Description
Topic 3 DQ 2
Feb 22-26, 2024
Review Case 5.37 in your textbook. Using the questions provided as a guide, explain how you think the budget presented may impact the company. Please review the posts of your classmates before responding to Case 5.37 and provide responses that are different than what your classmates’ have posted and suggested.
To participate in follow up discussion, ask questions and post comments regarding classmates’ posts or respond to follow-up questions posted by the instructor.
Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.
Beena Shaji
Feb 22, 2024, 6:39 PM
Published
Review Case 5.37 in your textbook. Using the questions provided as a guide, explain how you think the budget presented may impact the company.
Hello, Sir and Class
Miller Manufacturing is a prominent player in the competitive mountain biking market that has long prided itself on maintaining a solid position through rigorous cost-control measures. Several years ago, the company implemented a standard cost system based on practical standards deemed fair and reasonable by managers and line workers. However, in a recent turn of events, Miller hired Kate Daniel as their new controller, and her actions could disrupt the delicate balance within the organization. After a brief review of operations, Kate made significant changes, revising the materials and labor standards, which she believed needed tightening. Without much discussion, she presented each departmental manager with a new annual budget based on these revised, more stringent standards, leaving one cost accountant to remark that the new benchmarks appeared to be considerably tighter than their predecessors.
Kate’s decision to tighten the standards is a logical step towards improving efficiency and productivity. The approach, however, can result in potential positive impacts arising from this move. Research has shown that eustress, or positive stress, can favor employee behavior and performance (Johansson & Siverbo, 2014). The heightened sense of responsibility and accountability bestowed upon workers by the tighter standards could motivate them to be more productive as they strive to meet the increased expectations. Furthermore, the shared goal of completing tasks within the more stringent timeframes could foster a stronger sense of teamwork and camaraderie among co-workers as they band together to overcome the collective challenge (Stewart et al., 2021). If managed appropriately, tighter standards could catalyze positive behavioral changes to facilitate employees to build on their focus, organization, and efficiency.
There are evident negative implications of implementing the budget changes in the Miller Manufacturing Company. A noticeable impact is that the unilateral decision to revise the standards without proper consultation or discussion could breed a disregard for managers’ and line workers’ well-being and input (Bedford et al., 2022). Employees may also exhibit feelings of overwork, resentment, and a lack of being heard. The change in worker behavior can ultimately result in discord and conflicts between management and staff. Another negative implication is that workers against the changes in the company may neglect their duties or fail to complete tasks on time, further exacerbating organizational tensions. Research has shown that increased pressure often yields unfavorable outcomes, such as disagreements and conflicts (Bedford et al., 2022). It implies that Kate’s actions could harm the employees and the organization.
References
Bedford, D. S., Speklé, R. F., & Widener, S. K. (2022). Budgeting and employee stress in crisis: Evidence from the COVID-19 pandemic. Accounting, Organizations and Society, 101, 101346. https://doi.org/10.1016/j.aos.2022.101346
Johansson, T., & Siverbo, S. (2014). The appropriateness of tight budget control in public sector organizations facing budget turbulence. Management Accounting Research, 25(4), 271–283. https://doi.org/10.1016/j.mar.2014.04.001
Stewart, V. R., Snyder, D. G., & Kou, C.-Y. (2021). We hold ourselves accountable: A relational view of team accountability. Journal of Business Ethics, 183(3), 691–712. https://doi.org/10.1007/s10551-021-04969-z
REPLY
DDDavid Duren replied toBeena ShajiFeb 23, 2024, 8:59 PMUnread
Beena, many facets of our lives are subject to standards. Your grade in this class is based on the professor’s standards for achievement. What are the components of a product or service’s standard cost. What might be the standard for this class?REPLY
