Management accounting-Bias Budgets Coursework Example | Topics and Well Written Essays - 2000 words

Management accounting-Bias Budgets - Coursework Example Question One (a): Why do managers want to manipulate their budgets? After budget approval, the company may use it to carry out budgetary actions. As a result, the managers use it to ensure they carry out the organization objectives and plans and in the end, they have to compare budget plan against the real performance. Once compared, the difference in amount is usually the budget deficient or bias which is cause by manager`s manipulation or distortion on the proposed budget. There are various reasons as to why mangers manipulate budget. Firstly, if the rewards and motivation through performance evaluation help to achieve the budget results, the managers may end up manipulating the budget to include more of rewards in order they can hit the target more easily like league table and bonuses. Besides, managers are highly involved in cases of budget slacks-where organization set their revenue to be too low and a high cost, the organization may end up losing sales since the resources requi red to raise production with the short time given have been limited. Moreover, the managers who have been promised some rewards on attaining certain goals set their target to be very low such that they easily attain them without caring whether the company looses or gains. Likewise, the senior managers dictate on a budget for performance. As a result, it forces the mangers to keep focus of resources on the performance of their department. Consequently, the mangers end up presenting a budget request biased on his department not for organization as whole. Hence, the direction of bias is downwards. Secondly, the company`s practices and norms is subtle in determining the performance of the company`s budget. Notably, prevailing work conditions help to dictate what is morally right. As a result, the management, which focuses on self-manager performances, will give incentives directed to managers alone. However, the aggregate accounting performance from his action is focusing on organizatio n as whole. On the other hand, the management focusing on others gives a hard determination of degree of performance. As a result, it reduces the aggregate performance although it induces co-operation and collaboration to other firms. Moreover, when there occurs some change in the budgetary system from being top-down or centralized, and an acceptable estimate of growth is set, with the changing budgetary system to may be bottom up, and company`s practices remaining similar, bias of unknown direction happens. Lastly, the mangers may feel insecure in their job and as a result, they are more than ready to use the budgetary trick when a chance arises. By this, it mean, the managers are quick to spend until the entire budgeted amount is consumed when the chance of buying goods occurs at a lower price. In fact, in the managers operating in the declining sales department makes use of entire budgets usage under the assumption that the future is uncertain. As a result, the budget becomes was teful at the expense of the manager approving his need of upholding the job since the amount needed by the company and the bought one is very varying. Hence, strong upward bias occurs. (b): Why are they able to do? What are the constraints on such behaviour? As a long as the departmental budget exists, some head of the department will always try to game the budget. Additionally, there are numerous reason as

Nucor Competitive Strategy Case Study Example | Topics and Well Written Essays - 2750 words

Nucor Competitive Strategy - Case Study Example The problems Nucor faces are manifold. First, Nucor should worry about how to compete in the domestic and global markets in the steel industry. Additionally, Nucor also has a basically weak managerial hierarchy and human resources system, and it is flawed for multiple reasons-which will be discussed further at length in the "Worry List" section. Although Nucor has a four-fold strategy that is designed to implement growth, this strategy, too, is riddled with dilemmas all unique unto itself (new acquisitions, new plant construction, continued plant upgrades and cost reduction efforts, and joint ventures). Nucor must address policy issues within its operations and whether they are expedient to uphold, or whether new policies should be instituted to foster a more conscientious and people-driven company than it already is. The workforce compensation practices seem to be excessive, which will be explained in-depth in the "Worry List." Finally, common-sense issues, like pricing and markeing , and the actual production logistics of how steel is made, are obviously factors that must be seriously evaluated if Nucor is expected to remain not only a vital competitor but a leader in the steel industry in the U.S. and abroad. In order to continue... issues, like pricing and markeing, and the actual production logistics of how steel is made, are obviously factors that must be seriously evaluated if Nucor is expected to remain not only a vital competitor but a leader in the steel industry in the U.S. and abroad. In order to continue being a superior organization, Nucor must as a company reevaluate its primary focus and then set its goals according to the following suggested solutions. First, regarding competition, Nucor must seriously decide where it wants to be in relation to other steel companies and take action to corner the global market on the need for exported steel, an look into supporting measures that would strengthen Nucor having an edge on the industry-a competitive advantage if you will-by making sure that U.S. and international law encourages and protects free trade, which stands to benefit Nucor Corporation. In order to be domestically competitive, Nucor should consider adjusting some of its underlying policies related to management, human resources, and compensation in order to stay abreast of the changing times. One problematic aspect about Nucor which must be altered is its seemingly laissez-faire approach to management which affects the two other aspects of the company (hu man resources and compensation). Additionally, the delicate dance of new acquisitions by the company has prospects, but there are also other entities to consider. Is the company culture and hierarchy being set forth in new acquistions manageable, and reasonable If not, this must be tweaked also. Further, the liabilities involved in new acquistitions as well as the construction of new plants and their impending operations and workforce must be evaluated. Although this company compensates its employees well for the no