1. Company’s name
2. Establishment year
3. Vision & mission
4. Managerial Highlights
6. Key Performance Information
b) Identify and describe the value chain of the company
c) Describe the process of Planning, Controlling and Decision Making in the company.
d) Summarise and present the various types of management accounting information and tools that the company use in their business.
e) Provide recommendation of at least 2 management accounting tools that you believe will be useful for the company and explain the reasons for your recommendation.
The business operation involves various activities one of these are managing financials, planning and decision making. It can be said that a company with effective fund management, planning competency and decision-making process is always successful in conducting their business operation. It can be said that in the assessment there will be critical evaluation of these subjects to determine the overall efficiency of a company using their strategies under these business operations. The company selected for the current assessment is Telstra Australia that is a telecommunication company based in Australia. The different system used by the company will be evaluated in this assessment to shows the competence of the business in conducting their business operation through consistency.
Introducing The Selected Company
Telstra Corporation Limited is one of the most prominent telecommunication company in Australia. The company deals with mobile, networks, digital television network provider. The company in the current situation is fully privatized company and at present, the company mainly focus on their customers. During the year 1901 the postmaster- general’s department was the one and only Telecommunication Company that used to control the entire Australian network. Later in the year, 1975 many companies came into existence to replace the postmaster- general’s department. Telstra was first under the postmaster- general’s department, but later it became privatized. In Australia, Telstra controls majority of public telephones. GSM and 3G are used by many countries till now and in Telstra maintain this wide range of network in entire Australia. The company holds a good market position since 2011 as it has reduced its mobile phone products price which attracts the more clients to them (McDougal, 2017). It cannot be neglected that there are also other telecommunication companies in Australia that provide many opportunities for their customers but Telstra is holding a constant and prestigious position in the country. With their quality of services and their assurance to their customers, the company attracts a wide range of customers towards themselves.
Identifying And Describing The Value Chain Of The Company
In accordance to the company’s view, it can be said that Telstra is focused on creating business value for sake of its stakeholders. It can be said that the company seeks to achieve sustainable goals which will increase the value of the business in the upcoming years. It can be said that the value chain of the company has been divided into some key stages which are shown in the figure below
Figure 1: Value Chain of Telstra
(Source: exchange.telstra.com.au, 2018)
The image above shows the different line of products and services which the business conducts and increases its value for the stakeholders of the firm (Mudambi and Puck, 2016). It can be said that In the line of manufacturing the stages which the company comply are as follows:
Manufactured products: The company looks at developing products for the demands of the consumer so as to meet their satisfaction levels. The products are made to fulfil the requirements of the customer and increase the brand value of the products.
Products and solution: The products and solution are designed by the company to render high-quality products which fulfil the demand of the customers. The core elements involved in the manufacturing of the products, solution generation is design, procurements, and customer sales support. It can be said that incurring core competency in these elements helps the company to increase their brand value in the market.
Customers: The chains run down to its end when obtained by the consumer the company effectively communicate with the consumer after sales of the product to maintain healthy and efficient consumer relationship (Jaligot et al. 2016).
In terms of service the company rendered the following value chain
Service providers: The company organizes the services in an efficient manner to make the service rendered by the company efficient helping the firm to effectively operate in the market.
Network and operation: The company is corley focused on there network and operations to ensure that network field recovered by the consumer is effective and extensive providing the best telecommunication service to their customers (El-Sayed et al. 2015.).
Community: The community in the telecommunication industry acts as a consumer to receive the best service from the company that ultimately increases the brand value of the firm in the market (Gereffi and Fernandez-Stark, 2016).
Describing The Process Of Planning, And Decision Making In The Company
Planning means a proper plan which a company makes for future course and actions. Being a telecommunication company Telstra has many future plans for their company. The company always make a pre-plan for their upcoming events and market launch. The company used the method of brainstorming by which they jot down all their problems to solve it. The companies before making any plan or taking any decision first arrange meetings with the employees and other faculty members. Taking up any new plan is a responsible thing that the company owner does not take alone. To make a plan first they consult with their business adviser then it is discussed with their employees. During the discussion, people clarify their doubts and suggest some new ideas or changes if required. The manager of the company plays an important role in the decision-making process (Ghezzi et al. 2015). The manager of the company first selector identifies a situation and then he/she try to think about the future circumstances of that particular or selected situation. In the planning process, the manager of the company first select specific goals and find solutions to fulfil and attain those goals. In the planning process, it is difficult for the company or rather the manager of the company to select goals and to fulfil the goals.
The management of the company is always concerned with planning for future related to the short-range plan and long-range plan. The planning process of the company undergoes to take some decisions for the company that the company fulfils in the future. Both planning and decision-making are interrelated to each other. Both the terms are used by the company to set future goals and to identify threats for the company. The company by utilizing the decision-making process easily gets aware of the future problems for a selected motive (Grishin and Suloev, 2015). Telstra chose their planning very carefully because they know that they are the brand of Telecommunication Company in Australia and a simple mistake can ruin their rank which they are holding at present. The management of the company first makes a plan and then they discuss it with their other employees to know whether their employees will be able to deliver it properly and on time or not. The company also make the decision carefully so that the main motive behind the goals of the organization should be for the betterment of the company (Pedron et al. 2016). All these operations are controlled by the management of the company where the operational manager is involved and play a specific role in the case.
Summarising And Presenting The Various Types Of Management Accounting Information And Tools That The Company Use In Their Business
Telstra Company uses two types of management accounting tool which they use for their business which is as follows-
Budgeting- Budgeting is a plan which the company uses to check and control their budget of investment and expenditure. Telstra is a telecommunication company and maintaining a proper and balanced budget is essential for the company. The company controls networks in the country and also provides public telephones and mobile products for which they invest a large sum of money (Rubin 2016). With the help of a budgeting plan, the company ensures that they can utilize their money during the time of their need. The budgeting plan helps the company to maintain a proper budget for all the equipment and products of the company. The company also predicts their future investment with the help of a budgeting plan. The budgeting plan also allows the company to secure a proper financial plan related to bot profit and loss. Telstra maintains their reputation in Australia by providing the best services to their customers and for this, they maintain high-qualitytechnologies and wire cables and mobile products. The budgeting plan allows the company to purchase its products. The company maintains a proper budget plan which also helps the company as a backup plan (Bogsnes 2016). The company is aware of its future purchase or investments and by this, the company does not face any major financial loss.
Variance analysis-The variance analysis of the company helps to keep a constant control overits operational management and helps the company to make better performance. The variance analysis is a plan or rather an investigation which is done when the company compares its budgeting and its investment. The variance analysis helps the company to set low rate budgets which the company wants to maintain. The variance analysis is beneficial for the company as the company get to know about the causes of their faults and the management thanwith the help of variance analysis try to solve the problem and learn to avoid that situation in future (Campbell et al. 2018). The variance analysis controls the entire departments of the company and it detects the problems of the company and the company later fix all the problems and maintains a strict protocol related to their budgeting or employment departments.
Provide Recommendation Of At Least 2 Management Accounting Tools
In order to make their management accounting more prominent and effective the company can also introduce the following two management accounting tools as it will help the company to more effectively manage their financials:
Cash forecasting: Cash forecasting is efficient management accounting tools which can be used by a company to ensure that fund management system within the company becomes more efficient. Under the procedure of cash forecasting system, the company will forecast the amount of cash or monetary resources which will be needed by the company in there future days of operation (Otley, 2016). It can be said that for this purpose the company will have to determine the amount of the operations that arenot conducted in the future days of company’s operation based on which the company will differentiate the amount of fund required under a different classified section of operation. In this way, the company will be able to recognize the number of funds which will be needed by the company (Langfield-Smith et al. 2017). This will help the firm in optimizing the use of monetary resources in the company whereas it will also help the company to monitor the flow of cash within the business activities of the firm.
Overhead allocation: Overhead allocation is also a process under which the company will; allocate overhead cost on classified cost allocation areas of operations. The company can also add the following costing system within the operational activities as it is a prominent way of business cost allocation system. It can be said that the company will have to look out the overhead cost which will be incurred in the operational, marketing or product activities of the company based on which the company will determine the amount or cost required for the conduction of the particular activity in a prominent and classified manner (Renz, 2016). Through this costing technique, the company will be able to easily identify cost and to optimize the following in increasing the profit margin of the firm. It can be said that this will be very beneficial for the company to report their cost in the financial reporting time (Fullerton et al.2014).
Concluding in the light of the above context it can be said that the company he prominent competencies which have helped the company to build up a large company in the telecommunication industry. It can be said that the company has core competency to ensure that all of its business activities are properly planned and attempted to successful completion. This has helped the company to have a competitive edge over others in the market. The suggested, management accounting tools can be used by the company to increase the management accounting system which will ultimately increase the planning and decision making the efficiency of the firm increasing the competency of the company is performing well for future days of operation in the market.
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