B321 Tma 02

gesture 1 (a) Simons (1999, pg 768) describes native motif as commit to res recrudesce in behaviours or actions in prescience of intern all in all(prenominal)y- generated rejoins much(prenominal) as personal feelings of achievement and extrinsic indigence Simons describes as (1999, pg 766) desire to engage in behaviours or actions in anticipation of tangible come backs, much(prenominal) as m sensationy or promotion. extraneous motivation is created by pecuniary incentives. An incentive as Simons (1999, 767) describes as being a reward or payment that is utilise to motivate performance.The two types of motivation mentioned higher up weed be spendd to physique a rewards package for the product focalize managers. First I go awaying dispute intrinsic motivation this type of motivation is from inwardly (as Simon states (1999, pg 245)) rather than external. Managers can emend intrinsic motivation, Simons (1999, pg 245) states they can action on troop proud of w here they work and in addition they can involve subordinates in the death oscilloscope process to increase the likeliness that subordinates lead see the goals as legitimate.If subordinates ar included in the process of mountainting goals-asked to provide input and education they atomic number 18 more likely to feel that the goals be legitimate and work more diligently to achieve them. The motivation is aligned to look Tex air powers performance goals, which argon, the granting of book of facts stock-still managers sacrifice performance goals stria by Ted, monthly charges against their departmental turn a gathers, managers ar more likely to stick to the rules class by Ted beca do they are in have got of credit.Also, the purchasing of capital equipment and operating supplies barely having predetermined limits this gives the managers a sense of hold in and able to make finalitys with discover having to ask authority whenever a purchase was to be made. except product managers are allowed to set policies such as pricing for products or services. They to a fault have the power to hire, fire and deal the salary. Product centre managers can rewarded because they have the responsibility to do the above and are free to make choices within set boundaries. Other rewards can be meaningfulness managers whitethorn feel they are doing something important.Also a nonher reward is having the competence, managers can feel satisfied. Lastly, another reward is having the sense of progress, product centre managers will feel they have gained something. I will now discuss the extrinsic incentives, Simons (1999 pg 245-246) states financial performance awards-typically in the form of bonuses-can be linked utteredly to the achievement of goals and targets. Since incentives are to motivate performance Ted has allocated 10% bonus to managers. (b) Simons four levers of rule can be utilize in the effectuation of strategy for Air Tex Aviation.Simons states stra tegic look is not achieved through forward-looking and unique performance measurement and restraint body, but through belief systems, term systems, diagnostic control systems and interactive control systems working together to control two the implementation of intended strategies and the formation of emerging strategies. Simons (1999, pg 763) describes belief systems as explicit set of organisational definitions that senior managers take place formally and reinforce systematically to provide prefatorial sets, place, and direction for the organisation.Figure 14-2 Levers of control (Simons pg, 305) shows belief systems as strategy as Perspective and Obtaining Commitment to the Grand Purpose, this in the context of Airtex Aviation are stolon of all Ted and detent have taken control of the business, Ted is President and head operating incumbent and Frank is chairmanship. They as well have a vision to grow at a rate of 20% per year for the first louver years. To implemen t strategy Ted and Frank decentralised authority and made each(prenominal) operating operation a profit centre and grouped them by departments.Departments were disposed(p) authority over his operations. This creates shared beliefs and missions within the business. Employees will be more prompt because of the more control they have and they will have the sense of belonging to the business. Simons (1999, pg 764) describes boundary systems as explicit rumors imbed in formal information systems that restore and communicate specific risks to be avoided. bounce Systems in the situation of Air Tex Aviation are, Simons (1999, pg 297) draw as rules, limits and proscriptions.Rules in Airtex Aviation are decentralising the business, installment a control system. Limits introduced are profit centres having the authority to deprave operating supplies and capital equipment with purchase rate limits. A reason for limits is described by Simons (1999, pg 297) as to allow single(a) creat ivity within de fined limits of immunity. Proscriptions include removing Sarah Arthur and her accounting system as it was not working and introduce a control system that supports the management and provides information needed in order to make decisions.The accounting system forward gave employees a lack of motivation because they were not involved in the decision making process. Also Simons (1999, pg 279) states communicate standards of business conduct for all employees, thats what the new control system does, involves all employees. My good words to AirTex Aviation would be use all four levers of control together as one cant work without the others. Also I would recommend the high society when financially able to perhaps train managers, as close to employees have besides studied up to high school.Another recommendation would be for the department managers to set out goals for their own departments, use a equilibrise scorecard or something similar. Moreover, I would in addi tion recommend the business owners to draw up perhaps a mission statement or a statement of purpose and distribute it to each manager, so they bop the objective and purpose of the business. Overall, the owners have turned the business around and should carry on as they have fage so. mind 2 (a) In the article by Jones, T. C. and Dugdale, D. (1994), near of the interviewees check overd, illuminate present valuate is superior to requital.I will summarise the views of the five interviewees below. tenner a lecturer was one those that thought that NPV is better than PB. exaltation does however conceptualise that payback, in Jones, T. C. and Dugdale, D. (1994) works fine for simple, straightforward projects, but does judge how unserviceable it is and NPV gives the right answer and considers era entertain for money. He also thinks that NPV has no disfavor whatsoever. He also goes on to say that collusive NPV is sluttish because of the use of computers. His pedantic group also suit with him that NPV is superior.Frank chief accountant was one of those interviewed who was against NPV and suspicious of it, describing it as dangerous Jones, T. C. and Dugdale, D. (1994). He has been using PB for many years and says it is simple to use and NPV is complicated, time consuming and conveys spurious accuracy Jones, T. C. and Dugdale, D. (1994). He also says that NPV is hard for managers to date they prefer PB. Simon a senior finance manager thought no assessment method has importance but believes NPV completely relevant with high interest range & long time periods, Jones, T.C. and Dugdale, D. (1994). He believes that information given to managers should be what they want and accountants should helper in making investment decisions not decide which idea method to use. Judy a junior finance manager prefers to use NPV rather than PB because it considers time look upon for money which is important in her view. She also says NPV gives ability to alter ass umptions & identify incompatible outcomes Jones, T. C. and Dugdale, D. (1994). She has very strong views for NPV and thinks managers should use this proficiency but.Managers have studied MBAs so thinks it will be easy for them to understand. entirely She fears that she may be a dupe of my training which might have been academic brainwashing, Jones, T. C. and Dugdale, D. (1994). Len a finance incumbent also says authorize present value is superior to payback. He doesnt agree with Adams suggestion that PB figures might be ad reasonableed to beam more clearly the results of NPV analysis Jones, T. C. and Dugdale, D, because of honorable rules. (1994).He too like Adam finds calculating NBV easy because of the use of computers. The interviewees which I mostly agree with are Len, Judy and Adam this is because, they believe that NPV is superior to PB. Also NPV considers time value of money and is easy to figure because of the use of computers. I also agree with Judy that managers sho uld be taught NPV because PB is simple and as Adam said NPV should be used for minor projects. (b) Pure reasoning in my view would be coming up with answers which would be the norm and what most people would agree to.An example in B321 grapheme studies would have to be that of Classic pen Company Developing an ABC Model. Jane Dempsey came up with information by using methods such as activity found be used by accountants. Overall, I think pure reasoning would have the most influence on someones decision making process this is because most people adhere to the norm they dont want to be seen as deviant. Also most people would be scared to do otherwise just in case the decision doesnt turn out to be as expected, which may get them into a softwood of trouble. (c)My views have changed since recital the article because, before I thought that calculating net present value for investment appraisal was complex and very complicated but both Adam and Len find it easy because of the use of computers. Also before reading the article I thought payback was completely useless and unreliable for investment appraisal but as Adam points out it is fine to use on simple projects. Also another take in for NPV is that it gives ability to alter assumptions & identify unalike outcomes, Jones, T. C. and Dugdale, D. (1994) as Judy points out.Both appraisal methods have their benefits, net present value has more benefits overall. Question 3 (a) Total machine hours 880,000 ? 44,000 = 20 enlivened Pies 20 ? 4,000 = 80,000 ? cc0 = ? 40 per ken porc Pies 20 ? 40,000 = 800,000 ? 20,000 = ? 40 per jackpot (b) Set up connect 420,000 ? 200 = 2,100 Pork Pies 2,100 ? 120 = 252,000 ? 20,000 = ? 12. 60 Game Pies 2,100 ? 80 = 168,000 ? 2,000 = ? 84 Purchasing related 240,000 ? 480 = 500 Pork Pies 500 ? 320 = 160,000 ? 20,000 = ? 8 Game Pies 500? 160 = 80,000 ? 2,000 = ? 40 Volume related 44,000 + 88,000 = 132,000 220,000 ? 32,000 = 1. 67 Pork Pies 1. 67 ? 120,000 = ? 200,400 ? 20,000 = ? 10. 02 Game Pies 1. 67 ? 12,000 = ? 20,040 ? 2000 = ? 10. 02 exist centre costs for pork pies per batch ? 12. 60 + ? 8 + ? 10. 02 = ? 30. 62 appeal centre costs for game pies per batch ? 84 + ? 40 + ? 10. 02 = ? 134. 02 (c) The difference with activity based be and traditional costing is, firstly traditional costing only assigns overhead cost machine hours or direct labour hours to products. Whereas activity based costing uses activities for accumulating costs as described by Atkinson (2004, pg 127).