001_Prologue - bre79352_ch00_001-025.indd Page 5:51:07 PM...

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PROLOGUE Managerial Accounting and the Business Environment << A LOOK AT THE PROLOGUE Today’s managers know that their world is constantly changing and becoming more complex. Before we get down to the basics, this Prologue will introduce you to a few of the revolutionary changes that today’s managers face. A LOOK AHEAD >> Chapter 1 describes the work performed by managers, stresses the need for managerial accounting information, contrasts managerial and financial accounting, and defines many of the cost terms that will be used throughout the textbook. You will begin to build your base there. PROLOGUE OUTLINE Globalization Strategy Organizational Structure Decentralization The Functional View of Organizations Process Management Lean Production The Theory of Constraints (TOC) Six Sigma Technology in Business E-Commerce Enterprise Systems The Importance of Ethics in Business Code of Conduct for Management Accountants Company Codes of Conduct Codes of Conduct on the International Level Corporate Governance The Sarbanes-Oxley Act of 2002 Enterprise Risk Management Identifying and Controlling Business Risks The Certified Management Accountant (CMA)
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T hroughout this book you will study how management accounting functions within organizations. However, before embarking on the study of management account- ing, you need to develop an appreciation for the larger business environment with- in which it operates. The Prologue is divided into nine sections: (1) globalization, (2) strategy, (3) organizational structure, (4) process management, (5) technology in busi- ness, (6) the importance of ethics in business, (7) corporate governance, (8) enterprise risk management, and (9) the Certified Management Accountant (CMA). Other business classes provide greater detail on many of these topics. Nonetheless, a broad discussion of these topics is useful for placing management accounting in its proper context. GLOBALIZATION The world has become much more intertwined over the last 20 years. Reductions in tariffs, quotas, and other barriers to free trade; improvements in global transportation systems; explosive expansion in Internet usage; and increasing sophistication in international mar- kets have created a truly global marketplace. Exhibit P–1 illustrates this tremendous E X H I B I T P – 1 United States Global Trade Activity (in billions of U.S. dollars) 1990 1995 2000 2004 $300 $250 $200 Impor ts to the US (billions ) $150 $100 $50 $0 Canada China German y Japan Mexico United Kin g dom Panel A: Imports to the United States (billions of dollars) $200 $1 8 0 $160 $140 Expor ts fr om the US (billions) $120 $100 $ 8 0 $60 $40 $20 $0 Canada China German y Japa n Mexico United Kin g dom Source: U.S. Census Bureau, Foreign Trade Division, Data Dissemination Branch, Washington, D.C. 20233. www.census.gov/foreign-trade/balance.
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