Accounting for Management Decisions: Canon Inc. and Apple Computer

This report critically evaluates the role of management accounting systems and the provision of accounting information in the innovation processes of Canon Inc. and Apple Computer Inc. The analysis identifies and discusses the components of management accounting systems within each company, highlighting their relevance in decision-making processes. The report explains how management accounting contributes to the innovation process, providing specific examples from both companies, such as Canon's use of mid-career managers and Apple's focus on technological trends. Furthermore, the report provides four specific outcomes or lessons learned from the research findings, including the importance of information flow, the role of leadership, and the impact of small management groups on innovation. The study emphasizes the importance of syntactic and semantic information channels, the role of leaders as catalysts, and the value of intense interactions among team members for effective information transmission and innovation.

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Accounting For Management Decisions
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Introduction
For the purpose of this paper, we shall make a critical analysis of the role played by
management accounting system and the provision of accounting information in the innovation
processes of Canon Inc. and Apple Computer Inc. In the first case, management accounting
system refers to a system that is adopted by a company to manage expenses, income, and
different business financial activities. Management accounting systems are made up of an
organization’s internal systems that are used to evaluate and measure its management processes
(Kim 2014).Normally, businesses use accounting systems to monitor their financial transactions
such as expenses (purchases), income and invoices (sales), accounts payable and funding
(liabilities) and many others. Further accounting systems provide an opportunity for businesses
to generate various organization statistics that provide interested parties or management with a
wide variety of information to assist in processes of decision making in an organization.
Currently, both Canon Inc. and Apple Computer Inc. have incorporated management accounting
systems to monitor their financial transactions. The companies use computer-based or automated
systems that use cloud-based or specialized services (Cooper, et al 2009).
Components of the management accounting system for each of the two companies
The components of Apple computer Inc. management accounting system include; reports
of income expenses and income, and sales analysis. These components are based on Activity
costing that is determined by the organization production activities. In addition, the components
provide an organization with the required information useful for making decisions and planning.
In addition, the company uses the components of a management accounting system to delete or
add information from its product portfolio. Further, the company incorporates the components of
the system to make a decision of the best production process or line that can be used for various

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products. The managers of Apple computer Inc. use these components to make an analysis of the
major manufacturing processes in the organization. The components of the management
accounting system for Canon Inc. include budgets, reports about investments, and reports of
standard costs. CanonInc. Uses these components to perform organization decision such as
financial management, organization spending, total cost evaluation and many others (Wu, &
Boateng 2010). The company incorporates these components to estimate their total costs of
production. The management of Canon Inc. calculators its cost values by measuring the rate of
an activity and its drivers. The components help an organization to overcome overhead expenses
in business operations which may limit their labor input. Also, the organization incorporates the
components with the intention of diversifying its products tastes. In addition, these components
of management accounting systems help Canon Inc. to obtain factual information or data that is
in line with the organization’s budgeted and actual figures thereby allowing the managers and
owners of the organization to incorporate the appropriate measures of controlling risks. In
addition, these components help an organization to attain timely feedback that is in line with the
current activities of the organization thereby helping it re-evaluate its operational decisions.
Therefore, these components of management accounting systems help the two organizations to
make its financial decisions to monitor its business operations during the production processes
(Kariyawasam 2009).
How management accounting contributes to this innovation process
In order for Canon Inc. and Apple Computer Inc. to ensure effective creation of
information and better organization, they were supposed to transmit new information by
implementing management accounting systems. These management accounting systems
contribute to this innovation process in a number of ways depending on the organization. First,

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owners of Canon Inc. were prompted to hire mid-career managers who can be in the position to
ensure effective creation of information by creating diversity or counter-cultures within an
organization. By doing so, the company has been in the position to attain internal development of
"plain paper copier" technology. This has been as a result of making a "policy of hiring mid-
career personnel from other firms" who recommends a firm to make diversifications in various
field such as "Plain paper copier". Second, management accounting helped Canon Inc. proposer
again with increased average growth of about 20 percent from 1975 - 1985. With the help of
management accounting, Canon became well equipped to overcome various challenges in the
projects of product development as a result of using diverse and large staff comprising of over
three engineers, where 30 percent were mechanical engineers, other 30n percent electrical
engineers, 17 percent physicists, 10 percent chemists and computer-related staff was 13 percent.
Therefore, by using management accounting, the organization was in the position to ensure
effective interaction and accumulation of this personnel with different technology potentials. In
addition, management account provided Canon Inc. an environment that addressed tension in the
business operation hence resulting into creation and synthesis of new information (Vaivio, &
Kokko 2009).
By using management accounting Apple computing Inc. was in the position to realize
that many business ideas which were very important were ignored as a result of limited
information transmission. With the help of management accounting, the company was in the
position to understand vital business jobs that were not considered earlier. for example, "in the
decision regarding the use of the 5.25 inch or 3.5-inch floppy disk, Jobs wanted the slower,
lower-capacity 5.25-inch floppy disk, even though the engineers insisted that the 3.5 inches
would be better" (Nicholson 2009). Also, management accounting helped the managers of Apple

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computing Inc. to obtain information about their technological trend. By training information ion
an organization, the company was in the position to prepare its self for battle with its competitors
in the market. This helped the organization to build a new computer as an organizations
innovation, for example, Apple Lisa and Xerox star. In addition, by adopting management
acco8unting system, the company was in the position to make use of different features which
supported their computer machines which were faster, expensive and smaller. Therefore,
management accounting helped Apple computing Inc. to realize its competitors and mistakes
thereby designing new innovation processes such as designing new computer features (Clinton,
et al 2011).
Specific outcomes or lessons learned from the article’s research findings
According to the article, management accounting systems are important tools in the
creation of new information in an organization that arises from social interaction. In addition, the
article indicates that the firms are responsible for creating a process which provides their
structure. The article also indicated the interactive nature of the two firms in project development
composed of different people from various backgrounds operating in intense continuous
communication. The article indicated that the two companies developed two different products
(D'Orazio, & Dante 2014). In this case, the four major lessons or outcomes from the research
findings of management accounting are explained below in accordance with every organization.
First, the research on Canon Inc. indicated that an organization’s management is based on
syntactic data or information like profit analysis and ROI which create meaning or emergency in
the information. In addition, this system is supposed to create an organization’s meaning made
up of stagnant bureaucracy. Further, the research indicates that different channels that are created
for syntactic information communication are not recommended for transmitting semantic

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information. Therefore, research indicates that "In a syntactic channel, semantic information is
interpreted as merely “fluff” without pragmatic use." This implies that Australian companies
should have a well-visualized structure that helps in the flow or transmission of an organization’s
information without meeting barriers. By doing so, companies will be confined as being Number
One (or Two) in every business we are in” or “keeping ROI above some arbitrary number"
(Pagliery 2016).
Second, the research on Canon Inc. indicated that synthetic rules should not be miss
taken by employees in an organization so as to achieve the business objectives and motivation of
leaders. In case, Australian companies don’t put this issue into consideration, they will not be in
the position to fix or minimize the risks that may arise in an organization’s rank and file. In
addition, the situation may lower down an organization’s breakeven point hence limiting the
creation of information which may affect the growth of a company. Therefore, Australian
companies should consider these two findings obtained from the research concerning Canon Inc.
(Isaacson 2013).
Forth, Apple computing Inc. indicated that an organization’s leader helps in maximizing
the creation of information for an organization. In addition, the research indicated that the leader
of an organization not supposed to behave like a military commander but instead be a catalyst for
better business performance. In addition, a leader in an organization is supposed to create a way
of selecting useful people in an organization by at times making arguments with them and also
assisting them to overcome different barriers thereby helping them attain their vision. Therefore,
leaders in Australian companies should be in the position to effectively perform their roles in the
organization so as to ensure effective information transmission (Van, and Anton 2011).

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Last, the research indicates that a small group of managers in an organization can create
up a difference in the innovation processes. For example, Apple computing Inc., incorporated a
small number of people to integrate the company’s software and hardware systems so as to
ensure effective operations. With the help of intense interaction, the company was in the position
to ensure effective information transmission. Therefore, Australian companies are supposed to
ensure intense interaction between its members as a way of exhibiting their commitment (King
2015).

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