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Unformatted text preview: Chapter 1 Managerial Accounting o Concerned with providing information to managers-that is, people inside an organization who direct and control its operations. o Provides the essential data that are needed to run organizations. o Prepare a variety of reports Financial Accounting o Concerned with providing information to stockholders, creditors, and others who are outside an organization. o Provides the essential data that are used by outsiders to judge a companys past financial performance. o Oriented toward producing a limited set of specific prescribed annual and quarterly financial statements in accordance with generally accepted accounting principles (GAAP). Globalization o 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 markets have created a truly global marketplace. o Although globalization leads to greater competition, it also means greater access to new markets, customers, and workers. o The internets impact on global business has yet to fully develop. The internet fuels the globalization phenomenon by providing companies with greater access to geographically dispersed customers, emplyees, and suppliers. Strategy o A strategy is a game plan that enables a company to attract customers by distinguishing itself from competitors. The focal point of a companys strategy should be its target customers. A company can only succeed if it creates a reason for customers to choose it over a competitor. These reasons or what are more formally called customer value propositions, are the essence of strategy. o Customer value propositions tend to fall into three broad categories Customer intimacy-The reason that you should choose us is because we understand and respond to your individual needs better than our competitors. [Ritz-Carlton, Nordstrom, and Starbucks] Operational excellence-The reason that you should choose us is because we can deliver products and services faster, more conveniently, and at a lower price than our competitors. [Southwest Airlines, Wal-Mart, The Vanguard Group] Product leadership-The reason that you should choose us is because we offer higher quality products than our competitors. [BMW, Cisco Systems, W.L. Gore] Every organization, large and small, has managers. o Managers are responsible for formulating strategy, making plans, organizing resources, directing personnel, and controlling operations. Managers carry out three major activities o Planning-involves establishing a basic strategy, selecting a course of action, and specifying how the action will be implemented....
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