxi will play a key role in attaining an upper hand in the process of conversion and
thereafter, persuade the relationship that altogether facilitates in better dealings in business.
Therefore, the interaction will be assisted by the social network and can thereafter assist in
arriving at a proper process of dealing. Moreover, it must also be taken into account that the
role played by Guanxi plays a key role in establishing a bond betwixt two individuals through
the exchange of favors instead of sentiments (Du et. al,, 2015). Furthermore, on the other
hand, power distance can be explained from the viewpoint of the people of the management.
It refers to the extent to which members who are lesser powerful in the societies accept and
expect that distribution of power is facilitated in an unequal manner. However, after taking
into account, the overall scenario, it can be stated that Deirdre Lynch is carrying a higher
prospect and that coordination or interactions with the China Dairy company’s manager will
be in a good pace, thereby ensuring a proper successful path. Such prospect is advantageous
for the people of China and such viewpoint is already reflected to the manager of China
Dairy. Besides, the dairy products based in Australia can easily take advantage of the market
and gain a higher share of the market taking into account the popularity and choices offered
by the company (Woodbine & Scully, 2014). Nevertheless, because of the fact that the
customers pursue an effective dependence on the dairy items, it will play a key role in
enhancing the effectiveness of the process of export (Chow & Ho, 2008). Therefore, taking
into account the perceptions of the company manager of China Dairy, it can be concluded
that the coordination, as well as interaction holds to be effective in such situation.
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Australian Dairy products
References
Australian Dairy Products. (2017). Promoting dairy through processing, manufacturing &
trading. Retrieved from http://www.adpf.org.au/index.asp
Australian Government. (2017). Exporting dairy products to China. Retrieved from
http://www.agriculture.gov.au/export/controlled-goods/dairy/operating-registered-
establishment/china-requirements
Chow D., and Ho. (2000). Openness of knowledge sharing within organizations China cf
USA. Retrieved from
https://interact2.csu.edu.au/bbcswebdav/pid-2070875-dt-content-rid-3019772_1/xid-
3019772_1
Du et al. (2015). Auditors’ Role in China The Joint Effects of Guanxi. Retrieved from
https://interact2.csu.edu.au/bbcswebdav/pid-2070876-dt-content-rid-3019773_1/xid-
3019773_1
Fubier, BB. (2017). Content and Context- 'fair' values in China. Retrieved from
https://interact2.csu.edu.au/bbcswebdav/pid-2070874-dt-content-rid-3019771_1/xid-
3019771_1
Hwang, D., Staley, Y., and Lan, Y. (2008). Confucian culture and whistle blowing by
professional accountants. Retrieved from
https://interact2.csu.edu.au/bbcswebdav/pid-2070878-dt-content-rid-
3019775_1/xid-3019775_1
Woodbine, F., and Scully, G. (2014). Guanxi - a two-edged sword. Retrieved from
https://interact2.csu.edu.au/bbcswebdav/pid-2070877-dt-content-rid-
3019774_1/xid-3019774_1
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