Legal and ethical management

The future of any organization depends on its employees. It has been observed that organizations with intelligent, efficient and devoting employees progress more than those which compromise with workforce efficiency. These days several tests like cognitive abilities, motor and physical abilities, personality & interests, and achievement tests have come up. By conducting these tests on applicants his/or her abilities can be properly judged and hence a proper selection of employees can be made. (King, 2006, 45)Cognitive abilities testIn cognitive abilities test the aptitude of an applicant to work intelligently and efficiently in unfavorable situations or under pressure or in distracting and competing situations is tested.   The speed with which an applicant focuses his attention on any issue, understands it, encodes and categorizes it is observed. His ability to analyze and implement comprehensive instructions accurately, his versatility to respond properly to two or more different issues of concern at a time, his ability to recognize the importance and urgency of some issues and making specific response to those issues, his ability to maintain speed with perfection is tested.The potential of a person in maintaining steady and precise responses during unremitting and recurring activities is observed. The ability of a person to formulate programs and recall and put them into action efficiently and accurately is observed. In cognitive abilities test individual's capability of identifying and analyzing perceptual information, discriminating the information and processing the information to derive solutions for the problems is also tested. (King, 2006, 97)Personality & interests testsPersonality and interests test measure applicant’s interests, choices, emotional makeup, personal characteristics and stability.   This test can help in assessing the applicant’s talents and skills and hence jobs can be allotted based on their interests. Personality te st is a kind of psychological test and is conducted to determine applicant’s personality, interests, values and skills. By this test managements can have a better idea of what kind of person the applicant is and what are his capabilities.Achievement testsAchievement tests are the test of the applicant’s performance. Unlike the Cognitive abilities test this test is a kind of practical test. In this test the applicant is made to face the real working conditions of the organization, so that the actual performance of the candidate can be properly judged. These tests are very beneficial for both the candidate and the management. The candidate becomes acquainted of the original working condition of the organization and the management of the organization can get an idea of the capability of the applicant. (Lamb, 2004, 228)Motor and physical abilities testIn motor and physical abilities test applicant’s physical fitness and strength is tested. There is a popular saying that a healthy body can only have a healthy mind. An employee, who is physically fit, can work with all his heart and sole.   In every company there are certain types of jobs for which physically fit and strong employees are needed. Thus physical abilities test is must. Motor ability test is an individual's ability to perform motor skills is tested. The applicant should have fine motor control. The applicant must have the aptitude to control motor movements accurately. So that making incorrect responses can be avoided and more motor speed can be obtained.Advantages and disadvantages of the above testing systemsThere are several advantages and disadvantages of the above testing systems. Cognitive abilities, Achievement tests and Physical abilities testing systems are the most legitimate testing systems. Cognitive abilities tests are highly reliable. The method of numerical tests, aptitude tests and verbal reasoning has high validity, which increases with complexity of job. This tes t can be conducted with several candidates at a time. Thus have higher validities. Results can be generated through computerized equipments. Thus this test saves both time and money and is advantageous than personality tests.Physical abilities test help in identifying candidates who are physically unfit for any specific job. This tests decrease company’s costs on insurances, medical and disability claims and workers compensations. It also decreases non-attendance among workers due to medical reasons. Achievement tests are very beneficial for both the candidate and the management. The candidate becomes acquainted of the original working condition of the organization and the management of the organization can get an idea of the capability of the applicant.Personality & interest tests have more negative ethical and legal consequences than the Cognitive abilities, Achievement tests and Physical abilities testing system.   There are no proper answers to personality tests.   Th us scoring of the test can be questioned. Assessment of applicant’s personal behavior is practically not possible. The applicant may hide his original nature during selection. Evidences supporting personal behavior of the candidate may not be available. Any applicant might have interest in any job, but this does not prove he is good in it. Personality of an applicant has lesser impact on his job performance than his education and experience. Again this method of testing is very costly. (King, 2006, 117-9)Contribution of modern technology in staff selection processAdvancements in technology have helped to make the applicant testing and selection process more efficient. The previous hand scoring method of testing where marks were calculated by adding number of correct answers given by the candidate is an erroneous process. Now days with use of computers computer-based scoring and optical scanning systems have come up. Tests are scored with the help of a computer and software de signed test scoring. On-site systems produce test scores and as well provide interpretive reports. Mail-in and fax scoring system completed answer sheets are scanned and faxed or mailed to test publisher. He checks the papers, calculates the scores and sends reports to the employer. (King, 2006, 15)It is very important to make a proper choice while appointing employees in the organization. Assessment of applicant’s interests, personality, and skills aptitude and physical fitness help in determining which kind of job will be appropriate for the candidate.References:King, H; (2006); Management Today: Ethical and Legal Concepts; HBT & Brooks Ltd.Lamb, Davis; (2004); Cult to Culture: The Development of Civilization on the Strategic Strata; National Book Trust.

Operations Management and the Demise of Best Buy Essay

BEST BUY This project will discuss the inventory methods, customer service, and overall operations of Best Buy and how through better operations management the company can be operated. We will use examples from the text book, class discussion and group discussion. We will also consult with trade journals and internet articles. Overview: Best buy was founded in 1996 in Richfield, Minnesota by Richard Schulze as an electronic specialty store. The company has gained 19% of the consumer electronics sales market. Best buy operates over 1150 stores worldwide and has several different brands and subsidiaries including Geek Squad, Magnolia audio video and Best express. Best buy has generated over 40 billion dollars in revenues in North America, 3 billion in Europe and 1.5 billion in China. Best buy experienced great revenues when its rival Circuit city went out of business and did very well up until the economic downturn of 2008 and 2009. Problems and current situation: The company continues have to have fierce competition from Verizon, ATT, Apple Wal-Mart and most importantly â€Å"Amazon†. The completion for customers is only getting fiercer with the online retailers like Amazon continues to take more and more market share away room Best Buy. Downfall of Best Buy: Why is best buy going out of business now? In one sense Best Buy is its own worst enemy; there has been number of issues with best buy. Some of the stated issues are: 1. Poor product knowledge and lack of product availability: For example at the beginning of the semester I wanted to buy a new laptop. I went to the Best Buy closest to the school and I knew what I wanted and how much I was willing to pay. I had research the Best Buy website and found it  online but did not have time or patience to wait. So I went to the store and they did not have the laptop I wanted. I found a similar laptop that performed just as well but it’s not what I wanted. 2. Higher prices: Best Buy cannot compete on price any longer and the customers know this full and well. For example if you found the attest technology gadget in best buy for 100 dollars and online for 75 dollars, where would you buy all thing being equal. Of the answer is you would buy it online. Especially if it’s a product you are familiar with. This only makes Best Buys show rooming problem even worse. 3. Poor Customer satisfaction: Satisfying a customer is a major key to make business, but best buy seems loosing this key. Some recent surveys show that Best Buy has been doing its best to leave the troops unhappy. Major factors for this are the higher prices, poor customer service, and lack to inventory management. In this era of Cut-Throat Competition, Best buy is losing its grip in the electronic market. Corporation like Amazon, eBay are spreading its business very fast leaving no scope of mistake for its competitors. Best buy has lacks product for display in there show rooms, says my personal experience. Entering the stores and unable to spot the latest products of high end American brands like apple, doesn’t impress anyone. Specially, when you have the access to all kind of electronic product on websites like Amazon that too with all kind of technical details. Best Buy need to develop its inventory management so as to display and deliver products to their customers on time. Focusing the blunders where company made apologies to thousands of customers for not delivering products for Christmas which were orders on thanks giving, Best buy’s reputation is in jeopardy Another trouble which Best Buy is facing is – it is unable to provide a free home delivery unlike Amazon and EBay. Also these online websites provides facilities like picking the product from the customer’s place if the customer wishes to return the order. This has deprived Best Buy from a huge crowd to potential customers. There is a severe need that best buy should make some strategies to develop a system of free home delivery. One more factor which bothers most to a lay man is paying high prices. Best Buy must work out some plans to compete online websites and also some emerging electronic store which intend to sell  products keeping low margin money. Serving the customer in better way seems like a past policy of Best Buy. When a company’s customer experience starts to drop, it’s time to sell the stock. I’m afraid that may have happened at Best Buy, especially when I look at their new customer satisfaction surveys. Moments when the customer representative have no clue to the technical aspect of the product has become common. May be some training sessions for the CR’s may come out fruitful. Dominant trends are consistently conspiring against their business model; Best Buy must accept this fact. Out of which buying products from your house sitting on a couch, interests every customer. Moreover the innovative high graphic design and sophisticated virtual display of product is making things work better for online sellers and buyers but a hard nut for companies like best buy. Best buy has been trying aggressively to flourish its market in places like UK, China and may be, this has led Best Buy to get distracted from its home ground of performance. Seems like its high time for Best buy to re-engineer its business module and work hard on customer satisfaction sector. (Sources: American Customer Satisfaction Index and Devil’s Advocate Group analysis) Many store focus on customer service, but Best Buy does not care. According to â€Å"http://www.resellerratings.com/store/Best_Buy† Best Buy one of the lowest customer rating on customer service. I myself had a bad experience when I bought a Dell laptop on Best Buy online. The laptop will crash (blue screen) when I use more than 30 minutes. First, I thought the software I tried to find the problem, but not found anything. When it crashed too many times, I decided to restore the Windows. It still crashed then I decided to exchange the laptop at Best Buy Saugus (close to my house). I met a lady there then explained the problem. After that she took my laptop to test. When she came back she refused to accept laptop return. She told me there was nothing wrong on that laptop. I told her I cannot use that laptop it crashed if I use more than 30 minutes. I had used that laptop for 5 days and the return policy is 15 days (now change to 30 days), so I can exchange. She replied if I want to return and exchange I have to pay 15 percent restocking fees. I asked her why, she replied because I returned a good laptop. I kept explaining her about the laptop problem, but she did not listen to me then she called another customer â€Å"Next customer†. I was very  angry. 4. Lack of Employee’s Knowledge and the use of technology: Best Buy has sufficient number of employees to serve the crowd of customers. Majority of the best buy’s employee does not have the best convincing power at first glance. They employees do not have sufficient knowledge about the product and are not updated with the updating of technology. From my personal experience I found that some of the employees do not have sufficient knowledge about the products. I went there to buy an Apple Mac Book Pro. I had used apple products since a long time so I asked them some technical queries. And out of my 7 queries they were able to solve only 4 of my queries, and on asking about the rest they replied me that we are extremely sorry but we do not have an answer for this. Then I went to apple store and placed the same 7 queries on their desk and I got the solution for all my 7 queries. The department also faces problems of over stock and out of stock of materials. Best buy is also not updated with the technology of automatic request of placing orders. There are problems when the materials go out of stock and the customer is in need to that particular material only. Being a competitive world the customer won’t wait for couple of days to get that material from best buy instead would go to any other store and get that material. These problems can be solved if technologies are used to a good extent. Comparing Wal-Mart and best buy Wal-Mart uses an automatic re-order technique for all its materials. For example: 100 counts of chips are ordered and the details are placed in their database. As the counts of the chips from their database go below 30 the system automatic places a re-order of 100 counts of chips. Using this way they never face an over stock and out of stock problems. The database is up to date with the latest entries of the inventories. 5. Inventory management: On the management side of the company it has big problems with its inventory management as well as its compensation policy. Best buy was very slow to enter the online market and has not done well in making its website very good. The company inventory system should change to a more perpetual inventory similar to Wal-Mart. And it should have a compensation system based on good sales as well as good service. A better Human resource policy based on production would better serve the company. The company must  also find a way to capture the customer in the store and not has the customer use the store as testing center to later buy over the internet. The company has failed to make this happen; better sales training as well as customer service training could offset this. Additionally Best has got to rid of selling DVD’s, and CD’s. They are taking up way to much space in the stores and they are selling fast enough due to them being obsolete. The company has tried to change this buy opening Best Buy mobile stores in shopping malls similar to cell phone providers. This has reduced cost associated with operating the big box store that best buy has been known for. This also reduces square footage to help in making the company more profitable. If they can continue to use this placement strategy they might be able to save the company. All in all this improvements may help the company in the short term. In the long term Amazon will prevail and put Best Buy out of business. 6. Online- a bad decision: Nowadays, the numbers of customers shopping online increase significantly. It is more convenience save time and money. Many retailers are focusing on Online shopping including Best Buy, Wal-Mart, Target, Sear, Home Depot, Loews, Amazon, Newegg, and so on. Many Online stores do much better than Best Buy. Best Buy Online has many weaknesses including: shipping fees, price management, inventory management, and customer service. Best Buy does not care much about shipping fees. The shipping fees is too expensive if compare to other stores. For example, If I want to buy Number Hunt (baby toy), it cost $10.50, plus shipping $6.14, and plus tax $0.65. Total cost would be: $10.50 + $6.14 + $0.65 = $17.29 If I buy three Number Hunt, Best Buy will charge the shipping fee three times ($6.14 x 3 = $18.42). The total for three Number Hunt would be $51.87. If I buy from Amazon it costs $9.99 plus $4.99 shipping. Total $9.99 + $4.99 = $14.98. If I buy three Number Hunt, Amazon will not charge shipping free because the total over $25.00. The total for three Number Hunt would be $9.99 x 3 = $29.97. This example ( $51.87 VS $29.97) show me that Best Buy online store cannot compete with big online stores like Amazon.com or Newegg.com at all. Best Buy should talk to shipping companies to get the same shipping deal like Amazon or Newegg otherwise Best Buy will become a showroom. Another problem, Best Buy Online  has to compete with other retail store like Wal-Mart, Target, Sear, Kmart, Home depot, Loews and so on. The small stuff like toy customers most likely would buy from Walmart.com, because the price always cheaper than Best Buy and Wal-Mart charge flat rate shipping. It means whether customers buy one or five items they pay the shipping for the first item only. Whey Best Buy charge every single item? Best Buy has price match policy to compete with other stores, but the policy does not work on Best Buy Online. Best Buy has small AT&T in side and an Apple retail store. If customers want to buy I-phone 5 in store, Best Buy will sell to contract customers only. On other hand, customer can buy an I-Phone 5 without contract on Best Buy Online. It costs $699.00 ($50 more expensive that Apple Store). Why Best Buy sell $50 more expensive than Apple store? On customer point of view, it does not make any scene to buy an I-Phone 5 without contract form Best Buy Online at all. That problem make customers decide to shop at Apple directly rather than via Best Buy Apple store. Best Buy Online does not have a good inventory management to manage the inventory. Many customers could not receive what they order, because Best Buy Online does not have in their warehouse to ship. Here a quote from resellerratings.com â€Å"awful. Service was bad, rude, and nasty. Didn’t have the product I wanted and told me they did. I had to wait 2 weeks to get it. I called and they said, there was nothing they could do. The entire district was out. That is awful inventory management to let 15 stores go out of a product. Will not be shopping here again† Sometimes there are plenty order items in the local Best Buy Store, but Best Buy local stores could not ship the item that was order on Best Buy Online. It is not a good business practices. Best Buy should allow local store to ship the item if Best Buy Online warehouse run out of stock to keep the customers happy and get the item that they ordered. Another alternative solution, Best Buy could adopt just on time inventory management to manage the inventory. If Best Buy wants to survive and be a best place to buy electronic product online, they should implement the shipping fees, price management, inventory management, and customer service. Best Buy Online has lost many customers. If the customers keep leaving Best Buy Online like that Best Buy Online would be out of business like Circuit City. It is not too late, but the implementation should take an action soon. Conclusion: In conclusion we feel that Best Buy would have to make a huge investment in operations management, training, inventory management and customer service to turn around the company. We feel collectively the end of Best buy is coming soon due to the above factors and more importantly the online retailers. Because of the deficiencies in Best Buy the company will not be able to recover from its flaws. We feel that the consumer will continue to use the Best Buy for showroom purposes and then buy online. The investment in time and dollars needed to change the company will not be worth it in the long run References: www.amazon.com www.newegg.com www.walmart.com http://www.resellerratings.com/store/Best_Buy www.bestbuy.com www.seekingalpha.com http://www.customerthink.com http://minnesota.cbslocal.com/2012/01/18/best-buy http://www.heartofthecustomer.com http://storefrontbacktalk.com/e-commerce

Sociological Theories About The Modern Family

â€Å"The family is the most important institution in society. † This statement is repeated in almost every sociology text in some form or another. However, current trends suggest that there may be some inaccuracies in this claim. Family is indeed important and necessary. It can even be defined as very important, but its relationship to the term institutional may be problematic. The conflict is inherent in the definition of family based of the functionalists and the conflict theorists. Functionalist TheoryThis conservative, macro-level perspective emphasizes the role of family as a social institution that contributes to social stability. Carroll (2012) explains that the violence and terror of the French Revolution and the mass violence resulting from the desperate circumstances of the workers during the Industrial Revolution led to fears of the consequences of a crumbling social order. Out of this fear grew conservative intellectual writings that examined social bonds, rules, and socialization practices that enable society to maintain a sense of stability that benefits all members of society.Functional theorists warn of dire consequences if a strong society and effective socialization practices are not maintained. Carroll explains that Émile Durkheim, the French scholar who first presented this theory, suggested that society had a moral authority to â€Å"limit individual aspirations† in order to maintain norms and values and to limit social change in order to prevent social upheaval. Within this theory, family is seen as the institution that is responsible for socializing children, regulating sexual activity and reproduction, and provides its members with a social identity (Carroll, 2012).Conflict Theory This macro-level perspective focuses on the negative outcomes of societal norms, such as social inequality, and seeks to address and redress the aspects of society that perpetuate these undesirable norms. Carroll (2012) explains that this the ory grew out of the works of Marx and Engels who believed that revolution was a necessary step for transforming a capitalist social order that enslaved the working class (the proletariat) to the ruling class (the bourgeoisie) and perpetuates poverty and misery for the enslaved.The primary conflict according to Marx and Engels is based on perpetuating social norms within a class system that benefits one class over another. Conflict theorists examine how the family unit is also an institution that perpetuates inequality, by reinforcing patriarchy, between members of the family and seeks to find solutions to reduce or eliminate these innate inequalities. Feminist theory, in particular, evaluates how gender inequality is perpetuated within the family as children are socialized to fulfil future social, political, and economic roles (Carroll, 2012).Symbolic-Internationalist Theory A micro-perspective paradigm examines the meanings, interpretations, and understandings of the interactions o f individuals within a society. While this type of theory does not contribute to evaluating and solving social issues such as poverty, racism, sexism, or social change, it does allow a context for understanding the nature of institutions, such as the family, within the macro-perspective theories. Social order is transmitted through symbols— roles, behaviours, and other social constructions— that are integrated as a result of social interactions (Carroll, 2012).Although this is a micro-theoretical paradigm, understanding the interactions, communication, symbols, and expectations could contribute to alleviating the clash between the two macro-level theories. Understanding what works and what does not work permits opportunities to change or delete the aspects of family or family dynamics that contributes to inequality, without dismantling the entire institution and causing complete social upheaval.The Changing Nature of Family O'Neill (2002) evaluates the â€Å"fatherles s family† and provides ample statistics to show that the breakdown of the traditional family of father,  mother, and offspring— due to increasing divorce and out-of-wedlock reproduction— is correlated with poverty, emotional, psychological, and heath problems, and interaction problems with children for lone mothers; health issues or increased engagement in high risk behaviours for non-resident fathers; poverty, deprivation, school troubles, more health problems, and increased risk of abuse for children who do not live with their biological fathers. Her conclusion that these issues are the result of the breakdown of the family is an example of functionalist theory.She suggests that the outcomes are the result of the social breakdown of a vital social institution. A conflict theorist would more than likely suggest a different reason for the observed dysfunctions outlined by O'Neill (2002). The symbolic-internationalist would provide very specific context of the n ature of the interactions within the families described by O'Neill and may find that the dysfunctions are not the result of resistance to socialized norms, but in fact due to conformity.The â€Å"fatherless† family is led by a mother, and she is likely to be subject to societal norms that diminish her ability to earn as much as her male counterparts (increased poverty— which contributes to greater stress, diminished health, deprivation, etc. ). The functionalist would argue that the distressing results found in these families are also necessary outcomes, as society must not reward those who seek to disrupt the social order.This functionalist attitude is very evident in current American political discourse as a number of far right-wing conservative politicians are introducing and passing legislation that reflects their fundamentalist Christian ideals in which patriarchal values that limit the â€Å"individual aspirations† of women to control their own reproductio n. The traditional family consists of a bread-winning father and a home-making mother, an ideal that is held sacrosanct by this group of legislators.The conflict theorist, by contrast, seeks to discover the constructs in society and within the family that cause the inequalities, rather than to blame the inequalities on those who are trapped by them for not conforming to the functionalist ideals. Families are continuing to evolve— at least the definition is— in that there is increasing acceptance— both social and legal— for families in which the primary adults are a same-sex couple, either with or without offspring.The battle of ideologies still rages on in the United States, although an increasing number of states  have extended legal status to families of this type. In Canada, the Civil Marriage Act was passed in 2005 and after a brief re-vote in 2007— which defeated the Conservative motion to restore the traditional definition of marriageâ€⠀ marriage equality became a non-issue (politically) when the prime minister announced his government would not bring it up again (Makarenko, 2007). Family as a Societal Institution The family serves a functional purpose in society in that it provides the environment for producing, nurturing, and socializing the next generation.However, the nature of family has changed significantly and some of the new styles of families— single parent families, cohabiting unions, same-sex intimate partnerships, egalitarian marriages, and blended families— contradict the societal norms representative in a traditional patriarchal family. Cherlin (2004) explains that the â€Å"weakening of social norms that define partners' behaviour† has deinstitutionalized marriage. The political and religious backlash is indicative of the conservative functionalist view of social stability being reliant upon maintaining the status quo. In fact, these conservatives are holding many of societies ills (e.g. , increased crime, debilitating poverty, sexual promiscuity, etc. ) as evidence that society is breaking down and traditional norms must be re-established in order to preserve order.The conflict theorists would argue that social norms are, in fact, the source of the dysfunctions in society. The solution is somewhere in between. The social norms that define family as an institution are likely problematic. The aspects of family that support and nurture intimate partners and children are vital to our continued well-being. In fact research suggests that the â€Å"symbolic significance† of marriage is still valued by individuals (Cherlin 2004).Family as a refuge, a safe place to grow, learn, and achieve, is an ideal that inspires us, but family as a tool of the state to perpetuate inequity is what makes it an institution. The functionalists are correct, the institutions are failing, but a new family paradigm is emerging. Family is more about the relationships and what members of families can do for each other, rather than what the unit can do for the state. Burgess and Locke (1945) argued that the family is moving away from â€Å"institution† and moving toward â€Å"companionship†. Perhaps it is time to let go of the functionalist  definition and embrace the research of the social internationalists â€Å"to understand the other person's symbols and meanings†¦ [and] approach common ground† (Hammond, 2009).Inglehart and Baker (2000) found evidence in their World Values Surveys— that included 65 societies that represented 75 percent of the world's population— that religious and traditional values continue to leave an imprint upon cultures but economic development is â€Å"associated with shifts away from absolute norms and values toward values that are increasingly rational, tolerant, trusting, and participatory.†Conclusion The modern definition of family is much too diverse to fit the functionalists' traditional paradigm as an institution designed to perpetuate social norms in order to maintain social stability. Some modern families are examples of contradictory norms and are held up as examples by conservatives as the very reason society is on the brink of chaos. However, it is unlikely that society is in fact in danger of a complete breakdown. The new families are actually indicative of a society that is moving into a new paradigm where diversity is embraced.Family is still valued and supported, but not as an institution that perpetuates social norms, but as a function that supports individual growth and security. The nature of this societal grouping is one of affection and security for all its members and as such will remain important and as long as families— of all types— are supported and sustained by society and by its members, the larger community will also benefit with the same stable society that the functionalists so adamantly wish to preserve. Sociological Theories About The Modern Family â€Å"The family is the most important institution in society. † This statement is repeated in almost every sociology text in some form or another. However, current trends suggest that there may be some inaccuracies in this claim. Family is indeed important and necessary. It can even be defined as very important, but its relationship to the term institutional may be problematic. The conflict is inherent in the definition of family based of the functionalists and the conflict theorists.Functionalist TheoryThis conservative, macro-level perspective emphasizes the role of family as a social institution that contributes to social stability. Carroll (2012) explains that the violence and terror of the French Revolution and the mass violence resulting from the desperate circumstances of the workers during the Industrial Revolution led to fears of the consequences of a crumbling social order. Out of this fear grew conservative intellectual writings that examined social bonds, rules, a nd socialization practices that enable society to maintain a sense of stability that benefits all members of society.Functional theorists warn of dire consequences if a strong society and effective socialization practices are not maintained. Carroll explains that Emile Durkheim, the French scholar who first presented this theory, suggested that society had a moral authority to â€Å"limit individual aspirations† in order to maintain norms and values and to limit social change in order to prevent social upheaval. Within this theory, family is seen as the institution that is responsible for socializing children, regulating sexual activity and reproduction, and provides its members with a social identity (Carroll, 2012).Conflict TheoryThis macro-level perspective focuses on the negative outcomes of societal norms, such as social inequality, and seeks to address and redress the aspects of society that perpetuate these undesirable norms. Carroll (2012) explains that this theory gr ew out of the works of Marx and Engels who believed that revolution was a necessary step for transforming a capitalist social order that enslaved the working class (the proletariat) to the ruling class (the bourgeoisie) and perpetuates poverty and misery for the enslaved.The primary conflict according to Marx and Engels is based on perpetuating social norms within a class system that benefits one class over another. Conflict theorists examine how the family unit is also an institution that perpetuates inequality, by reinforcing patriarchy, between members of the family and seeks to find solutions to reduce or eliminate these innate inequalities. Feminist theory, in particular, evaluates how gender inequality is perpetuated within the family as children are socialized to fulfil future social, political, and economic roles (Carroll, 2012).Symbolic-Internationalist TheoryA micro-perspective paradigm examines the meanings, interpretations, and understandings of the interactions of indiv iduals within a society. While this type of theory does not contribute to evaluating and solving social issues such as poverty, racism, sexism, or social change, it does allow a context for understanding the nature of institutions, such as the family, within the macro-perspective theories. Social order is transmitted through symbols— roles, behaviours, and other social constructions— that are integrated as a result of social interactions (Carroll, 2012).Although this is a micro-theoretical paradigm, understanding the interactions, communication, symbols, and expectations could contribute to alleviating the clash between the two macro-level theories. Understanding what works and what does not work permits opportunities to change or delete the aspects of family or family dynamics that contributes to inequality, without dismantling the entire institution and causing complete social upheaval.The Changing Nature of Family O'Neill (2002) evaluates the â€Å"fatherless famil y† and provides ample statistics to show that the breakdown of the traditional family of father,  mother, and offspring— due to increasing divorce and out-of-wedlock reproduction— is correlated with poverty, emotional, psychological, and heath problems, and interaction problems with children for lone mothers; health issues or increased engagement in high risk behaviours for non-resident fathers; poverty, deprivation, school troubles, more health problems, and increased risk of abuse for children who do not live with their biological fathers. Her conclusion that these issues are the result of the breakdown of the family is an example of functionalist theory.She suggests that the outcomes are the result of the social breakdown of a vital social institution. A conflict theorist would more than likely suggest a different reason for the observed dysfunctions outlined by O'Neill (2002). The symbolic-internationalist would provide very specific context of the nature o f the interactions within the families described by O'Neill and may find that the dysfunctions are not the result of resistance to socialized norms, but in fact due to conformity.The â€Å"fatherless† family is led by a mother, and she is likely to be subject to societal norms that diminish her ability to earn as much as her male counterparts (increased poverty— which contributes to greater stress, diminished health, deprivation, etc. ). The functionalist would argue that the distressing results found in these families are also necessary outcomes, as society must not reward those who seek to disrupt the social order.This functionalist attitude is very evident in current American political discourse as a number of far right-wing conservative politicians are introducing and passing legislation that reflects their fundamentalist Christian ideals in which patriarchal values that limit the â€Å"individual aspirations† of women to control their own reproduction. The traditional family consists of a bread-winning father and a home-making mother, an ideal that is held sacrosanct by this group of legislators.The conflict theorist, by contrast, seeks to discover the constructs in society and within the family that cause the inequalities, rather than to blame the inequalities on those who are trapped by them for not conforming to the functionalist ideals. Families are continuing to evolve— at least the definition is— in that there is increasing acceptance— both social and legal— for families in which the primary adults are a same-sex couple, either with or without offspring.The battle of ideologies still rages on in the United States, although an increasing number of states  have extended legal status to families of this type. In Canada, the Civil Marriage Act was passed in 2005 and after a brief re-vote in 2007— which defeated the Conservative motion to restore the traditional definition of marriage— marr iage equality became a non-issue (politically) when the prime minister announced his government would not bring it up again (Makarenko, 2007). Family as a Societal Institution The family serves a functional purpose in society in that it provides the environment for producing, nurturing, and socializing the next generation.However, the nature of family has changed significantly and some of the new styles of families— single parent families, cohabiting unions, same-sex intimate partnerships, egalitarian marriages, and blended families— contradict the societal norms representative in a traditional patriarchal family. Cherlin (2004) explains that the â€Å"weakening of social norms that define partners' behaviour† has deinstitutionalized marriage. The political and religious backlash is indicative of the conservative functionalist view of social stability being reliant upon maintaining the status quo.In fact, these conservatives are holding many of societies ills (e .  g. , increased crime, debilitating poverty, sexual promiscuity, etc. ) as evidence that society is breaking down and traditional norms must be re-established in order to preserve order. The conflict theorists would argue that social norms are, in fact, the source of the dysfunctions in society. The solution is somewhere in between. The social norms that define family as an institution are likely problematic. The aspects of family that support and nurture intimate partners and children are vital to our continued well-being. In fact research suggests that the â€Å"symbolic significance† of marriage is still valued by individuals (Cherlin 2004).Family as a refuge, a safe place to grow, learn, and achieve, is an ideal that inspires us, but family as a tool of the state to perpetuate inequity is what makes it an institution. The functionalists are correct, the institutions are failing, but a new family paradigm is emerging. Family is more about the relationships and what mem bers of families can do for each other, rather than what the unit can do for the state. Burgess and Locke (1945) argued that the family is moving away from â€Å"institution† and moving toward â€Å"companionship†.Perhaps it is time to let go of the functionalist  definition and embrace the research of the social internationalists â€Å"to understand the other person's symbols and meanings†¦ [and] approach common ground† (Hammond, 2009). Inglehart and Baker (2000) found evidence in their World Values Surveys— that included 65 societies that represented 75 percent of the world's population— that religious and traditional values continue to leave an imprint upon cultures but economic development is â€Å"associated with shifts away from absolute norms and values toward values that are increasingly rational, tolerant, trusting, and participatory.†ConclusionThe modern definition of family is much too diverse to fit the functionalists' tra ditional paradigm as an institution designed to perpetuate social norms in order to maintain social stability. Some modern families are examples of contradictory norms and are held up as examples by conservatives as the very reason society is on the brink of chaos. However, it is unlikely that society is in fact in danger of a complete breakdown. The new families are actually indicative of a society that is moving into a new paradigm where diversity is embraced.Family is still valued and supported, but not as an institution that perpetuates social norms, but as a function that supports individual growth and security. The nature of this societal grouping is one of affection and security for all its members and as such will remain important and as long as families— of all types— are supported and sustained by society and by its members, the larger community will also benefit with the same stable society that the functionalists so adamantly wish to preserve.

Lobbying paper Essay Example | Topics and Well Written Essays - 500 words

Lobbying paper - Essay Example The agency, serves clients such as universities, companies, cities, trade associations and even individuals. Meyers and Associates lobby mostly legislative issues to the federal government and congress on behalf of clients. The organization’s mission is ‘to be successful in capitalizing on the opportunities and meeting challenges presented by Washington it is advantageous to have Washington representation that can combine experience and national contacts’. Meyers and Associates as an organization developed with the intention of representing private lobbying. This agency derives its fund from revenue raised through charity and clients’ payments. Meyers and Associates, as an organization prevented closing of military bases. In particular, it lobbied against closing military bases located in Mississippi and Texas. The closing of the bases was between the years 1993 and 2005. Thanks to this organization some bases were spared (Zetter, 2008). Lobbying has ensured that opinions from minority, powerless and poor groups have reached the people sitting in congress and federal offices. Through lobbying, also the government has become acquainted on the pressing issues affecting individuals and organizations. Equally, lobbyists assist Congress in formulating laws, which will be practical and operational (Zetter, 2008). Lobbying as a practice is faced by the following challenges inadequate finances to support the organization’s endeavors, failure on the side of lobbyists to influence staff in Congress offices, and formulation of impractical legislations (Zetter, 2008). Important factors in lobbying include knowing influential staffs and secretaries working in federal and Congress offices. Lobbyists should get familiar with current issues and bills being processed, have fingertip information on legislators, and interest of clients should always be

Designer Research Project Paper Example | Topics and Well Written Essays - 750 words

Designer Project - Research Paper Example His talent and professionalism enabled him to work for a variety of companies, like IBM and NeXT. While working as a consultant for these corporations, he was responsible for conceiving detailed communication systems. The systems varied from logos, building signage, packaging and a variety of other designs that are still used to date. Consequently, I think that is why I chose him for this project. His work on IBM and NeXT revolutionized the marketing strategies adopted by technological companies, and as a Computer Science major, I was drawn to his work. The growth of NeXT as a company and as a corporate identity, can be partially attributed to Paul’s work on the company’s logo and brochures. Paul’s work was not only visually stimulating, but evoked emotions of admiration. He adopted a problem-solving method to graphic design and in turn, it earned him devoted admirers on a global scale, even ten years after his death. His work was essential in swaying consumers to certain brands, because it was trusted by many consumers to communicate an essential truth via the brand’s visual cues. Indeed, he was skilled in brand identity. For Paul Rand, he was motivated by modest expectations and good ideas. He was on various occasions quoted saying that, in order to comprehend what a logo was capable and incapable of accomplishing, then a person’s designs would always need to achieve the simplicity that all people crave for. He emphasized that simplicity was not the aim of a project, but was a by-product of modest expectations and a good idea. In addition to his affinity for good ideas and modest expectations, presentation was key to him. He was adamant that for every design a designer is involved with, he should strive to tell a story that is unique and tailored in accordance with the wishes of the client. The quality of work produced for a client and the clarity with which it conveys the

The Effects of Global Warming and Climate Change on Greenland and Ice Research Paper

The Effects of Global Warming and Climate Change on Greenland and Ice Melting - Research Paper Example Climate change in Greenland and the surrounding areas can be measured as per the remaining ice cap and the sea level. There are three key effects of climate change in Greenland consist of melting of the ice cap, thinner ice in the sea and permafrost. There are fears that if the ice cap continues melting at the same rate at some point there will be no more ice in green land (Potsdam Institute for Climate Impact Research, 1). The effects so due to the ice cap meting far include glaciers spitting large amount of icebergs into the ocean. Moreover, there are lakes that have recently been forming on the ice leading to water plunging in the ice sheet leading to sliding of water to the seaside. The rate at which ice is melting at the green land cannot be compared with the ice gained or formed during winter (Church et al 136). This means that a lot of water remains in the sea even after solidification during winter. The question many people ask is whether human beings are purely to blame for the occurrence of global warming and its effects (Potsdam Institute for Climate Impact Research 1). However, since many countries today have signed Kyoto protocol it is clear that they have accepted that human activities have many negative effects to the environment (University of Alaska Fairbanks, 1). This is mainly because emissions of carbon dioxide to the atmosphere have led to temperature rise, which has led to melting of the ice. The ice cap at Greenland is essential to humanity existence in various ways one major role that it plays is regulating temperature, as almost ninety percent of the sunrays that hit the ice cap are reflected back. This ensures that the temperature in the atmosphere as well as in the ocean is regulated. Thus, if the ice cap melts then this regulation will no longer be available making the ocean and atmosphere be warmer (Witze, 799). Although, it may take many generations for all the ice to melt down, this is not a consolation since there would be many n egative effects caused by the excess fresh water in the ocean resulting from the melted ice. Studies have proven that it is possible for all the ice to melt, hence if the current global warming rate continues. This is because it is the significant rise of temperature, which has caused the increased melting of the ice. Greenhouse effect causes most of the damage relating to global warming, as carbon dioxide absorbs heat from the sun making it impossible to be reflected back to the sun. This leads to the atmosphere becoming hot and given that the warmth is trapped in the atmosphere, the rise of temperature occurs. There are many effects of melting of Greenland ice; one is that it leads to loss of water bodies this is because the enclosed lakes in the ice are freed when ice melts. The other effect is to the animals that live in the ice caps this is because, over the years, they have adapted to the climate of Greenland and have created their eating habits and migration patterns. However , hunting for food becomes hard without the ice and high sea level. Global warming may cause melting of ice in Greenland, but it also causes global warming (Witze, 800). This is because loss of ice leads to sun rays being absorbed by the ocean increasing ocean temperature, which leads to increase of temperature in the atmosphere, which leads to increase of warmth leading to more ice melting. Rising of the sea level is one of the aftermaths of climate change in the Greenland since when the ice melts the fresh water ends up in

EVALUATION OF PLAY IN DESIGN FOR BEHAVIORAL CHANGE Essay

EVALUATION OF PLAY IN DESIGN FOR BEHAVIORAL CHANGE - Essay Example However, through the interview there are both mistakes and improvements that when well covered would lead to a better game design that would accommodate all the aspects that would have been ignores in the previous design (Wolock et., al, 2010). It would be difficult to design a perfect game without a trial version. Through gained knowledge on the research nature it would be easier for the researcher to come up with aims and objectives that are supposed to be taken into account when designing a game. This would reduce the common mistakes which are obvious even to the fans hence creating a better understanding about the research in both quantitative and theoretical manner (Breakwell, 2006). Through research methodology, the dissertation is aimed at utilizing the various aspects such as philosophy, research design, research approaches and data collection to ascertain the requirements of play and design through research methodology (Ackermann, 2008). Fig1. Designing a game, Accessed from : http://moerg.files.wordpress.com/2011/06/img_1469.jpg?w=390&h=289, on 6th Nov 2011. Research Philosophy: Through the philosophical aspects it is important that the designer realizes the philosophical content of the research, for instance the realism, positivism and interpretive. These factors will determine the effects of the players and the audience. ... Research Strategies: According to Wolock et., al, (2010), in order to achieve any researcher has to strategize on the best methodology to use which depends on the requirements of the research design and play. There are effective research strategies like data collection resources, research objectives and approaches that would enhance the achievement of research project within the requirement, limits and scope of research (Archer, 1993). Working on effective research processes includes but not limited to case study, interviews, experiments, observations, surveys and literature review. These factors bring out a wider perception and research integrity within the projects that were managed according to the experimental analysis (Hourcade, 2008). Data Collection Through appropriate data collection method, the researcher would achieve a good play design with valid and reliable data and information. The researcher should involve both primary and secondary data collection methods (Ackermann, 2008). The primary date collection methods can be done through first hand information obtained from surveys and interviews conducted directly between the interviewer and the interviewee. This reduces chances of conveying irrelevant information as the interviewer would be able to study the interviewee to get more information (Breakwell, 2006). The secondary data collection method includes reading from journals, books and academic articles lust to mention. Once both methods of data collection are conduce about the play design, comparison can be done to ascertain the required information to be implemented on the play design (Bell, 2006) Needs and Pleasures    In order to achieve research design; we have to consider the design practice itself. At first

Financial Appraisal Essay Example | Topics and Well Written Essays - 500 words

Financial Appraisal - Essay Example For ARR, the formula is also simple and easy to understand. However, it neglects time value of money and focuses on profit instead of cash flow. When calculating the NPV in public sector projects, additional factors should be taken into considerations. Because it deals with the public sector, the analysis should go beyond financial to measure the social costs and benefits of the project. For example, even if the project is financially feasible and will yield returns, negative externalities such as pollution should also be taken into account. It should be noted that a governmental institution and the public sector is not a profit maximize but is focused in bringing the highest level of social welfare. Post audit appraisal is essential at the end of the life of the project in order to assess if the initial goals or projections have been adequately met. This also measures the level of understanding of the company in projecting the future of a project. Through post-audit appraisal, the company can evaluate itself on why projections did not materialize. The learning from post-audit appraisal will enable the company to apply it in future project evaluations.

Arab Spring Essay Example | Topics and Well Written Essays - 500 words

Arab Spring - Essay Example This brief analysis essay will compare some of the positive and negative effects that this Arab Spring has had on Egypt as well as to discuss some of the key changes that have taken place as a result. Firstly, it is this author’s strong belief that the Arab Spring in Egypt has created a fundamentally good thing. Whereas before no level of democratic process typified the way in which the government ruled the people, as a result of the Arab Spring in Egypt, elections have been held, a president has been selected, a constitution drafted, and a representative parliament has been formed. As opposed to before where Mubarak’s dictatorship was a seemingly endless definition of the future of the nation, the people of Egypt are now able to take part in their own right to self determination, sovereignty, and the democratic process (el Faki 1). In this way, the effect of the Arab Spring has been profound in helping a nation to modernize and realize a long held wish that democracy would come to its inhabitants. The cons to such a process of course involve the painful transition to democracy. It is not the argument of this author that such a transition is without it’s drawbacks. Whereas Egypt has been controlled by one form of absolute monarch or dictator for the better part of the past several hundred years, providing a smooth and painless segue into democracy would be all but impossible. As such, some of the cons that have followed the process are the actions of key groups that feel that their rights have not been fully represented to a satisfactory extent within the confines of the democratic system. As such, these individuals have resorted to violence, coercion, and other illegalities as a means of expressing their own unique view. However, as has been stated, such is to be expected within the process of democratization and the untimely end of an

Healthcare Information Management Personal Statement

Healthcare Information Management - Personal Statement Example are record system has proven to be a better means of documenting medical records and this is the reason that I am interested in using this method in documenting the medical records of patients. I am sure that the proper utilization of the electronic medical records system would help have an easy and fast access to the medical information of my clients and this means that less time would be spent on data retrieval. The electronic healthcare record system has not only revived the medical practice, but it has also revitalized the medical practitioners themselves. This technological innovation would guarantee reduced clinical, medical and prescription errors, thus departing from the age of paper healthcare records, where errors are too many. This has further influenced my decision to work in the healthcare information field using this great technological advancement. The primary job of a medical practitioner is to cater for the needs of their patients and meet their expectations in terms of qualitative healthcare. The electronic system would not only give me a satisfactory level of job satisfaction, but it would also give me the opportunity to meet the expectations of my clients in terms of healthcare delivery and services. This great innovation would not only save the time of doctors, but it would also save the time of the patients. This is another reason that I would like to work in this field using the electronic healthcare record

Environmental Problems and Solutions Case Study

Environmental Problems and Solutions - Case Study Example Whenever more energy has been trapped than needed, it effect can increase the climate of the earth. There are certain reasons because of which these gases trap more energy than needed. Nature has kept the atmosphere in such a balance that any meddling in its route or cycle may harm the entire cycle. The present atmosphere of our planet is according to needs of human body. But time and again man has meddled with this cycle. The excessive use of explosives either during the war or on testing basis is the basic reason for the increase in global atmosphere. The explosives used in the wars carry dangerously poisonous and hot gases that mix with the greenhouse gases 2and result in the trap of more heat than needed. Similarly, the factories emit poisonous gases. Here the developed countries like USA and EU are the greater contributors, because they have more factories than the rest of the world. The underdeveloped countries are also adding to this global warming because the vehicles used are normally so deplorably in a bad condition that they emit many times more poisonous smoke than the normal order. These haphazard practices of human beings are resulting in certain damages to the natural cycle of life. The global temperature has been changed rapidly. ... The ecosystem of our planet is also getting becoming chaotic, because of the human folly. This folly creates a vicious circle, where each problem exacerbates other problems which feedbacks into each other. A recent research of population trends, climate change, increasing pollution and emerging diseases found that 40 percent of deaths in the world could be attributed to environmental factors. Actually the ecosystem3 has been set in such a way that every species depends on the other. If one gets disturbed or destroyed, the other will definitely suffer. Sometimes even the entire species are wiped out because of certain human irregularities and indiscipline. The ozone layer is also getting damaged day by day. The destruction of ozone layer is also increasing the UV-radiation, that combined with higher ocean temperature, cause the reduction in carbon dioxide trapping mechanism of the oceanic phytoplankton biomass ,which adds to global warming process. When the warming reaches a certain level, it releases huge amounts of greenhouse gasses trapped in the permafrost. This enhances the global warming, and the polar destruction of ozone, and so on. Global warming also results in the rise of sea level. The general scientific law that liquid expands on heating is quite applicable to the rise in sea level. When the seawater gets warm, its level rises 4resulting in irreparable loss and damage to the land. Many islands disappear completely. Millions dollars worth property and business is obliterated in a few seconds. History is witness to the fact that more people have died by the after effects of the natural catastrophe than the catastrophe itself. Floods and

Change and the Management of Change Essay Example for Free

Change and the Management of Change Essay Change Management Planning, Implementing, controlling, and reviewing the movement of an organization from its current state to a new one Causes of Change External Incremental (Evolutionary) †¢Occurs slowly over time (fuel-efficient cars) Dramatic (Revolutionary) †¢Can cause many problems especially if unexpected †¢Might lead to total rethink of operation of organization oBusiness Process Re-Engineering Business Process Re-EngineeringFundamentally rethinking and redesigning the processes of a business to achieve a dramatic improvement in performance Globalization-Increasing interdependence for countries’ economies through free trade and multinational company investment †¢New opportunities to sell products in other countries †¢Increased competition from products made more cheaply in other countries-often by multinationals †¢Use either pan-global marketing for localization strategies †¢Achieve and try to maintain a competitive advantage Technological Advances-Leading to new products and new processes †¢Products: new computer games, iPods and iPhones, hybrid-powered cars. †¢Processes: robots in production; computer assisted design (CAD) in design offices and computer systems for stock control. †¢Staff retraining †¢Purchase of new equipment †¢Additions to product portfolio-Other products may be dropped †¢Need for quicker product development which may require new organizational structures and teams Macro-Economic Change- Fiscal Policy, Interest Rates, Business Cycle†¢Changes in consumers’ disposable incomes-and demand patterns that result from this †¢Boom or recession conditions-need for extra capacity or rationalism †¢Need for flexible production systems (staff flexibility) to cope with demand changes †¢Explain need for extra capacity or need to rationalize †¢Deal with staff cutbacks in way that encourages staff who remain to accept change Legal Changes †¢Changes to what can be sold †¢Working hours and conditions †¢Staff training on company policy †¢Flexible working hours and practices Competitors’ Actions †¢New products †¢Lower prices †¢Higher promotional budgets†¢Encourage new ideas from staff †¢Increase efficiency by staff accepting need to change production methods †¢Ensure resources available to meet challenge Environmental Factors †¢Increase green consumerism †¢Increasing concern about industry’s contribution to climate change †¢Social and environmental audits supported by strategic changes (recycle packaging) Internal Organizational Changes †¢Delayering* †¢Matrix structure** replaces hierarchical º †¢Retraining of less senior staff to accept more responsibility †¢Job security †¢Retraining staff in teamwork and project management Relocation †¢Moving operations to another region/country †¢Redundancy schemes for workers who lose their jobs †¢Grants for those willing to move Cutting Costs To Improve Competitiveness †¢Capital-intensive rather that labour-intensive methods †¢Rationalisation of operations †¢Retraining staff to operate advanced tech. †¢Redundancy schemes for workers who lose their jobs †¢Flexible employment contracts and working practices *DelayeringRemoval of one or more of the levels of hierarchy from an organizational structure **Matrix StructureAn organizational structure that creates project teams that cut across traditional functional departments  ° Level of Hierarchy A stage of the organisational structure at  which the personnel on it have equal status and authority Factors Causing Resistance to Change †¢Fear of Unknown (Uncertainty) †¢Fear of Failure (Skills/Abilities beyond worker’s capabilities) †¢Losing Something of Value (Income, Status, Job Security) †¢False Beliefs (Some convince themselves current system will work to avoid risks) †¢Lack of Trust (Past experiences between workers and managers) †¢Inertia (Might have to work harder) Strategies to Reduce Impact of/Resistance to Change Change Management Force-Field AnalysisAn analytical process used to map the opposing forces within an environment (such as a business) where change is taking place 1.Outline proposal for change 2.List forces for and against change 3.Assign estimated score for each force †¢Weighs importance of forces †¢Helps identify who is most likely impacted by change †¢How to strengthen forces supporting decision and reduce forces against it †¢Can implement leadership style that reduces opposition and resistance to change Project ChampionA person assigned to support and drive a project forward. Their role is to explain the benefits of change and assist and support the team putting change into practice Project GroupsCreated by an organisation to address a problem that requires input from different specialists Promote Change 1.Establish a sense of urgency. 2.Create an effective project team to lead the change. 3.Develop a vision and a strategy for change. 4.Communicate this change vision. 5.Empower people to take action. 6.Generate short-term gains from change that benefit as many people as possible. 7.Consolidate these gains and produce even more change. 8.Build change into the culture of the organisation so that it becomes a natural process.

AirAsias Information Technology Strategy

AirAsias Information Technology Strategy AirAsia was established in 1993 and commenced its operations on 18th November 1996. This airline was originally founded by a government owned conglomerate DRB-Hicom. However, on 2nd December 2001, the heavily indebted airline was purchased by former Time Warner executive Tony Fernandess company Tune Air Sdn Bhd for the token sum of one ringgit. Fernandes proceeded to engineer a remarkable turnaround, turning a profit in 2002 and launching new routes from its hub in KLIA at breakneck speed which undercutting former monopoly operator Malaysia Airlines with promotional fares as low as one ringgit. In 2003, AirAsia has opened a second hub at Senai International Airport in Johor Bahru which is near Singapore. And, it launched its first international flight to Bangkok. AirAsia has therefore started a Thai subsidiary, added Singapore to the destination list, and it commenced flights to Indonesia. Also, flight to Macau was started in June 2004 and flight to Mainland China and the Philippines started in April 2005. In addition, the flight to Vietnam and Cambodia is in the year 2005 while to Brunei and Myanmar is in 2006. With a strong yet simple slogan Now Everyone Can Fly, AirAsia has effectively placed its brand in customers mind when comes to selection of flight. In Malaysia, AirAsia is the second powerful national airline. Also, it was the first successful low cost and ticket-less airline in the Southeast Asian region. It is main based in the Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). And, AirAsia has a registered office in Petaling Jaya, Selangor and its head office is on the grounds of KLIA in Sepang, Selangor. In addition, AirAsia is one of the successful businesses that have adopted cost leadership thoroughly through effectiveness and efficiency of the operation management. AirAsia has broken the travel norms around the world speedily and has become the worlds top airline. Beside this, AirAsia also has a route network that spans more than 20 countries; therefore it continues to pave the way for lower cost aviation through innovative solutions, more efficien t processes and a passionate approach to the business. The vision of AirAsia is to be the largest cost airline in Asia and for the purpose of serving the 3 billion people who are currently underserved with poor connectivity as well as high fares. There are 4 missions such as to be the best company to work for where the employees are treated as part of the big family in AirAsia, to create a ASEAN brand which is being recognized globally, to attain the lowest cost to make sure everyone in the world can fly with AirAsia, and to maintain the highest quality product by embracing technology in order to reduce cost and enhance the service levels of AirAsia. Apart from that, together with the associate companies such as AirAsia X, Thai AirAsia and Indonesia AirAsia, AirAsia is set to take the low cost flying. AirAsia X was established in 2007 in order to provide high frequency as well as point to point networks to the long haul business. Its cost efficiencies are derived from maintaining a simple aircraft fleet and a route network based on low cost airports. Hence, guests will continue to enjoy the low fares through cost savings that AirAsia pass on to the guests. Moreover, AirAsia X franchises the brand name of AirAsia, Asias largest low cost carrier which uses a common ticketing website, uniform, uniforms, and management style with AirAsia. AirAsia X is also affiliated with Virgin Group and Air Canada. Reasons for Adopting Information Technology (IT) There are some factors that contributed to the adoption of IT for AirAsia. As we know, airline companies involved in helping people move from one place to another. And, there are billions of people in this world. Without IT, airline companies will not process smoothly and it might lead to serious confusing among the customers and the company. Also, people in this society are having the same problems such as traffic jam, working pressure and time pressure. They are busy with their works and they focus more on efficiency and effectiveness. They do not want to spend extra time on irrelevant things such as queue up to buy something or waiting for long hours. Therefore, most airlines including AirAsia do offer online reservation for the flight as well as hotel rooms in order to save their customers time as well as enhance customer satisfaction. Apart from that, the technology is getting in advanced in this modern era. There are many companies who have adopted Information Technology (IT) in doing their business. And, this IT has helped in enhancing a better management of the operation of the companies. Also, people in this society are concern more on company who has adopted IT and how this IT will help in making their life better as well as decision making in some tasks. AirAsia therefore choose to adopt IT in its business as to follow up the current IT trend as well as fulfilling the demand of the people in this society. They also implemented different systems to enhance their overall operation which will lead to efficiency and effectiveness of AirAsia. IT Strategy AirAsia has some strategies initiatives which involve IT solutions in order to build its company share and reputation. In order to make its operation effective and efficient, AirAsia has implemented few IT systems in its marketing and sales activities. As you know, E-Commerce in nowadays has become a business tool and it is also a vital strategic management that allows a company to sell, advertise, purchase, supplies inventory tracking as well as sharing of information. Therefore, E-Commerce does become a major success to Airline Company that lead to effectively and efficiency in their business. AirAsia is one of the airline companies that implements E-Commerce and maximizes their information technology usage to manage their company effectively and efficiently including make low cost possibly in their business. In order to maximize their IT, AirAsia has implemented current IT systems, for examples, Yield Management System (YMS), Computer Reservation System (CRS), and Enterprise Resource Planning (ERP). These systems have indirectly generated extra revenues and build customer loyalty for AirAsia. Yield Management System (YMS) which also known as Revenue Management System (RMS) is the process of understanding, anticipating as well as influencing consumer behavior to maximize revenues or profits from a fixed perishable resource. Moreover, there is an important component in this system which is the use of overbooking where sometimes there must be a chance that a customer may not appear during that day. As a good example, it might be possible for a customer to book a ticket for a flight but did not turn up for the departure. And, this may cause the airline to end up flying an empty seat which will then cause lost in revenue for the airline company. But, in order to solve this problem, most airlines routinely overbook their flight. And, if there is an unusually large proportion of the customers show up, the company will be forced to bump some customers to another flight. Second, AirAsia using Customer Reservation System (CRS) which is an integrated web based reservation and inventory system. This includes Internet, airport departure control, call center, as well as others. This system is a direct sales engine that rid off the travel agents effectively and the need to pay for the sales commissions to them. And, CRS is totally customer friendly as the customer can buy or reserve a ticket directly via online without come to the ticket counter. This has brought more customers to use the website often thus reduce the extra costs of customer such as transportation costs. CRS also include Open Skies and New Skies. First, the Open Skies system is a built-in web enabled reservation as well as inventory system. The solution is built expressly in order to satisfy the distinctive needs of airlines that either implements a low cost business or in the process of making their business to more efficient streamline operations. Also, this system can be used either individually or combined yet it is depending on the persons needs. Open Skies helps some low cost airlines in worldwide to become a high performance business that continue to grow widely. On the other hand, New Skies is a next generation of reservation and distribution system. And, it is designed for the worlds fastest growing airlines which include newly launched airlines as well as rapidly growing hybrid airlines such as AirAsia. This system is a comprehensive airline passenger sales and management solution that provides capabilities for integrated online booking, call center reservations, inter-airline and alliance code-share itineraries, departure control as well as travel agency global distribution connectivity. Also, New Skies is based on the Navitaires Open Skies reservation and distribution system that have been used by over 40 of the worlds successful airlines. It represents a giant leap forward in quick deployment, speed to market with the new features and enhancements. New Skies has completely integrated departure control and real time reporting to keep your operation runs smoothly. Also, it is easy to use, change as well as customize. Third, AirAsia implements Enterprise Resource Planning (ERP) system. It is a packaged of business software that integrates organizational processes and functions into a unified system. It helps business management executives with a comprehensive overview of their complete business execution which may influence their business decisions indirectly. There are some examples of functions: Human Resource, Supply Chain Management, Finance and Logistics. These all are stand alone software and has their applications and database. But, with ERP System, all of this individual software can work under one umbrella. And, all the departments can share information easily and it helps to save time and cost. The workflow that has taken place between different departments becomes more automated. The customers also get better services as the person who is using the customer facing applications can access to every bit of information that regarding each relevant process. For an instance, a person who is w ork under sales team can access to the customers product which is still under manufacturing. In addition, ERP system helps to reduce the need to carry large inventories which will increase the operational and labor costs. And, this system is implemented in AirAisia thoroughly. Experience Resulting From The IT Implements Utilization of Information Technology (IT) have directly contributed to the promotional activities, enhance brand equity, and keep the cost as low as possible by enable the customer to direct purchase the ticket online or through sales offices. This has helped the customers to save airline agent fees. The systems that have been implemented by the AirAsia have a significant change to their company. First, AirAsia has used the Yield Management System (YMS) for taking the operating costs and in helping themselves to optimize the price as well as allocate the capacity for maximizing expected profits. For an instance, seats are revenues for AirAsia and other airline companies. Every seat is considered as a profit for them. Therefore, AirAsia has introduced a plan whereby seats are available at different prices in various points of time. Hence, reservation that has done in later time will be charged more compared to one who has reserved earlier for the same seat. As a result of this system, this has enabled AirAsia to understand the behavior of their respective customers and implement effective strategy to generate expected revenues with lowest cost. Second, AirAsia has implemented Computer Reservation System (CRS). AirAsia has used Open Skies to centralize customer data and this has helped AirAsia to track booking and the schedule of flight activities in real. Open Skies booking system which provided by Navitaire performed almost flawlessly on every single occasion and it managed to handle the most demanding requirements of AirAsias flight booking operations. On the other hand, on July 2010, AirAsia has successfully completed the implementation of its new reservation system which called New Skies. This booking system has replaced the previous system, Open Skies. Furthermore, this New Skies gives the customers a new experience as well as providing a greater convenience and generate more savings for the customers. New Skies booking system has make the procedure of booking more efficiently. This New Skies ensure the airlines to maximize the distribution channels and dynamics packaging that emphasize on direct Internet sales. For distribution, New Skies gives AirAsia the control that they need over how quickly they deploy sales fares, special promotion, discounts and electric vouchers to stay ahead of the competitors. This is wise useful for AirAsia in this modern era. It also eliminates the need to maintain multiple databases associated with paper and e-tickets which indirectly increase the operational costs. Same with Open Skies, this New Skies enable the customers to continue booking online and the AirAsia sales offices, counters as well as the call center. They also can normally self check in via the web, mobile and kiosks at the airport together with the self manage options online such as adding check in baggage weight, pick a seat and pre-book meals. However, there are some differences between the Open Skies and New Skies booking system. With the new reservation system, the customers can look for the new feature which is Low Fare Finder. It helps the customers to view the lowest fare available according to their selected destination and date for travel. Also, the customers now are able to book their seats for multi-cities in just one transaction only. For an instance, if the customer plans to fly from Kuala Lumpur to Perth to Singapore and return, the respective customer do not have to make two separate bookings which is only provided by the new reservation system only. In addition, this New Skies booking system is able to support characters such as Mandarin, Japanese and other languages whereby the Open Skies system was able to support alphanumeric characters only. Hence, AirAsia can target multilingual customers globally and stay ahead in the airline industry. Lastly, Enterprise Resource Planning (ERP) is implemented by AirAsia as this enables AirAsia to successfully maintain process integrity, reduce the financial month-end closing processing time, and speed up the reporting as well as data retrieval process. Every department such as financial, marketing and sales are unified into a single IT system to allow the employees to make decisions by viewing enterprise wide information on all airline operations. And, this system helps AirAsia by focusing on capturing transactions in daily operations therefore it helps to save operational costs and this indirectly increase the efficiency and effectiveness in its operation management.

Methods and Models for Measuring Costs

Methods and Models for Measuring Costs Costs are associated with all types of organizations business, non-business, manufacturing, retail and service. Generally, the kinds of costs that are incurred and the way in which these costs are classified depend on the type of organization involved. In your assignment you should explain with examples (use dollar value in your examples): How to measure cost behaviour (cost measurement)? In management accounting, the classification and measurement of fixed and variable cost is based on a body of knowledge that involves a number of assumptions. In many cases, the usefulness of fixed and variable cost data depends on the validity of these assumptions. In order to avoid poor operating results and faulty decision-making that is likely to occur when false cost assumptions are made, the ability to recognize and measure cost behavior is essential. Various theories of Cost behavior are as follows : Variable Cost varies proportionately in total but remains constant on a per unit basis. a. True variable costs proportionately variable (ex. Raw material) amount used directly increases as production increases by the same percentage. b. Step variable costs costs obtainable in large segments (ex. Labor costs of maintenance workers) and that increase or decrease in response to fairly wide changes in activity levels. NOTE: these costs are constant for a certain activity level (relevant range) and then vary in a step like fashion as volume increases. 2. Fixed Costs remain constant in total but vary inversely on a per unit basis (if production increases, then per unit cost decreases; if production decreases, then per unit cost increases) a. Committed fixed costs relate to the investment in plant, equipment and the basic organizational structure of the firm (ex. Depreciation of building and equipment, real estate taxes, insurance, management salaries, etc.) are long term in nature cannot be reduced immediately over a short period of time without seriously impairing either the profitability or the long run goals of a firm. b. Discretionary Fixed Costs ( Managed Fixed Costs ) arise form annual decisions by management to spend in certain fixed costs areas (ex. Advertising, research, management development programs) short term in nature, usually a single year possible to cut back on certain costs for short periods of time with minimum disruptions to long term goals. c. Semi variable or Mixed Costs contains both variable and fixed costs elements at certain levels of activity mixed costs display the same characteristics as a fixed cost at certain levels they display same characteristic as a variable cost (examples: electricity, heat, telephone, maintenance, car rental,copy machine rental) 3. Direct or Indirect Costs a. Direct Costs can be physically traced to the particular segment under consideration (product line, sales territory, division, etc.) b. Indirect Costs must be allocated in order to be assigned to the segment under consideration (indirect cost is manufacturing overhead). NOTE: Indirect Costs are also called Common Costs. 4. Additional Cost Terms a. Controllable Costs if management at a certain level as the power to authorize and influence the cost b. Noncontrollable Costs if management at a certain level is unable to influence the incurrence of the cost. c. Differential Cost present under one alternative but is absent under an alternative course of action. NOTE: Differential costs are also known as incremental costs. d. Opportunity Cost potential benefit that is lost or sacrificed whenzselecting one course of action makes it necessary to give up a different  course of action. Opportunity cost is not recorded in the books of an organization, but is  considered in every decision. e. Sunk Cost already incurred and cannot be changed by any decision made now or in the future. An irrelevant cost in decision-making. The econometrical model which is used to analyze costs is a model in which explanatory variable represents total costs and endogenous variables represent factors that influence their level. Production quantity is the most important factor which determines the level of total costs. Total costs consist of two parts: total fixed costs, which appear independently of the production quantity (when production level is zero) total variable costs, which are dependent only on the production quantity Cost Function : K = F + VX (Where K is total cost, F is Fixed Cost , V is Variable Cost and X is volume) What is cost accounting system and cost allocation?(Managerial Accounting) Sol:Cost accounting is linked to tax accounting, financial accounting and managerial accounting because it is an important component of each discipline as cost accounting involves determining the cost of something, such as a product, a service, an activity, a project, or some other cost object. These costs are needed for several purposes. For example, the costs of products and services produced and sold are needed for both tax and external financial statements. In other words, tax and financial accounting depend on cost accounting to provide cost information. Information about costs is also needed for a variety of management decisions. For example, cost estimates are needed to determine whether or not a product or service can be produced and sold at a profit. Unit costs of a product (or service) are also needed for product pricing and product discontinuance decisions. In addition, accurate cost information is required to determine whether or not a company should make (produce) or buy the raw materials, parts and subassemblies that become part of its major products and services. From this perspective, cost accounting is perhaps underrated as a discipline since none of the other disciplines including tax accounting, financial accounting or managerial accounting could exist without cost accounting. The costs associated with a manufacturing firm are separated into two broad categories. These include manufacturing costs and selling and administrative costs. This functional separation is important because each category of cost is treated differently in the accounting records. The different treatments are required to obtain proper matching. Manufacturing Costs There are three types of manufacturing costs. These include: 1) direct material or raw material, 2) direct labor, and 3) indirect manufacturing costs, or factory overhead. Direct material becomes the product, or becomes a part of the product. Direct labor converts the direct material into a finished product. Factory overhead represents all the other factory costs that cannot be directly identified with a particular product. This indirect category includes a variety of costs that are discussed in more detail in subsequent chapters. These three types of costs are also referred to as product costs, or inventorial costs, because they are capitalized in (or charged to) the inventory, i.e., they become assets. Matching Accountants capitalize manufacturing costs to obtain proper matching. The matching concept is pervasive in accrual accounting and requires that costs and benefits are matched or brought together on the income statement. In a production setting, the idea is to match the costs of producing a product (or service) against the benefits, i.e., revenue derived from the sale. When the inventory is sold, these costs are charged to an expense account referred to as cost of goods sold. At the end of the accounting period, cost of goods sold is closed to the income summary where, theoretically, matching takes place. Remember that unexpired costs represent assets. Expired costs represent expenses. When the inventory is sold, we say these costs have expired, i.e., the benefits to be obtained (from the effort that generated the costs) have been recognized. Thus, manufacturing costs become expenses when they reach cost of goods sold, but represent assets until the sale takes place. Selling and Administrative Costs In traditional accounting systems, selling and administrative costs are expensed in the period in which they are incurred. Theoretically, if there are future benefits associated with a cost, the cost should be capitalized as an asset rather than expensed. Certainly there are some future benefits associated with costs such as research and development, training, market promotion and advertising. However, these costs are expensed as incurred because it is difficult if not impossible to relate them to the future benefits. As a result, these costs are referred to as period costs. COST BEHAVIOR AND PREDICTION In addition to separating costs into categories such as direct and indirect and manufacturing and non-manufacturing, costs are also frequently identified by their behavior in relation to changes in an activity level. This separation is helpful for planning and budgeting purposes. The major types of costs, in terms of cost behavior, are: 1) variable costs, and 2) fixed costs, 3) semi-variable costs and 4) semi-fixed costs. These concepts are illustrated graphically in Exhibit 1-3 and discussed individually below. Variable Costs Variable costs are those costs that vary with changes in the level of activity. Variable costs tend to increase at various rates that generate linear (straight line) or a variety of non-linear cost functions when the costs are plotted on a graph. The major activity that affects manufacturing costs is production volume, i.e., producing output. Production volume is frequently measured in terms of units produced, direct labor hours used, machine hours used, materials costs or some other production volume related measure. However, other activities that are not related to production volume might also be important in analyzing cost behavior. The recognition that non-production volume related activities also cause, or drive costs is a fundamental idea associated with activity based costing (ABC) Fixed Costs Fixed costs are defined as those costs that do not vary with changes in the activity level. However, this does not mean that fixed costs remain constant. If a production volume based measure is used as the activity, a cost that changes for some reason other than a change in production activity is considered fixed. This simply means that the cost is driven by a non-production volume related phenomenon. For example, property taxes are considered fixed in traditional cost accounting systems that are typically based on production volume related activities. However, property taxes change when the taxing authority changes the tax rate or reassesses the property. The idea to grasp is that the designation of a particular cost as fixed or variable can change when it is analyzed in relation to a different activity. It is also important to understand that the notion of fixed and variable costs is a short run concept. All costs tend to be variable in the long run. Semi-Variable and Semi-Fixed Costs Semi-variable costs are part fixed and part variable. There is a minimum cost (the fixed portion) and a variable portion that increases as activity increases. There are also semi-fixed costs that do not change continuously as the level of activity changes, but do increase in steps as activity increases beyond various levels. These costs are sometimes referred to as step cost and step functions. For example, a single production supervisor (whos salary normally represents a fixed cost) might be adequate until production reaches a certain level, then a second supervisor would need to be hired. Supervisory costs might be driven by the number of production shifts. Cost accounting system requires five parts that include: 1) an input measurement basis, 2) an inventory valuation method, 3) a cost accumulation method, 4) a cost flow assumption, and 5) a capability of recording inventory cost flows at certain intervals. These five parts and the alternatives under each part are summarized in Exhibit 2-1. Note that many possible cost accounting systems can be designed from the various combinations of the available alternatives, although not all of the alternatives are compatible. Selecting one part from each category provides a basis for developing an operational definition of a specific cost accounting system. 1) INPUT MEASUREMENT BASES The basis of a cost accounting system begins with the type of costs that flow into and through the inventory accounts. There are three alternatives including: pure historical costing, normal historical costing and standard costing. Pure Historical Costing In a pure historical cost system, only historical costs flow through the inventory accounts. Historical costs refers to the costs that have been recorded. The term actual costs is sometimes used instead, but the term actual seems to imply that there is one true cost associated with a particular output. But determining the cost of a product, or service requires many cost allocations, e.g., allocating the cost of fixed assets to time periods, and allocating indirect manufacturing costs, or overhead to products. Since there are many alternative allocation methods, (e.g., straight line or accelerated depreciation) the calculated cost of a unit of product or service simply represents an attempt to approximate the true cost. Normal Historical Costing Normal historical costing uses historical costs for direct material and direct labor, but overhead is charged, or applied to the inventory using a predetermined overhead rate per activity measure. Typical activity measures include direct labor hours, or direct labor costs. The amount of factory overhead charged to the inventory is determined by multiplying the predetermined rate by the actual quantity of the activity measure. The difference between the applied overhead costs and the actual overhead costs represents an overhead variance. Standard Costing In a standard cost system, all manufacturing costs are applied, or charged to the inventory using standard or predetermined prices, and quantities. The differences between the applied costs and the actual costs are charged to variance accounts as shown symbolically in the enlarged graphic below. The variances provide the basis for the concept of accounting control, that is somewhat different from the statistical control concept 2) FOUR INVENTORY VALUATION METHODS The four inventory valuation methods that appear in Exhibit 2-1 are arranged in the order of the amount of cost that is traced to the inventory. The throughput method involves tracing the least amount of cost to the inventory, while the activity based method includes tracing the greatest amount of costs to the inventory. In direct (or variable) costing, a greater amount of cost is traced than in the throughput method, but a lesser amount than in the full absorption method. Direct costing and full absorption costing are the traditional methods, while the throughput and activity based methods are relatively new. These inventory valuation methods are very important because they control the manner in which net income is determined. As we shall see is this chapter and subsequent chapters, the amount of net income can vary substantially for different inventory valuation methods. The Throughput Method The throughput method was developed to complement a concept referred to as the theory of constraints. In this method only direct material costs are charged to the inventory. All other costs are expensed during the period. The concept is symbolized in the enlargement below. Sales, less direct material costs is referred to as throughput which reflects how the method got its name. The throughput method does not provide proper matching (as defined by GAAP) because all manufacturing cost, other than direct material are expensed when incurred rather than capitalized in the inventory. Therefore, the throughput method is not acceptable for external reporting although advocates argue that it provides many advantages for internal reporting. The Direct or Variable Method In the direct (or variable) method, only the variable manufacturing costs are capitalized, or charged to the inventory. Fixed manufacturing costs flow into expense in the period incurred. This method provides some advantages and some disadvantages for internal reporting. However, it does not provide proper matching because the current fixed costs associated with producing the inventory are charged to expense regardless of whether or not the output is sold during the period. For this reason direct costing is not generally acceptable for external reporting. The Full Absorption Method Full absorption costing (also referred to as full costing and absorption costing) is a traditional method where all manufacturing costs are capitalized in the inventory, i.e., charged to the inventory and become assets. This means that these costs do not become expenses until the inventory is sold. In this way, matching is more closely approximated. All selling and administrative costs are charged to expense. Technically, full absorption costing is required for external reporting, although many companies apparently use something less than a pure full absorption costing system. The full absorption method is also frequently used for internal reporting. The second major section of this chapter compares the income statements for full absorption costing with those used for direct costing because they are by far the dominant methods. The Activity Based Method Activity based costing is a relatively new type of procedure that can be used as an inventory valuation method. The technique was developed to provide more accurate product costs. This improved accuracy is accomplished by tracing costs to products through activities. In other words, costs are traced to activities (activity costing) and then these costs are traced, in a second stage, to the products that use the activities. The concept of ABC is illustrated in the enlarged graphic below. Another way to express the idea is to say that activities consume resources and products consume activities. Essentially, an attempt is made to treat all costs as variable, recognizing that all costs vary with something, whether it is production volume or some non-production volume related phenomenon. Both manufacturing costs and selling and administrative costs are traced to products in an ABC system. Note that treating selling and administrative costs in this way is not acceptable for external repor ting. 3) FOUR COST ACCUMULATION METHODS Cost accumulation refers to the manner in which costs are collected and identified with specific customers, jobs, batches, orders, departments and processes. The center of attention for cost accumulation can be individual customers, batches of products that may involve several customers, the products produced within individual segments during a period, or the products produced by the entire plant during a period. The companys cost accumulation method, or methods are influenced by the type of production operation and the extent to which detailed cost accounting information is needed by management. Job Order In job order costing, costs are accumulated by jobs, orders, contracts, or lots. The key is that the work is done to the customers specifications. As a result, each job tends to be different. For example, job order costing is used for construction projects, government contracts, shipbuilding, automobile repair, job printing, textbooks, toys, wood furniture, office machines, caskets, machine tools, and luggage. Accumulating the cost of professional services (e.g., lawyers, doctors and CPAs) also fall into this category. Chapter 4 illustrates a cost accounting system that includes normal historical costing as the basic cost system, full absorption costing as the inventory valuation method and job order costing as the cost accumulation method. Process In process costing, costs are accumulated by departments, operations, or processes. The work performed on each unit is standardized, or uniform where a continuous mass production or assembly operation is involved. For example, process costing is used by companies that produce appliances, alcoholic beverages, tires, sugar, breakfast cereals, leather, paint, coal, textiles, lumber, candy, coke, plastics, rubber, cigarettes, shoes, typewriters, cement, gasoline, steel, baby foods, flour, glass, mens suits, pharmaceuticals and automobiles. Process costing is also used in meat packing and for public utility services such as water, gas and electricity. Back Flush Back flush costing is a simplified cost accumulation method that is sometimes used by companies that adopt just-in-time (JIT) production systems. However, JIT is not just a technique, or collection of techniques. Just-in-time is a very broad philosophy, that emphasizes simplification and continuously reducing waste in all areas of business activity. JIT systems were developed in Japan and depend on the communitarian concepts of teamwork and continuous improvement. In fact, many of the assumptions, attitudes and practices of communitarian capitalism are included in the JIT philosophy. One of the many goals of JIT systems is zero ending inventory. In a backflush cost system, manufacturing costs are accumulated in fewer inventory accounts than when using the job order or process cost methods. In fact, in extreme backflush systems, most of the accounting records are eliminated. The production facilities are also arranged in self contained manufacturing cells that are dedicated to the production of a single, or similar products. In this way more of the manufacturing costs become direct product costs and fewer cost allocations are necessary. Thus, more accurate costing is obtained in spite of the fact that the cost accumulation method is simplified. The just-in-time philosophy and related accounting methods are discussed in Chapter 8. Hybrid, or Mixed Methods Hybrid or mixed systems are used in situations where more than one cost accumulation method is required. For example, in some cases process costing is used for direct materials and job order costing is used for conversion costs, (i.e., direct labor and factory overhead). In other cases, job order costing might be used for direct materials, and process costing for conversion costs. The different departments or operations within a company might require different cost accumulation methods. For this reason, hybrid or mixed cost accumulation methods are sometime referred to as operational costing methods. 4) FOUR COST FLOW ASSUMPTIONS A cost flow assumption refers to how costs flow through the inventory accounts, not the flow of work or products on a production line. This distinction is important because the flow of costs is not always the same as the flow of work. The various types of cost flow assumptions include: specific identification (e.g., by job), first in, first out, last in, first out and weighted average. Costs flow through the inventory accounts by the job in a job order cost system which represents an example of specific identification. The requirements of the various jobs determines the timing of the cost flows. Simple jobs tend to move through the system faster than more complex jobs. The first-in, first-out (FIFO) and weighted average cost flow assumptions are used in process costing. Since costs are accumulated by the process or department in a process cost environment, a cost flow assumption is needed to determine the treatment of the beginning inventory. When FIFO is used, it is assumed that the units of product in the beginning inventory are finished first and transferred to the next department before any of the units that are started during the period. The group of units in the beginning inventory maintain their separate identity and prior period costs. However, when the weighted average cost flow assumption is used, the beginning inventory units lose their separate identity because they are lumped together with the units of product started during the period. Process costing tends to be fairly challenging, therefore you may find these introductory concepts to be confusing. Although last-in, first-out (LIFO) is frequently used for tax reporting purposes, it is not normally used in the accounting records. For this reason, we consider the FIFO and weighted average cost flow assumptions in Chapter 5, but leave the LIFO cost flow assumption for courses that emphasize financial and tax reporting. 5) RECORDING INTERVAL CAPABILITY Inventory records can be maintained on a perpetual or a periodic basis. Conceptually, the perpetual inventory method provides a company with the capability of maintaining continuous records of the quantities of inventory and the costs flowing through the inventory accounts. The periodic method, on the other hand, requires counting the quantity of inventory before inventory records can be updated. In the past, manufacturers tended to keep perpetual inventories, while retailers used the periodic method. However, today a variety of modern point of sale devices and dedicated microcomputer software are readily available to provide any company with perpetual inventory capability. Cost allocation is the assigning of a common cost to several cost objects. For example, a company might allocate or assign the cost of an expensive computer system to the three main areas of the company that use the system. A company with only one electric meter might allocate the electricity bill to several departments in the company.Allocation implies that the assigning of the cost is somewhat arbitrary. Some people describe the allocation as the spreading of cost, because of the arbitrary nature of the allocation. Efforts have been made over the years to improve the bases for allocation. In manufacturing, the overhead allocations have moved from plant-wide rates to departmental rates, from direct labor hours to machine hours to activity based costing. The goal is to allocate or assign the costs based on the root causes of the common costs instead of merely spreading the costs. Direct costs can be physically traced to each department.Indirect costs must be allocated. Many companies develop allocation methods to assign service department costs to the producing departments. All organizations accumulate costs for their products or services for financial reporting purposes. An accounting system will assign to a departments output all its direct costs plus all the indirect costs allocated to it. A cost driver that has a logical, cause-effect relationship to the cost will be used as a cost-allocation base. Linking costs with cost objectives is accomplished by selecting cost drivers.When used for allocating costs, a cost driver is often called a cost-allocationbase. Major costs, such as newsprint for a newspaper and direct professionallabour for a law firm, may each be allocated to departments, jobs, and projects on an item-by-item basis, using obvious cost drivers such as tonnes of newsprint consumed or direct-labour-hours used. Other costs, taken one at a time, are not important enough to justify being allocated individually. These costs are pooled and then allocated together. A cost pool is a group of individual costs that is allocated to cost objectives using a single cost driver. For example, building rent, utilities cost, and janitorial services may be in the same cost pool because all are allocated on the basis of square metres of space occupied. Or a university could pool all the operating costs of its registrars office and allocate them to its colleges on the basis of the number of students in each faculty. In summary, all costs in a given cost pool should be caused by the same factor. That factor is the cost driver. Many different terms are used by companies to describe cost allocation in practice. You may encounter terms such as allocate, attribute, reallocate, trace, assign, distribute, redistribute, load, burden, apportion, and reapportion, which can be used interchangeably to describe the allocation of costs to cost objectives. The allocation of costs is necessary when the linkage between the costs and the cost objective is indirect. In this case, a basis for the allocation, such as direct-labour-hours or tonnes of raw material, is used even though its selection is arbitrary. A cost allocation base has been described as incorrigible, since it is impossible to objectively determine which base perfectly describes the link between the cost and the cost objective. Given this subjectivity in the selection of a cost-allocation base, it has always been difficult for managers to determine When should costs be allocated? and On what basis should costs be allocated? The answers to these questions depend on the principal purpose or purposes of the cost allocation. Costs are allocated for three main purposes: 1. To obtain desired motivation. Cost allocations are sometimes made to influence management behaviour and thus promote goal congruence and managerial effort. Consequently, in some organizations there is no cost allocation for legal or internal auditing services or internal management consulting services because top management wants to encourage their use. In other organizations there is a cost allocation for such items to spur managers to make sure the benefits of the specified services exceed the costs. 2. To compute income and asset valuations. Costs are allocated to products and projects to measure inventory costs and cost of goods sold. These allocations frequently service financial accounting purposes. However, the resulting costs are also often used by managers in planning, performance evaluation, and to motivate managers, as described above. 3. To justify costs or obtain reimbursement. Sometimes prices are based directly on costs, or it may be necessary to justify an accepted bid. For example, government contracts often specify a price that includes reimbursement for costs plus some profit margin. In these instances, cost allocations become substitutes for the usual working of the marketplace in setting prices. . What is activity based costing? (ABC system)? Sol : In the past, the vast majority of departments used direct labour hours as the only cost driver for applying costs to products. But direct labour hours is not a very good measure of the cause of costs in modern, highly automated departments. Labour-related costs in an automated system may be only 5 percent to 10 percent of the total manufacturing costs and often are not related to the causes of most manufacturing overhead costs. Therefore, many companies are beginning to use machine-hours as their cost-allocation base. However, some managers in modern manufacturing firms and automated service companies believe it is inappropriate to allocate all costs based on measures of volume. Using direct labour hours or cost-or even machine hours-as the only cost driver seldom meets the cause/effect criterion desired in cost allocation. If many costs are caused by non volume-based cost drivers, Activity-Based Costing (ABC) should be considered Activity Based Costing (ABC) is an economic model that identifies the cost pools or activity centers in an organization and assigns costs to cost drivers based on the number of each activity used. It identifies activities in an organization and assigns the cost of each activity resource to all products and services according to the actual consumption by each: it assigns more indirect costs (overhead) into direct costs.In this way, an organization can precisely estimate the cost of individual products and services so they can identify and eliminate those tha