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1- Case Summary 7.4 The Elements of Supply Chain Management Supply Chain Management (SCM), is the key functionality to ensure profitability and performance in a successful company. It unites operational and technical skills from both, inside and outside the company. It is the overall flow of goods and services, movement and storage of raw materials, WIP and finished good materials from point of origin, to point of consumption. For a company to gain a competitive advantage in their target market, they need to ensure the overall supply chain and value chain are aligned. The primary steps to achieve a strong value chain are the following six activities, 1. Purchased Supplies 2. Inbound Logistics, 3. Operations, 4. Outbound Logistics, 5. Sales and Marketing, 6. Service and Profit Margin. Supplier segmentation and management is a key part to allow a thriving cost effective company. In this case study, Tom Albright and Stan Davis discuss the impact of Supply Chain Management, Supplier Relations and Operational Functionality on Mercedes- Benz. In the case study, Tom Albright and Stan Davis took a deep dive into Mercedes- Benz in the 1990’s. In 1993, Mercedes- Benz struggled with product development, cost efficiency, material purchasing and adapting to the changing market. Mercedes- Benz knew they needed to do something to become favorable to the marketplace. They came out with the idea of the Mercedes- Benz M-Class Sports Utility Vehicle. Mercedes-Benz used function or think groups to come up with concepts and ideas to launch the new M-Class vehicle. They used representatives from all areas of business to get a vast base of information, which included business groups such as Marketing, Purchasing and Controlling. Mercedes-Benz also utilized their vendor force to initial productization to get initial concerns and ideas when creating the design and production of the new vehicle. The first topic we will approach is Supplier Relationships. Companies who practice a successful Supply Chain Management, begin with strategic relationships with a select core supplier force. Many people believe a success supplier relationship relies on low supplier quotes to achieve business, which isn’t true. To achieve a successful supplier relationship, the relationship needs to excel and function on the following key term. Supplier alliances. In a Supplier Reliance, a company and supplier needs to ensure that both sides of the party are benefiting from the business. On a buyer side, it is not only cost-efficient pricing, it is operational and logistically efficient. As stated, low-costing is not always what results in the winning bid, it is the combination of quality, superior service, smaller frequent deliveries and reliability, which allows the company to become an allied force. To become an allied supplier, the relationship takes patience and at times can be very difficult to maneuver. These types of relationships have NonDisclosure agreements and Non-Competes to ensure the information that is provided in discussions are held and to be used only for the party it is being addressed too. The four practices to foster Strategic Supplier Relationships are the following, “PowerBalancing, Co-dependency, Target Costing and Personal Ties”. A Power-Balanced relationship results when the buying company represents a large balance of the supplier’s business. This type of relationship usually results in the supplier doing as much or more as the buying company wants to ensure to keep the buyers business. Such extras that the supplier might do is, low pricing and free shipping on packaging to ensure the order. Co-dependency, is a key strategic function that allows the buyer to gain sustainable resources from the supplier. This can be, R&D and overall new project commercialization projects. This results in single-source relationships as well as strategic relationships with future technological advances on current raw materials or finished goods. Target Costing, which can be broken down into three different parts. Price-based targeting, Cost-based targeting, and Value-based targeting. Priced- based target costing is the negotiating tactic that allows companies to set “targets” to reach to gain the business. Cost- based target costing is the understanding of the costing and details of the bid. Value-based target costing is the approach to compare “want” and cost. Mercedes- Benz used target costing on the implementation of the M-Class Sports Utility vehicle, by utilizing indexes and categorical information such as, safety, comfort and styling. Finally, Personal Ties. Personal Ties is when a buyer and supplier join to allow a seamless working relationship. The second topic we will approach is Supplier Involvement in JIT and TQM. “JIT”, Just-InTime, is essential in Supply Chain Management. Just-In-Time advocates to cut costs by reducing the amount of goods and materials a company holds in stock and delivers finished good materials once produced to be sold to the market. This allows a company to benefit in less rework, waste and warehouse space. Mercedes- Benz designed its manufacturing facility to follow this process through EDI technology. Once an order is received by EDI transmission, suppliers are notified to deliver certain key products at a determined time to ensure its spot in the manufacturing process is up. This allows materials to enter and be used without time lost, as well as no warehouse space being wasted. “TQM”, Total Quality Management. Total Quality Management is important to ensure a manufacturing process is working efficiently. This allows a company to ensure all performance measures for production have no quality issues due to the specifications provided to the supplier based off the buyer’s acceptable performance measures. These relationships result in long-term contracts to ensure all quality and performance measures are documented and agreed upon by both parties. The last approaches are Outsourcing Logistics Based Supply Chain Management and VMI/SCM Software. Outsourcing is an effective way to minimize on-site production, reduce internal costs and utilize outside suppliers for their space and capabilities. Mercedes-Benz outsourced the product of the M-Class vehicle to suppliers to complete their Finished Good Vehicle, both First Tier and Second Tier Suppliers. First Tier Suppliers, provide finished modules to Mercedes directly, Second Tier Suppliers, are the vendors in which First Tier suppliers purchase parts. This has allowed Mercedes-Benz to lower internal costs, by eliminating manufacturing costs and warehouse costs, by implementing outsourcing into their model. LCSM, allows the material flow from supplier to manufacturer or manufacturer to customer seamlessly including transportation, inventory and information. Hewitt- Packard, uses benchmarking to work with their LCSM planning, by the following, suppliers, manufacturing, customers. HP, uses on-time performance, average days or hours late, repair time, greater levels of order variation and safety stock to ensure a greater LCSM. “VMI,” Vendor-managed inventory business model which the buyer of a product information to a supplier. The supplier takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer's consumable location. VMI allows a company to reduce order to delivery time due to the order being electronically transmitted. This allows the company to have a competitive advantage due to the decrease in timing. Relationship to Work Experience Working in a consumer goods company and having vast experience in purchasing has shown me, if a company wants to be successful the first thing they need to do is to ensure they have a Strategic Supply Chain Management. To have a strategic Supply Chain Management, a company needs to be aligned in best practices and to ensure to have all stakeholders in all departments that are directly and indirectly involved part of all initial discussions. Businesses who want to broaden their Supply Chain Management need to first align their company by implementing a SCM Software, such as SAP. SAP is a global ERP company that specializes in integrating business processes, such as accounting, sales, production, and purchasing. This would be the first step a company needs to achieve before reaching other valueadded processes such as VMI, LMSC, and Supplier Segmentation. SAP would roll up the information in one place, to ensure the planner would have vast information to move forward to implement further change. Working with many companies who utilize this system, has allowed me to understand an overall picture of how a company functions operationally. Another area, I would focus in on that I can relate to my work experience is Supplier Segmentation. As a Purchasing Manager for a Consumer Good’s company having a strategic vendor force has allowed me to get out of Force Majeure issues this year due to Hurricane Harvey, as well as ensure production is constant. Relationship to Course The managerial accounting course covers supply chain management and costing. SCM and Managerial Accounting work hand and hand. I believe the entire course involves the use of SCM, in which I will discuss some key areas. In Chapter 1, Plan- Implement-Control Cycle, shows how a company functions on a management level. This can relate to SCM, due to the fact in order to have a successful SCM there needs to be a plan in order to attack the goal. In Chapter 2, Flow of Manufacturing Costs in Job Order Costing, goes over raw materials inventory, WIP inventory, Finished Good Inventory and actions needed in each step, which is part of SCM. Each cost is recorded in these inventory accounts as assets until the job is sold. Once the job is sold, it is transferred into COGS, where it is matched up in sales revenue and income statement. In Chapter 4, Variable Costs are discussed. In SCM, raw materials are part of variable costs, due to production size and need. Summary In conclusion, Supply Chain Management (SCM), is the key functionality to ensure profitability and performance in a successful company. To ensure a business succeeds a company needs to ensure their Supply Chain Management is aligned with all stakeholders in their company. Having a Strategic Supplier Force, allows not only the best prices, it allows the best quality, standards and delivery times (LCSM). Lastly, not only is it important to have a vast Supply Chain Management, it is also important to have the completely integrated business. A ERP System could be costly, but by implementing a software system to allow the integration and communication to occur allows SCM to shine and provide an overall outlook for a company. 2- Summary of Case 9.3 Creating an Ethical Culture The case is written by David Gebler and discusses how companies can create an ethical culture by implementing values-based ethics programs to help employees judge right from wrong. Over the years many companies have made the news because they have committed criminal activities. One of the largest fraud cases in history was committed by WorldCom managers who are now serving time in prison. There is no doubt that these companies acted criminally and unethically. However, it is critical to take a closer look at the people involved to understand how this could happen. After the exposure of the WorldCom fraud, several executives made public statements such as “Faced with a decision that required strong moral courage, I took the easy way out….There are no words to describe my shame.” -Buford Yates, director of general accounting at WorldCom. Statements such as these come from good people gone bad. One individual who drew a lot of attention was the the senior manager of the accounting department, Betty Vinson. Her department booked billions of dollars in false expenses and ultimately led to Vinson being sentenced to five years in prison and five months in house arrest. Although Vinson was among the lowest-ranking members in the scandal, she could likely have stopped the conspiracy had she refused to book the expenses. Most people involved in the WorldCom fraud did not start out as criminals seeking to commit fraud. Scott Sullivan, CFO at WorldCom, was a highly respected individual known for his integrity. This raises the question, how does a person say “no” to a respectable CFO if asked to do something questionable? Increasing pressure on managers to constantly meet goals is a leading cause. Companies need to examine their own culture and if it is promoting or discouraging ethical behavior. Just having a code of ethics and internal controls is not enough to protect companies from corporate fraud. Research by The Ethics Resource Center confirms that although an increase in ethics and compliance programs, observed misconduct has not changed for the better. Building the right culture is key in order to reduce the risk of unethical conduct. Measuring the success of an ethical culture is made by making significant progress in achieving key ethics and compliance program outcomes. Four key outcomes to the success are: • • • • Reduced misconduct observed by employees, reduced pressure to engage in unethical conduct, increased willingness of employees to report misconduct, and greater satisfaction with organizational response to reports of misconduct. The problem with most compliance programs is that they are dictated by executive management who often measure success by the number of employees completing ethics training, calls to the hotline, etc. Culture is measured differently. By definition, it can only be measured by criteria that reflect the individual values of all employees of the organization. An organization moves toward an ethical culture only if it understands the full range of values and behaviors needed to meet its ethical goals. Organizations must understand the pressure employees are under and how they react to those pressures because it can influence how individuals feel about reporting unethical conduct. To determine if an organization has the capabilities to create an ethical culture, tools such as the Culture Risk Assessment model can be utilized. The model provides a comprehensive framework for measuring cultures by mapping different types of values in a way that determines specific strengths and weaknesses that can be assessed and corrected. The Culture Risk Assessment model consists of the following seven levels: 1. Financial Stability - Pursuit of profit and stability 1. Communication - Relationships that support the organization 1. Systems and Processes - Compliance systems and processes 1. Accountability - Responsibility and initiative 1. Alignment - Shared values guide decision making 1. Social Responsibility - Strategic alliances with external stakeholders 1. Sustainability - Resilience to withstand integrity challenges Levels 1,2, and 3 can be collected into one part called “The Organization’s Basic Needs”. This part examines if the organization supports an environment where employees feel physically and emotionally safe to report unethical behavior and to do the right thing. Level 4 is the second part and can be called “Accountability”. Level 4 focuses on creating an environment that supports employees and managers to take responsibility and initiative. The third and last part is called “Common Good” and includes levels 5, 6, and 7. The “Common Good” looks at if the organization supports values that create a collective sense of belonging where employees feel that they have a stake in the success of the ethics program. After surveying employees, organizations tend to be clustered around three or four levels. Once the organization has a better understanding of its values’ strengths and weaknesses, it can take specific steps to compensate for deficient values. What would have happened to WorldCom if the the organization had a deep understanding of its values and promoted and ethical culture? It is not unlikely that the outcome would have been much less unethical, if communication, openness, and transparency were encouraged. When top management displays ethics-related behavior, other employees are 50 percent less likely to observe misconduct. Perhaps Betty Wilson would have said how she really felt and effectively crushed the WorldCom conspiracy that shocked the business world. Relationship to Work Experience Until just recently I was working for a small real estate development company. In recent years, this company has undergone massive structural changes to adjust to the industry. Prior to the financial crisis in 2007-2008, the company employed approximately one hundred people across multiple departments, operated in several states, and provided a variety of services related to the real estate industry. However, the financial crisis forced the owner to downsize and layoff the most of the employees. Now the company employs seven people only. In my experience the company has been struggling to find its culture. Now, I am not saying that the company or its employees are acting unethically, but the lack of an established ethical culture can cause problems for the sustainability of the company. The company does have an employee handbook, code of conduct, and the usual corporate guidelines and protocols. However, these efforts have not promoted openness and transparency among employees. For some reason the company is still being run in the same manner as it was before downsizing. The biggest problem is the lack of communication - and it starts with the CEO. My opinion is that the extremely high employee turnover these past couple of years is a direct result of not knowing or promoting an ethical company culture. Relationship to Class Material Ethical behavior is critical in every aspect of a business. Every person in an organization should feel comfortable to judge right from wrong, honest from dishonest, and fair from unfair. It is all managers’ responsibility to encourage ethical behavior and the best way to do so is by leading by example. As mentioned in the case, one leading cause for white-collar fraud is pressure to meet performance goals. Budgeting is beneficial for an organization as is looks to the future and addresses potential problems that a manager may face. Budgeting is also used to evaluate performance and motivate and reward employees. However, without an ethical culture in the organization, there is the potential risk that managers will play “budget games” for personal benefit. For example, a manager who has already met the monthly sales goal could try and defer sales to reach next month’s sales goal easier. Summary Creating ethical cultures in business is more important than ever before. Major fraud scandals have shocked the business world and revealed that good people can go bad if companies ignore how the environment influences behavior. The “good old” code of conduct does no longer suffice on its own. Although federal legislations such as the Sarbanes-Oxley Act of 2002, make it easier for people to judge right from wrong, company management must understand that it is the company's values that create ethical cultures. To learn what the company’s values are, tools such as the Culture Risk Assessment model can be utilized. Upon reviewing the results, management can work on improving areas where the company is doing poorly. One of the most effective methods to encourage communication, openness, and transparency is for managers to lead by example in creating an ethical work environment. 3- Summary: Continuous Budgeting at the HON Company Continuous budgeting can be defined as the action of updating a company’s budget quarterly throughout the year, with each updated budget encompassing the following three quarters. In many cases they can be ideal for a company, for they have more control over their net profit and sales by being able to adjust accordingly throughout the year. These budgets should start being made six weeks prior to the start of the new quarter. At HON Industries, one of the largest makers of mid-prices office furniture, they utilize continuous quarterly budgeting throughout their company. HON Industries is composed of nine smaller operating companies, the largest being the HON company, and they produces office furniture ranging from desks and chairs, to storage units and workstations. In this case study, it is discussed what steps the HON Company goes through each quarter to update their budget. The first step in preparing the budget is to develop the sales budget. The sales budget starts with two teams: the sales team, and the marking team. The sales team must pool together their information on previous sales and upcoming demand, while the marketing team must compile a budget based on product types and distribution. These budgets will normally differ, but after analyzing both budgets and some needed compromise, both teams should come to an agreement on their singular sales budget. This step should take about two weeks. The second step is to convert the sales budget into a plant production and shipping schedule. The sales budget should have a list of projected sales, and the plants need to prepare for what is being sold. To continue, the shipping schedule then needs to be put in place to make sure that these sales can be completely executed and shipped to the customers. This step should take one week to complete. Step three is to prepare the cost/expense budgets for the production and distribution, along with sales and general administration. Now that the schedule is in place for the projected sales, it’s now time to calculate what the cost will be to manufacture these products. It must be factored in the cost of materials to make these products, and if there is any change from previous quarters. There will be multiple budgets from all of the departments: research and development, SG&A, customer service, production, and distribution. It should also take one week to complete this step. In step four it is time to consolidate all of these budgets into one master budget. The company’s accounting group will look over the budget and check for any major errors. The budget also has to comply with the company’s strategic plan. It should take one week to complete this part. The final step is to prepare the budget to be presented to the parent company, in this case HON Industries. The company must put together numerous financial statements, such as budgeted return on assets employed, major tooling expenditures, an analysis of prices to net sales, and more. These statements, along with the budget, are then send to the parent company. This should take top executives about a week to create. If the parent company approves, then business can continue as usual. If the parent company comes back with concerns, the top executives then have another week to update the budget where needed. By budgeting continuously, this allows for the HON Company to update their budget due to seasonal effects. This allows them to adjust for a predicted decrease in sales, or an impromptu influx in sales due to a large order. Furthermore, continuous budgeting involves all aspects of the company so that way every department has the opportunity to bring their concerns and needs to the table. In the end, this gives them more control over their sales and inventory, along with net profit. Relation to Work Experience: Continuous budgeting is almost always done at companies, but maybe not to the full extent that it is truly required. I work at a small independent record label, and most of our work is outsources to other companies. We have partners that press our vinyl records, create our CD’s, make the artwork for albums, help with digital marketing, and distribute our records both physically and digitally. We typically work on a timeline that extends 6 months to a year in the future, focusing mostly in the upcoming 3-4 months. Because we rely on so many outside sources for our company to function, we have to be flexible to ensure that our artist’s music will be able to be released. We also have to be ready to adjust our schedule if something else comes up. We have numerous artists who have moved on to larger labels, but we still hold the rights to their early catalog. We are responsible for producing the physical records for those albums. Since the artists are no longer on our label, we do not know when their next record is coming out (for the most part). Once we get word that they have a new project to come out, we then have to switch our physical production schedule around to make sure that we have plenty of their back catalog on hand. So that way if their new record is a hit, we will have enough stock to cover future purchases from new fans. This can be even more straining because of the limited amount of vinyl pressing plants there are available for us to use. We may have to push a future record back to make room for the production of another artist’s record. If we feel that we will have more sales from the production of a back catalog record than we would of a new record, we will more than likely push the new record back. Another way we have to continuously update our budget is for the intake of a new artist. We are constantly on the search for new artists, but we don’t have a strict schedule in which we abide to – we will only sign an artist if we see prominent potential in them. This being said, if we do find an artist, we have to be able to adjust our budget for the influx in expenses we will accrue. These expenses will range from paying for studio time, music video directors, tour support, and of course, paying for the production of records upfront. We must have a large enough budget for production costs to cover for a new artist/record. Relation to Course Material: In the past few weeks we have been focusing on budgeting in class. Managers must be able to predict the future cost of running the business, ranging from fixed costs like rent and utilizes, to variable costs like material costs and commissions. By utilizing a continuous budget, companies are able to have the most ideal control over their money during the year. If a company was to run on a yearly budget, then if something happened in May that throws off the whole budget, they will be unable to adjust to fix the problem. By using a continuous quarterly budget, the company will be able to adjust accordingly and fix the problem before the fiscal year ends. Quarterly budgeting also allows for adjustments for temporary changes, such as an increase in prices of raw materials, or a decrease in sales. Summary: The Young Reader case study explores the ideal of continuous budgeting in a very strict and ridged format, which I would assume works ideally in large businesses and corporations. As someone who works for a small business, I see how continuous budgeting works on a smaller, less ridged scale. Quarterly budgeting allows for a company to stay up to date on their expenses and projected sales, so that way they can end the year with their ideal net profit. It also gives companies the ability to be flexible with their yearly plans, and adjust as they go along. While all companies and businesses should use a budget, I believe that no matter the size they should be implementing a continuous quarterly budget. 4- Distinguishing Between Direct and Indirect Cost Is Crucial for Internet Companies Case Summary In the article, the author explains the accurate way of allocating costs to Internet-based companies. For a company, cost management is very important because it facilitates in determining the profitability. It is very important for Internet-based companies to differentiate between the direct and indirect cost. However, numerous people have disagreed to this by saying that it is no longer a valid way of looking at costs for a company in an E-commerce environment with intangible assets. The author's goal is to persuade that to assess the profitability analysis, product-line decisions and pricing decisions are still significantly affected by the way costs are classified. Direct cost is easily traceable whereas an indirect cost needs an allocation scheme to be traced. A central element of cost management is the proper allocation of its costs to various products and services. Therefore the way costs are allocated plays an important role in influencing the profitability of individual good or service. Cost is being measured as a function of cost objective. In the traditional view, products and services in the departments serve as a key cost objective. The cost of materials and labor are easily traced therefore making them perfect examples of direct costs. Contrary to that the depreciating machinery, utilities, and insurance are considered as indirect costs. As products are the cost objects in manufacturing companies, service is a cost object in service industries. Tangible products are rational choices for the primary cost objectives in most manufacturing firms. Whereas services are rational choices for primary cost objectives in other firms. There will be an increase in the significance of intangible assets. For example, in the banking industries direct and indirect cost are directly related to the particular service such as processing a loan. There is a remarkable change in the E-commerce companies over the past 5 years and it changed in a way companies interact with their suppliers as well as customers. Many companies generate revenues via the internet and we refer these companies as Internet-based companies. Despite the fact that the basic nature of doing business has changed for a large section of our market, the primary character of cost management has not changed. Profitability analysis, product line decisions and pricing decisions are still affected by the way, the costs are being classified as direct and indirect. Due to the growth of the internet, there are changes in many aspects of commerce. A number of firms are now emerging for the concept of sales over the internet. In this scenario, it is really important to understand the impact of these changes on corporate cost management system. In E-commerce transaction with customers are handled electronically. It gives innovative ways to interact with the customer. Ecommerce companies should view customers as well as products services as the key cost objectives. Most internet based firms can be classified into four types of business models: Business to Business, Business to Customer, Business to Government and Customer to Customer. B2B (business to business) and B2C (business to customers) trade where companies sell their products and services online either to other firms or directly to the customer. Thus all the costs are a significant part of the online business. Another type of business is customers to customers (for example E bay) which creates revenue through the commission. The B2G business directly deals with the government. Among athe four business models the B2B creates the most revenue. Low switching cost and low cost of information have created the situation in which companies continuously adjust/change prices and try to attract and track other future customers. User-friendly, secure and hassle-free experience should be there for customers in order to retain them. Companies that are going to be competitive should devote their time on resources to attract customers through advertising on the internet or traditional media. For Internet-based firm direct cost is the cost of the product a customer buys, the manufacturing cost of products are intermediate cost objective. It may be even possible to trace software related cost to specific customers in an Ecommerce environment and thereby treating directly in terms of the customer. The cost that cannot be directly traced for example computer hardware is treated as an indirect cost in the internet-based firm. Effective customer profitability, pricing decision, and marketing decision will be achieved if customers are treated as cost objective. Focusing needs and desirability of the customer is fundamental objective for the internet-based firm and they need to adopt customer focus. The Internet-based firm should also consider other cost objectives in differentiating between direct and indirect cost. Relationship of Case to Work Experience Back in my country, my father is an industrialist and I gained my work experience from his guidance. I was an administrative manager and I personally feel that distinguishing between direct and indirect cost is essential. In our engineering based industry of powder coating, we buy electromagnetic powder from the supplier. The electromagnetic powder can be treated as a direct cost to my company and indirect costs could be utilities and rent. Our main cost objective was to trace down direct and indirect cost and proper allocation of the cost because it helps us to gain profitability. The nature of the firm is B2B, so to satisfy the other firm requirements we need to continuously maintain the quality standards to remain in the business. Quality inspection is also considered as a direct cost. Relation of case to Material Covered In chapter 1 we studied about direct and indirect cost. We also solved an example of differentiation in direct and indirect cost. We went through the example of California Pizza Kitchen, which talks about a manager trying to determine the cost of serving a specific customer. Cost object, are costs such as rent and supervision is considered as an indirect cost and if the manager is to determine the cost of operating a specific restaurant, then the cost of rent and utilities will be considered as a direct cost. The same thing applies to the internet-based companies. If they consider the customer as a cost objective, then to attract more customers they need to make more advertisement through the internet and the advertising cost will be considered as a direct cost. Manufacturing cost will be considered as an intermediate cost to internet-based companies. Summary In the current economy, it is important to imply the information we know in the field of management accounting. Direct and indirect costs are one kind of implication. This implication of managerial accounting will help to identify the cost objective and distinguish between the direct and indirect cost which in return would help to gain profitability. In today’s world, most of the companies are earning online. The attention to the customer is the primary focus for any company selling its product online. What are the customer's interests, which section of the site are most customers visiting, what are their key areas while picking up the product etc, are some issues where companies need to invest their money in, in order to increase the online sale. Thus, such costs can’t be ignored and contribute in one of the major costs. Apart from this, slashing prices to compete with the competitors and making festive sales also contribute to its cost. Thus, in a nutshell, apart from focusing on their direct costs, these costs should also be treated as a direct cost to the online business and they must be taken care of accordingly. 5- Case #8.4- “The Business of Making Money with Movies” by S. Mark Young, James J. Gong, and Wim A. Van der Stede. Summary of the Young Reader Case The article “The Business of Making Money with Movies” provides chronological information about how the movie industry has adapted to new technological changes over the past decades, while continually changing its revenue generating models and boosting its revenue streams along the way. Making a movie involves six stages: development, pre-production, production, post-production, marketing and distribution, and exhibition. In the early 70s, the main source of revenues for studios came from theatrical release, international sales and network television until the innovation of the first home video system. This system provided new opportunities for studios to generate more revenues. Today the viewing options for consumers and the revenue streams for studios have increased significantly through the adoption of new technologies. Notwithstanding, theatrical release still remains the most important factor of success in the movie industry. The opening box office performance is also a critical indictor of a film’s success. According to boxofficemojo.com, the overall box office performance was $10.6 billion in 2009. This was the first time ever the domestic box office exceeded $10 billion. This was due to the following critical factors affecting the theatre-going experience. Firstly, the studios were under enormous pressure to create blockbusters movies but overtime the percentage of people who actually go to a movie theater declined due to the variety of entertainment options such as video games, music, movies, television and user generated content on social network sites available both online and mobile devices. Today people prefer to watch movies in locations other than a theater because of high movies tickets, boring commercial, rude behavior of other audience and dirty theaters. Secondly, the large increase in ticket prices affected box office revenue. Today movie ticket price average cost ranges from $11 on a weekday to $13 on weekends compared to the prices of past years. As a result of this many people wait to see a film on DVD or on pay-per-view in the comfort of their own homes. Thirdly, movie piracy especially the illegal downloads from the internet affected revenue. Piracystill remains one of the greatest loss of revenue for the box office. The article suggests various sources of revenue streams by assessing different modelsin the entertainment industry. The main goal of the entertainment industry is to develop content that can be distributed through as many channels as possible in other to generate revenue. Outside theater releases, the major sources of revenue in the movie industry comes from home video, network, satellite and cable television, international distribution, internet and mobile devices. Over the years, the development of home video has been a great source of revenue in the film industry. Major studios earned more revenue in the domestic home video market through sales and rentals than they did from theatrical release. These sources of revenue of home video were achieved through television viewing, video/DVD, pay-perview (PPV), premium pay channels such as HBO, Showtime and Starz, network and cable TV, and syndicated TV. The international box office accounts for less than half of the major studios total income from theatrical markets over the years. The international market for U.S. films continues to grow rapidly. According to the article, the largest foreign consumers of films are those from the U.K., Japan, Germany, France, Spain, and Australia/New Zealand. These international markets generated $18 billion in revenue to the U.S. studios. Also, television licensing is highly profitable overseas. The overseas nontheatrical market grew over the years making the home video market a large source of overseas revenue for Hollywood studios than the overseas theatrical market. It is predicted that by 2011 overseas revenue from U.S. movies will increase to $41.6 billion. The article suggests that technological innovation in the coming years will lead to the most significant revenue yet to come. We can see evidence of this today from the ubiquitous use of hand held devices and the internet. This leads to the proliferation of downloaded movies on smart phones. The film industry is trying to determine a new revenue-generating model to exploit the Internet as a new revenue source but their greatest concern is copyright. There lies this fear that once a movie is released online they lose control over its distribution. As such the studios are working to build a copyprotection technology to maintain control over online content. Today, consumers already can download films directly to their hand held devices such as Ipads, and other mobile devices. Movie downloads potentially offer a significant source of revenue for the studios if they can put in place the right business model. Although hard to predict, it is estimated that over the next couple of years, internet movie downloads in the U.S. will generate $1.3 billion in revenue. In summary, we can see how the movie industry has adapted to recent technology in a bid to increase revenue streams. Firms and industries generate revenue by developing, selling and reselling the same content using different platforms in different markets.Motion pictures are just one of the information industries in which value is created through knowledge and intellectual property. The article is of the opinion that understanding and managing lifecycle costs and revenues can help create value to exploit these intellectual property. Relationship of the case to my work experience I currently work at Realogy (real estate and relocation services). At Realogy, we are deeply committed to embedding innovation and technology throughout our business practices. This is most evident in the services and solutions we provide to our affiliated agents and brokers. Each year, Realogy hand selects a group of companies to present their emerging technology products to an invitation-only audience of Realogy executives and franchisees where ideas are shared and connections are made. In 2016, Realogy announced the formation of ZapLabs as the company’s innovation and technology hub. ZapLabs focuses on accelerating change within the real estate industry. Zap keeps real estate sales agents and consumers connected throughout the transaction journey. It helps homebuyers and sellers connect with a real estate expert who is prepared to meet their needs, every step of the way. It also helps our affiliated real estate sales agents and brokers stay in sync with their customers, grow their businesses, and thrive in today’s real estate industry. This contributed to the $5.81 billion in revenue earned by realogy in 2016. Over the past years, real estate and its business models have already been substantially influenced by online market developments. New technologies such as the internet and its infrastructure have introduced disruptive competition to the traditional regional/local market by changing conventional supply-and-demand patterns. Technology has made it easy to forget face to face meetings. Today, virtually everything is done online. You can view real estate listings online at the comfort of your house and also have access to the sales agents through one on one chat or phone call. Relationship of the case to material covered in class Managerial accounting gives us more insight into a company by looking at different line items in various financial statement. The Income statement is a very important report because it contains the line item called revenue/sales which is the lifeblood of every surviving company. The income statement contains revenue earned and expenses incurred by a company during a reporting period. It also shows how economic resources are used to generate earnings. The income statement is used by management within the company but also by investors and creditors outside the company to evaluate profitability, performance and risk assessment. The young reader’s case primarily focuses on how revenue is being generated by adapting to technological changes. Revenue is generated by the effective use of assets in the company. Under the accrual basis of accounting, revenue is usually recognized when you transfer the risk of ownership of goods and services to the customer. Under the cash basis of accounting, revenue is recognized when cash is received from the customer following its receipt of goods and services. Revenue also known as topline is the starting line item in the income statement. This has a very significant function because revenues drive every other line item in an income statement. A variety of expenses related to the cost of goods sold and selling, general and administrative expenses are then subtracted from revenue to arrive at the earnings of a business. The book, in different chapters, references the income statement. In chapter 5, under the contribution margin approach the book mentions a new type of income statement called the contribution margin income statement. This is based on cost behavior, or whether cost is variable or fixed. The contribution margin represents the amount of profit remaining after only variable costs have been deducted from sales revenue. The contribution margin income statement is not used for external reporting rather it provides a tool for managers to use for “what-if” analysis or to analyze what will happen to profit if something changes. Furthermore, chapter 13 discusses about managerial responsibility in regards to how revenue is being generated. The manager of a revenue center is responsible for generating revenue. Also, companies often give revenue center managers sales targets and then evaluate or reward them based on whether they meet those targets. Summary The way businesses are being transacted within the real estate industry is rapidly evolving based on new technology being invented and refined. The advent of the internet along with cellular and mobile technology being available almost everywhere means that people are no longer tied to their offices. Listing sites have become more technologically advanced that people can send and receive information listings 24/7. By using technology, brokers and agents have become more proactive in anticipating client’s needs. They are able to this by staying on top of industry trends. I believe that in the future, we’ll see more interactive sites which would enable prospective home buyers make instant listing payments online. This will free up time for real estate agents to focus more on emerging customers’ needs as this is primed to be the pivotal revenue-generating activity for the real estate industry going forward. 6- Measuring the Strategic Readiness of Intangible Assets Case Summary: The value of intangible assets should be regarded as just as important as the value of tangible assets. It is common for companies to measure their accounts receivable, accounts payable, and capital in an effort to gauge their financial standing. What most do not consider is the importance of measuring the intangible assets that also contribute to their overall success and promise of longevity. These variables present themselves in the form of human capital, information capital, and organizational capital, all of which indirectly effect financial performance. This makes it all the more important for manager’s to consider, as these influences are complexly imbedded in company culture, the skills and talent of employees, and employee’s ability to share knowledge. Measuring these various variables is incredibly significant in the manager’s ability to manage the company’s competitive position with greater ease and accuracy. Measuring the strategic readiness of intangible assets contributes to the company’s Total Quality Management and Six Sigma efforts. That is, it assists companies in achieving the satisfaction and loyalty of both consumers and employees. It offers insight into the most effective way to properly train and motivate employees to pursue corporate goals and initiatives. It also provides a more in depth perception of how closely aligned the company’s assets are to the corporate strategy. It is only when these assets are a direct reflection of the company strategy that the company will benefit from value added. These assets are divided by, as mentioned, categories which include human capital, information capital, and organization capital. Human capital is comprised of, “…the skills, talent, and knowledge that a company’s employees possess”. Information capital includes, “… the company’s databases, information systems, networks, and technology infrastructure”. Lastly, organizational capital is comprised of, “… the company’s culture, its leadership, how aligned its people are with its strategic goals, and employees’ ability to share knowledge”. It is integral that managers assess each of these categories, without neglecting any individual one, in order to obtain a holistic perspective of the strategic readiness of all intangible assets. The tools used to assess this include employee surveys, Strategy Maps, and Readiness Reports for each individual category. While employee surveys offer insight to develop the maps and reports necessary to assess intangible asset readiness, the Strategy Map, specifically, analyzes the relationship between four interrelated perspectives which include the financial, customer, learning and growth, and internal process perspectives. The Readiness Reports for each individual category are specialized, accordingly, and compare actual measures to company expectations and standards. For example, the Human Capital Readiness Report assesses strategic processes, strategic job families, and competency profiles of the company. In contrast, the Information Capital Readiness Report assesses strategic processes, strategic job families, transformational applications, analytical applications, transactional applications, and the technology infrastructure of the company. Lastly, the Organization Capital Report analyzes the culture, leadership, alignment, and teamwork attributes of the company. Considering each category, with proper evaluation of the individual variables which influence them, managers will be able to better understand the value of their intangible assets and where they should allocate more of their efforts for improvement. For example, the Organization Capital Readiness Report might provide insight about how the company should allocate more attention towards improving organizational behavior and policies. In summation, this data helps to measure the alignment of intangible assets as compared to the company’s strategy, which helps to secure a sustainable competitive advantage that is equally as valuable as an impressive balance sheet or income statement. Relationship of Case to Work Experience: In regards to personal work experience, I have seen recent efforts, focused on the same initiatives as those presented in the case, as a Product Development Intern at Movado Group Inc. More specifically, I have seen funds and resources allocated towards all of the variables which help to ensure the strategic readiness of intangible assets including human capital, information capital, and organization capital. In regards to human capital, the department that I am involved in has specifically identified 4 strategic job families which include Product Development Coordinators, Product Development Managers, Product Development Directors, and Designers. The role and responsibilities of each of these positions vary but our department relies heavily on the cohesive participation of each of these individuals to guarantee the success of this business function. Generally, their competency profile requires them to have general knowledge of operations management and innovation. There is, of course, more emphasis on certain competency areas as it pertains to the responsibilities of specific positions. For example, Designers are required to have a little less knowledge of operations management as compared to Product Development Coordinators who communicate with suppliers and manufacturers, overseas, to test products and inquire about minimum order quantities and pricing. Designers, in contrast, are required, by the nature of the job, to have more knowledge about innovation. Their greatest asset is their creative abilities which are not as necessary for Product Development Coordinators. Additionally, Movado Group Inc. (MGI) also utilizes quarterly 360-degree feedback surveys to assess the performance of supervisors, peers, and subordinates. This is an integral component of analyzing the strength and weaknesses of the human capital component of the department and overall company. In regards to information capital readiness, MGI has placed great importance on the initiatives related to this area. For example, there is an entire team of IT technicians who are continuously auditing the processes and software programs used by the company. One recent development was the implementation of SAP. There was a year-long effort where the IT and Human Resources department collaborated in an effort to ease the transition of employees from the antiquated systems, that were previously used, to the more advanced and modern SAP system. Additionally, there are analytic applications in place which grant Product Development Coordinators the ability to share information and knowledge. Specifically, these applications detail the matrixes of every season watch collections for every brand including the projected cost of production, actual costs, projected retail price, actual retail price, and SKU numbers. In addition to the SAP system, there is also a private database, which is available to all employees, that includes photos and important details of the various raw materials that are kept in our raw materials studio. The combination of these two applications supports the company’s initiative focused on information capital readiness. Moreover, the security precautions, training, and awareness e-mails that are available to every employee, by the IT department, also help to support the security function of information capital. Perhaps the strongest of all of MGI’s intangible assets is their organizational capital. The company culture is almost palpable and is strongly infused in their everyday activities. The history of the business, founded on innovation and entrepreneurship, is strongly communicated in their vision and mission statements. In fact, the company details their vision and mission statements, and company culture in their “Casita”. This is a diagram, which resembles a small house, hence the name “Casita” which translates to “small house” in Spanish. There are two versions of this Casita. One of which focuses on corporate goals and one of which focuses on value chain goals. Both versions begin by detailing the mission and vision statement of the coming year followed by corporate themes, priorities, and ending with the overall Mandate Priorities. It is obvious that there is an alignment, within the company, of their departmental goals and incentives as is evident by the continuous teamwork that can be witnessed within each department. The private library database is often visited by individuals from every department. Specifically, in relation to the department where I am located, Designers, Product Development Coordinators, Product Development Managers, and Product Development Directors, alike, refer to the content listed there in order to share materials. For example, if a brand discovers a cheaper supplier, who is able to manufacture a complex movement that is cheaper than previous suppliers, this information is automatically available to all of the licensed brands within the company. Product Development Directors are continuously encouraging the coordinators and Designers to consider risks and work with an entrepreneurship mindset. This knowledge management system is, perhaps, the most used tool in my department as it provides the integral information that coordinators and Designers need to operate more efficiently and effectively. In the past, Directors, Designers, and Coordinators would withhold information from other licensed brands because they were prideful of their discoveries and innovations and did not understand the benefit of sharing information. With the implementation of this system, teamwork has strengthened, ever since. The integration of training programs, executive talks, company intranets, and bulletin boards help to foster this collaboration among employees and the Casita, most definitely, helps to reinforce it. As the case suggests, “No asset has greater potential for an organization than the collective knowledge possessed by all its employees”. GRAPHIC OMITTED (CANVAS DOES NOT SUPPORT IT) Relationship of the Case to Class Materials: The strategic readiness of intangible assets relates well to the topics discussed in Chapter 10, Decentralized Performance Evaluation. More specifically, the concept of fostering teamwork and open communication as components of organization capital readiness aligns well with the notion of decentralization. Decentralization refers to forwarding decision making down to lower-level managers. An advantage of decentralization is that it recognizes that lower-level managers may have more knowledge about their area of responsibility and can make quicker and more informed decisions. This is exactly what the implementation of information systems is intended to create. With the access of this knowledge, available to all employees, lower-level managers are able to gain the insight necessary to make these informed decisions. As mentioned in class, this also helps to foster the development of managerial expertise. With strong human capital, information capital, and organization capital, decentralization will help to make managers confident in lower-level management’s ability to make good decisions. This relieves them of focusing on day-to-day details and, instead, allows them to focus more on strategic issues. The Balanced Scorecard presented in class also aligns with the company’s efforts to ensure the strategic readiness of intangible assets as it measures the value creation through the financial, customer, internal business processes, and learning and growth perspectives, as mentioned earlier. These components can also be seen in the Casita that was developed by the Product Development department of the company where I am currently employed. These measurements also help in developing a statement of cash flows, specifically in regards to the indirect method, as managers must account for intangible assets. This also applies to the development of cash flow statements from investing activities where managers must also account for intangible assets. This begins to introduce the material learned in Chapter 12, Statement of Cash Flows. In this case, intangible assets have an influence on whether or not the company’s performance will result in a positive or negative cash flow. As mentioned in class, it is more favorable, generally speaking, when there are negative cash flows in the investing activities section. Companies must be cautious, however, when there is a positive total cash flow in the investing activities section. Of course this is a general assumption. Managers must still consider other methods of measuring cash flows to confidently determine the status of the company’s performance. Overall Summary: In summation, the strategic readiness of intangible assets is just as integral to the success and longevity of a business as is an impressive income statement or balance sheet. In fact, I would argue that there should be greater emphasis placed on this assessment method because it measures the variables of success that have been previously considered immeasurable. Although a company could not survive without the support of finances and accounting efforts, it would also fail to survive without the strength of its intangible assets. Specifically, it would fail to survive without human, information, and organization capital. The purpose of measuring the readiness of these assets is to gauge whether or not they are accurately aligned with the company’s strategy. In order to effectively deliver a strategy, companies must ensure that their information systems, networks, technology infrastructure, company culture, leadership, skills, talent, and knowledge of employees all support the same vision. It is important that companies consider utilizing employee surveys, Strategy Maps, and Readiness Reports of every category in order to gain a true understanding of the readiness of their intangible assets. I appreciate that companies are allocating more time in understanding the influence that these assets can have on company performance as it is very easy to overlook. These methods of assessing intangible assets are also considerably useful as they incorporate the opinions of employees. Most of all, however, the results can assist managers in better implementing Total Quality Management and Six Sigma efforts. It is important that managers recognize the value of strong financial statements as well as the value that well aligned intangible assets provide. After all, the infrastructure, people, and company culture are the foundation of a business. A strong balance sheet only serves to support it. 7- Case: The Business of Making Movies Case summary Motion pictures continue to play an essential role in the ever-changing entertainment industry. In this case, the authors discussed the processes involved with favorable distribution and marketing of a film on accounting. By analyzing production, marketing cost and revenue data on more than 2,000 movies, the article explored the key factors that contributed to a box-office success. In the motion picture industry, before a film gets into theatres and seen by audiences, there are three key stages in the value chain for theatrical motion pictures—production, distribution, and exhibition. Young et al. also focused on these three sections and examined the impact of each part on the box office. Firstly, marketing is universally considered to be the key factor that leads to box-office success. A movie's marketing budget was found as high as 50% of its total production cost for blockbuster films, which mostly comes from advertising on television, print, radio, and outdoor billboards. The related attempts to generate a buzz for the movie before release account for the remaining part of the budget. Viral marketing via social network, email, and other electronic media campaigns to promote new films is also a critical sector of marketing. Licensing is especially vital for the marketing of movies in theatres take for example the McDonald's and Walt Disney Company licensing relationship which lasted over 10 years and was extremely profitable for both parties. Secondly, distribution is the indispensable process of getting the film viewed by an audience. This is usually the task of a professional film distributor, who could be an independent company or a subsidiary of a major studio. Distributors play a role as a negotiator between the film-production company and the exhibitors, and has a set of tasks and responsibilities. They need to arrange industry screenings to make the exhibitor believe they will get financial profit and contracts with exhibitors on the split of the house nut for each party. They also determine the time and the number of theatres to ensure the profit the film can make during its theatrical run and ensure the transfer to the theatre by the opening day. They also control the contracted theatres having a certain number of seats, show times, etc. In addition, the MPAA movie rating sometimes is involved in the distribution process. And, interestingly, the research has shown different ratings have various revenue potential. For example, an R-rating movie is likely to make a 12% less revenue than a film with a lower rating. Thirdly, the exhibition of a film has always been seen as the retail branch of the film industry. Exhibitors regularly have a contract with a distributor, which includes the profitsharing terms and length of time the movie will be in the theatre. There is a lot of deals between distributors and exhibitors, which depend s on the perceived revenue potential, the relative bargaining power of the parties, the length of running days, the time of film opening, and other factors. One type of their deals is both distributor and exhibitor take a fixed percentage during the film's theatrical run, another is taking a sliding-scale percentage of gross box-office receipts and other variables. In real life, it seems that distributor could get larger revenue as the time goes on. Because distributors can change the two types of payments and take the larger percentage of ticket revenue after the exhibitor has taken out the house nut. At the same time, the exhibitor can get the profits in concession in theaters, which account for around 46% of profits and about 20% of revenues. That means the exhibitor depend highly on concessions in theatre, as we see, the price of popcorn and soft drinks in a theatre is relatively higher than the outsider. By showing the number of screens and theatres of the top-five chains, the authors proposed that the two most stressful issues for exhibitors are installing digital technology instalment and providing a better movie-viewing experience for the audience. Although digital cinema helps to save an amount of money on film print and has an advantage of efficiency, it is a huge number for the conversion. Another thing costs the exhibitor a lot is the owning and maintenance fee for digital technology. However, the exhibitor has to cover the cost without split with the studios and survives under the depression in motion industry due to the poor movie-watching environment. Besides, theatrical release and box-office performance on opening weekend has been paid attention by the producer and the distributor, while most revenues about 80% of the total revenues come from other forms of distribution, such as DVD, TV. Taking all the above information into consideration, the author conducted an empirical study by collecting production, marketing and revenue data from 2,023 films to explore the major factors influence the success of a release. This study finally found that star power has a significant positive effect on production cost, and hi-tech motion movies and sequels have higher production costs than other films. Then the types of distributors also have an impact on the production costs and the independent distributor have lower production costs than those distributed by the major studio. What's more, the results indicate that production costs, quality of a movie, ratings of motion pictures and release seasons are the determinants of marketing costs and the movie features, including star power, hi-tech genre, distributor, also make an impact on the volume of marketing costs. Production costs and marketing costs are found to have a positive effect on the box-office revenue. From the result of regressions, they got a conclusion that marketing costs have a stronger impact on film's revenue compared to production cost. The results also indicate that the star-laden, hi-tech, sequels and major studio finance lead to a higher production cost. Relationship of case to work experience Although I have no experience in the motion picture industry, this case study gives me a new perspective on assessing the return of marketing investment and production cost. This case reminds me of my previous work experience in a small software startup company called Lawei Technology Co.Ltd. It's a young company, and it faces a question that it needs to grow its brand to make money but has zero money. In the early stage, it allocated most of the capital on equipment, facilities and staff salaries and left limited money for marketing activities. So it grew slowly and failed to come to light in the competitive software industry. After getting more investment from the government and individuals, it began to do more marketing to change the situation. In my opinion, for most of young companies, it is a hard determination of the cost on marketing and makes good use of it to get more return. What I learnt from this case is that marketing costs can have a stronger positive effect on film's revenue compared to production cost. So it is recommended that companies should allocate a certain percentage of their gross revenue on marketing, especially for a startup. It may help to create buzz and market share as well as build industry connections. Relationship of Case to Material Covered: Costing systems help companies determine the cost of a product or service related to the revenue it generates. The accounting for business nanagers course introduces two costing system: Volume-Based Cost System and Activity-Based Costing. The VolumeBased Cost System assigns manufacturing overhead based on the volume of a cost driver, whereas Activity-Based Costing(ABC) allocates indirect costs to products on the activities they require. Compared to volume-based cost system, Activity-based costing provides a more full and accurate view of product cost, it seems to be beneficial for companies by providing greater accuracy, lowering costs and increasing profitability. Activity-Based Costing (ABC) is commonly used in manufacturing as a method of assigning indirect costs to products on the activities they require. It also can be applied in service industries, because service companies usually do not use cost driver techniques in their cost measurements and allocation procedures, but can allocate cost by various functions or activities. In this case, we can see the different effects of the costs of production and marketing have on the revenue, and the marketing costs have a stronger positive impact on the box-office revenue. So it is suggested to apply Activity-Based Costing system on cost accounting. In practice, it means that we can allocate cost of movie based on activities that cause the costs to vary, such as production, marketing, and distribution of films. And applying this costing system would help in evaluating past performance on boxoffice and cost management and make cost predictions of future engagements more meaningful. What's more, ABC costing requires organizations to focus on and understand the relationships between costs and activity, so it helps find ways to manage or reduce costs to improve their profitability. Summary: This case shows the business process of selling movies and provides key success factors for a box-office success. It seems to have great implication for accounting practices and regulations in the motion picture industry. According to the result of the study, from a matching-principle perspective, organizations in movie industry are suggested to pay more attention to marketing and make bigger investment in marketing than production of movies. It also reveals the importance of understanding the relationship between cost and activity and allocating the cost based on activities. So Activity-Based Costing would be a good choice for service companies to manage their costs.
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Comments on Case Studies
Case 1: The Elements of Supply Chain Management
As stated in the case, Supply Chain Management (SCM) is the key functionality in
making sure that any successful company performs well and gains profits. However, it has to be
noted that there are still other measures that can ensure performance and profitability. Apart from
just setting up a Supply Chain Management, it is also important to ensure that it is aligned to
every stakeholder in the company for it to succeed. The case study reveals that growing a
business is a process and for success and profitability to be achieved, every step must be met to
details. It is good to note that to broaden the SCM, a company has to first align itself through
implementation of a SCM Software like SAP, which helps in integrating all business processes.
In addition, a successful company must have a Strategic Supplier Force that will not only enable
good prices but will also ensure best quality, standards and effective deliveries.
Case 2: Creating an Ethical Culture
I totally agree with David Gebler that ethical culture is important in a business and can be
achieved through implementing values based ethics programs which would guide the employees
in their decision making. Despite that increase in ethics and compliance programs has not really
changed, there is need to build the right culture because it would assist in minimizing the risk of
...


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