Customer orientation This focus makes customer satisfaction an overriding

Customer orientation this focus makes customer

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Customer orientation = This focus makes customer satisfaction an overriding priority and to focus on identifying and achieving the key success factors that are necessary to be successful in today’s competitive environment.
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Focus on customer satisfaction and new management approaches . The factors that organizations must concentrate on to provide customer satisfaction are: cost efficiency, quality, reliability, delivery and the choice of innovative new products. In addition, firms are attempting to increase customer satisfaction by adopting a philosophy of continuous improvement to reduce costs and improve quality, reliability and delivery. Quality Total quality management (TQM) = all business functions are involved in a process of continuous quality improvement that focuses on delivering products or services of consistently high quality in a timely fashion. Focus on customer satisfaction via time as a competitive weapon; providing a speedier response to customer requests, ensuring 100 per cent on-time delivery and reducing the time taken to develop and bring new products to market. Therefore, management accounting now emphasizes more on time-based measures like cycle time ; Only processing time adds value to the product, and the remaining activities are non-value-added activities in the sense that they can be reduced or eliminated without altering the product’s service potential to the customer. Organizations are therefore focusing on minimizing cycle time by reducing the time spent on such activities. Innovation and continuous improvement . Management accounting information systems have begun to report performance measures relating to innovation (e.g.: total launch time new products, assessment of key characteristics of new products relative to competitors, feedback on customer satisfaction on new products launched). Organizations want to enhance customer satisfaction by continuous improvement; management accountants developed systems and measurements that compared actual results with predetermined standards. This process created a climate in which the predetermined standards represented a target to be achieved and maintained. In today’s competitive environment, companies must adopt a philosophy of continuous improvement, an ongoing process that involves a continuous search to reduce costs, eliminate waste and improve the quality and performance of activities that increase customer value or satisfaction. Management accounting supports continuous improvement by identifying opportunities for change and then reporting on the progress of the methods that have been implemented. Benchmarking = increasingly being adopted as a mechanism for achieving continuous improvement. It is a continuous process of measuring a firm’s products, services or activities against the other best performing organizations, either internal or external, to the firm.
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