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Chapter 1: MANAGERIAL ACCOUNTING AND THE BUSINESS ENVIRONMENT GLOBALIZATION Import/Export Data The data reveal an enormous increase in import activity from 1995 to 2007. In particular, imports from Canada, Mexico, and China skyrocketed. The data reveal an increase in exports to Canada and Mexico. Interestingly, the increase in exports to China pales in comparison to the growth rate in imports from China. Internet Usage The internet fuels globalization by providing companies with greater access to geographically dispersed customers, employees, and suppliers. While the number of internet users continues to grow, as of 2008, more than 78% of the world’s population was still not connected to the Internet. This suggests the Internet’s impact on business has yet to fully develop . STRATEGY A strategy should include a plan for attracting customers. A customer value proposition is a reason for customers to choose a company over its competitors. Successful customer value propositions include: Customer intimacy . “You should choose us because we understand and respond to your individual needs better than our competitors.” Operational excellence . “You should choose us because we can deliver products and services faster, more conveniently, and at a lower price than our competitors.” Product leadership . “You should choose us because we offer higher quality products than our competitors.” ORGANIZATIONAL STRUCTURE Decentralization is the delegation of decision-making authority throughout an organization by giving managers the authority to make decisions relating to their area of responsibility. An organizational chart shows how responsibility is divided among managers and it shows formal lines of communication. An organization chart also depicts line and staff positions in an organization. A person in a line position is directly involved in achieving the basic objectives of the organization. Chapter 1 Notes –Page
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A person in a staff position is indirectly involved in achieving those basic objectives. Staff positions support line positions, but they do not have authority over them.
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