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- 10 Marks
Question
a) Given the dynamic environment within which organisations operate, the Management Accountant’s role has evolved to include providing information that would assist the firm to design strategies geared towards achieving competitive advantage through sustained customer satisfaction. These strategies target key success factors which include cost efficiency, quality, time, and innovation because of the value placed on them by customers.
Required:
i) Discuss FOUR (4) management concepts that the Management Accountant can use to achieve customer satisfaction. (8 marks)
ii) State FOUR (4) questions that a good decision maker might pose in order to make an assessment of the value of information. (2 marks)
Answer
i) Total Quality Management (TQM):
Total Quality Management is a term used to describe a situation where 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. Through TQM, organizations seek to increase customer satisfaction not only by emphasizing quality products and services but also by providing speedier responses to customer requests.
Benchmarking:
Benchmarking is a technique that is 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 other best-performing organizations, either internal or external to the firm. It enables organizations to achieve high competitive standards desired by customers.
Employee Empowerment:
Employee empowerment relates to providing employees with relevant information to enable them to make continuous improvements to the output of processes. This empowerment allows employees to respond faster to customers, increase price flexibility, reduce cycle time, and improve morale.
Value Chain Analysis:
Value chain analysis is the linked set of value-creating activities from basic raw material sources or component suppliers through to the ultimate end-use product or service delivered to the customer. Value is created through research and development, design, production, marketing, distribution, and customer service. Coordinating the individual parts of the value chain together to work as a team creates the conditions to improve customer satisfaction.
(Any 4 well-explained points @ 2 marks each = 8 marks)
ii) Questions for assessing the value of information: These include:
- What information is provided?
- What is it used for?
- Who uses it?
- How often is it used?
- Does the frequency with which it is used coincide with the frequency with which it is provided?
- What is achieved by using it?
- What other relevant information is available which could be used instead?
(Any 4 points for ½ a mark = 2 marks)
- Topic: Other Aspects of Performance Measurement
- Series: MAY 2020
- Uploader: Kwame Aikins