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T198 Standards In Companies

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Accounting

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Running head: STANDARDS IN COMPANIES 1

Standards in Companies

Institution Affiliation

Date

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STANDARDS IN COMPANIES 2

Reasons why having standards is beneficial for organizations

Companies need to adopt different activities so that they may succeed. One of the best

mechanisms that are very beneficial for companies is by setting and assigning standards to their

employees. Assigning standards is very beneficial because it enables companies to increase the

efficiency of tasks performed as employees are expected to achieve them. It enables companies

to reduce costs because standards help reduce misuse of company’s property. It also enables

companies to have a competitive advantage especially over companies that do not have standards

(Großmann and Gruben, 2014). Hence, this means that standards do not create any unnecessary

pressure on employees. When managers see that employees are not meeting direct labor or

material standards, the best solution is to have a discussion with the employee to identify why

they have not met the standards. They may then offer advice to them on how to meet the

standards and then ensure that they frequently monitor the employee to identify whether they

meet the standards.

The pros and cons of standards

There are several pros and cons of having standards in a company. One advantage of

having standards is that fact it helps in improving performance in the organization. This is

because it provides a guideline of how activities need to be done. It also helps in reducing costs

as it depicts the ways in which cost will be incurred. Standards also help in reducing and

minimizing waste of a company’s resources. Standards also help in quality assurance where a

firm is able to produce goods and services which have high quality. Also, having standards in an

organization help in enhancing efficiency because the employees have a guideline to follow

when performing their tasks (Mijatović, Čudanov and Krivokapić, 2014). However, standards

also tend to have their limitations and disadvantages. For instance, when an organization has

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Running head: STANDARDS IN COMPANIES Standards in Companies Institution Affiliation Date 1 STANDARDS IN COMPANIES 2 Reasons why having standards is beneficial for organizations Companies need to adopt different activities so that they may succeed. One of the best mechanisms that are very beneficial for companies is by setting and assigning standards to their employees. Assigning standards is very beneficial because it enables companies to increase the efficiency of tasks performed as employees are expected to achieve them. It enables companies to reduce costs because standards help reduce misuse of company’s property. It also enables companies to have a competitive advantage especially over companies that do not have standards (Großmann and Gruben, 2014). Hence, this means that standards do not create any unnecessary pressure on employees. When managers see that employees are not meeting direct labor or material standards, the best solution is to have a discussion with the employee to identify why they have not met the standards. They may then offer advice to them on how to meet the standards and then ensure that they frequently monitor the employee to identify whether the ...
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Tags: accounting Cost Volume Profit Analysis and Standard Costs