Learning Outcome 01

Question 1

Strategy?

Answer 1

The general direction in which an organization plans to move to achieve its goals and objectives.

Question 2

Planning?

Answer 2

Selecting a course of action and specifying how the action will be implemented.

Question 3

Implementation?

Answer 3

Putting the plans into effect.

Question 4

Control?

Answer 4

The process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals.

Question 5

Describe the impact of globalization on business.

Answer 5

Over the past three decades, several factors have led to an increase in worldwide competition in many industries. These include
improvements in global communication and transportation systems, increasing sophistication in international trade markets, and reduction
in trade barriers achieved through bilateral, trinational, and multinational free trade agreements, such as Canada’s agreement with the
United States and Mexico and the Comprehensive and Progressive Agreement on Trans-Pacific Partnership, both of which were signed in
2018. These factors work together to reduce the costs of conducting international trade and make it possible for foreign companies to
compete on a more equal footing with domestic firms.
Very few organizations can now afford to be complacent. An organization that is successful in its local market can suddenly face
competition from halfway around the globe. Consequently, businesses face increasing levels of risk and must always be vigilant about
events taking place worldwide; the recent financial crisis is a good example. Global organizations must also be careful about natural
disasters, such as tsunamis and earthquakes, as well as disasters caused by humans, businesses, or organized groups, such as environmental
disasters, cyber attacks, and terrorist attacks. All such events have severe consequences for businesses and other organizations, including
different levels of government. It is likely that risks will become even more potent as business migrates more and more to the Internet. On
the bright side, however, globalization offers the potential for greater opportunities (e.g., networking possibilities with new business
partners and access to new markets). Similarly, more choices are available to customers: a greater variety of goods and services, of higher
quality, and at a lower price.
What are the implications of globalization? One major implication is that organizations must find new ways of conducting
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business: new strategies, new management practices, and more sophisticated managerial accounting systems. Another implication
is that organizations must conduct their affairs in a responsible manner. We will now discuss each of these implications in greater detail.

Question 6

Lean Business Model?

Answer 6

A business model that focuses on continuous improvement by eliminating waste in an organization.

Question 7

List the 4 types of Lean Business Models?

Answer 7

1. Just-In-Time
2. Total Quality Management
3. Process Reengineering
4. Theory of constraints

Question 8

Just-In-Time?

Answer 8

A production and inventory control system in which materials are purchased and units produced only as needed to meet actual customer demand.

Question 9

Total Quality Management?

Answer 9

An approach to continuous improvement that focuses on customers and using teams of front-line workers to systematically identify and solve problems.

Question 10

Process reengineering?

Answer 10

An approach to improvement that involves completely redesigning business processes in order to eliminate unnecessary steps, reduce errors, and reduce costs.

Question 11

Theory of constraints (TOC)?

Answer 11

A management approach that emphasizes the importance of managing constraints.

Question 12

International Financial Reporting Standards (IFRS)?

Answer 12

Set of globally accepted guidelines to make companies’ financial reports comparable and understandable.

Question 13

Budgets?

Answer 13

Detailed plans for the future, usually expressed in formal quantitative terms.

Question 14

Non-value-added activities?

Answer 14

Activities that consume resources or take time but do not add value for which customers are willing to pay.

Question 15

Benchmarking

Answer 15

A study of organizations that are among the best in the world at performing a particular task.

Question 16

Business process

Answer 16

A series of steps followed to carry out a task in a business.

Question 17

Constraint

Answer 17

A hurdle (or obstacle) that prevents people from getting more of what they want.

Question 18

Control

Answer 18

The process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals.

Question 19

Corporate governance

Answer 19

The system by which an organization is directed and controlled.

Question 20

Deming Wheel

Answer 20

A systematic approach to continuous improvement that applies the scientific method to problem solving (also called the plan-do-check-act (PDCA) cycle).

Question 21

Feedback

Answer 21

A mechanism that signals whether operations (and performance) are on track; usually achieved through reviewing periodic performance reports.

Question 22

Financial accounting

Answer 22

The discipline of accounting concerned with providing information to shareholders, creditors, and others outside the organization.

Question 23

Managerial accounting

Answer 23

The discipline of accounting concerned with providing information to managers for use in planning, directing and motivating, and controlling within the organization.

Question 24

Performance Report

Answer 24

A detailed report comparing budgeted results with actual results.

Question 25

Sarbanes-Oxley Act

Answer 25

U.S. legislation of 2002 that was intended to protect the interests of those who invest in publicly traded companies by improving reliability and accuracy of corporate financial reports and disclosures.

Question 26

Segments

Answer 26

Parts of an organization that can be evaluated independently of other parts and about which the manager seeks financial data. Examples are a product line, a sales territory, a division, or a department.

Question 27

Zero defects

Answer 27

A policy of striving for no defects or as few as possible.

Question 28

Manager

Answer 28

A manager is responsible for accomplishing the organizations goals and does so by managing the efforts of the organizations people.

Question 29

Strategic plan

Answer 29

The company’s plan for how It will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage.

Question 30

Human capital

Answer 30

Human capital is the knowledge, education, training, skills, and expertise of an organization’s workforce.