Strategic People Management

Strategic people management is a key function in every organization. This article seeks to discuss the three strategic people management areas in England’s National Health Service (NHS). Specifically, the paper will analyze leadership and management, talent management, and training and development in the NHS. Finally, the paper will recommend ways forward for the NHS in keeping best practice and improving areas which are more problematic.

The competitive advantage of an organization is based on several things like investing in new technologies, financial management, and effective human resource management. The style in which people are managed in an organization has a critical role in achieving the goals of an organization. Poor management of people can lead to poor performance or to the collapse of the whole organization. To avoid the demerits associated with poor people management, three areas referred to as areas of strategic people management have been devised.

The three areas are leadership and management, talent management, and training and development (Bailey, Mankin, Kelliher, & Garavan 2018). This article seeks to compile a report on England’s National Health Service (NHS) department and highlight the importance of strategic people management.

In 1948, the NHS was established to manage and regulate health services in the United Kingdom. The objectives of establishing the trust were to offer comprehensive health services, free at point delivery, and to centralize the health services. 70 years after its establishment, the trust is yet to achieve some of its objectives. It has been accused of poor health care delivery, failure to cater to the ageing population, long waiting times, over management, and insufficient staff training. The junior staff of the trust have complained of high workloads while the senior management complains of poor funding. A report by King’s fund supported the claim that the trust is poorly funded and refurbished the allegations by the critics that the trust is over-managed (Ham et al., 2011).

Strategic People Management and Leadership

Great Man Theory of leadership suggests that everyone is born with certain leadership traits (Spector 2016). This theory means that if you put together several people to work together in different leadership positions, a great result can be obtained. The NHS in England has tried to employ this theory by having many leaders in each department. Over the last two decades, the trust has increased its number of leaders significantly. In England, there has been an increase of 37% in the number of leaders in the last 19 years. However, many leaders can lead to leadership bureaucracy because no single person can be held responsible for a failure. Managerial positions are entitled to managerial remuneration, therefore, increasing the number of leaders increases the administrative costs for the trust which is already under-funded.

The NHS has been attacked by political parties and other critics of being over managed.  Currently, the trust has over 6000 board member and 700 doctors practicing as directors. The critics accuse the doctors of working as directors in contrary to their calling of treating people. However, positioning doctors as directors only cater for distributed leadership. Experienced doctors should the nurses and other doctors to address the issue of poor care and in implementing clinical processes. It is also easy for doctors to hold clinical officers accountable than other professionals. Health care is a complex service and should have many leaders. The NHS should not be accused of being over-managed due to the complex nature of health care.

The Audit Commission and the national audit office have accused the trust of poor leadership styles. Collectively, the two critics have accused the trust of spectacular managerial failures which has led to poor care, hospital acquired infections, surgery deaths, and long waiting times for the patients. Due to the increase in the aging population and the situations at hand such as long waiting times, the leaders have to change their leadership styles. The leaders seem to stick to their styles regardless of the increasing challenges in the trust.  The contingency leadership theory suggests that leadership style should be changed to cater for certain situations for there is no single way of leadership. It is the high time that the leaders in the trust changes their style of leadership to address the current issues of long waiting times, poor care, and caring for the ageing population.

Exchange leadership theory urges that leadership is only effective when the leader gives a motivational value or a reward, either motivation or punishment to his follower (Zhang et al., 218). This theory means that a leader should be given sufficient time to reward and motivate the juniors. Demotivating the followers will lead to poor results. However, the current managerial culture in the NHS betrays the Exchange Theory of Leadership.

Leaders are given a short tenure of two years. Two years are insufficient to reward and motivate the juniors. In addition, the short leadership terms cannot enable the leaders to handle the problems in the trust. The external pressure from critics and political parties demotivates the managers. The leaders should be given room to lead the trust and managers should have longer tenure for them to address the current issues in the trust (Jiang, Hu & Wang 2018). Blame games demotivate the employees. The trust has a culture of blaming the employees or a manager in case there is a failure. The managers and medical directors have blamed the nurses and clinical officers for the failures in the hospitals. The blame games demotivate the nurses and the clinical officers rather than motivating them.

Training and Development

Service delivery is depended on the level of training staff gets before and on the job (Larsen, 2017). Job training gives one chance to learn through experiment (Saks 2015). Experimental learning theory suggests that one can best learn through experimentation, reflective observation, and abstract conceptualization.

Organizations should, therefore, have training sessions for their staff. Training also gives a chance to incorporate new staff into the current organizational culture. The NHS staff should be trained in managing people and on business finance. So far the NHS has shown a willingness on training its staff by coming up with business finance course aimed at training all their staff regardless of their positions. Changes in technology and continuous research by health professionals call for regular training to equip the staff with the new skills being invented in the health sector all of which can be deployed using strategic people management.

To train the employees, the NHS has established several courses. The employees can access short-term courses, bachelor’s degrees and master’s degrees. It gives a chance for nurses and clinical officers to subscribe to different courses and enhance their skills. This shows that the NHS is committed to improving the quality of health care it offers. The trust faces negative issues of caring for the ageing population and long waiting times. In contrast, none of the courses offered by the trust is concerned with the two issues.

Strategic People Management and Culture

It seems to be part of the NHS staff beliefs that long waiting times are normal and nothing should be done on that. A staff training should be carried out to change the attitude and beliefs on long waiting times. Theory of planned behavior purports that training changes the attitude and belief in certain behavior (Montano & Kasprzyk, 2015). The NHS, therefore, should organize training aimed at changing the attitude on long waiting times. 

Strategic People Management Dissertation
Strategic People Management Dissertation

It is commendable that the NHS organize in-house induction with updates in statutory areas on annual basis. The NHS managers hold meetings with staff on a regular basis where training and development opportunities are discussed. The staff are also allowed to apply for funding in case of a professional development course. However, the course must fulfil a professional need and support of the manager is required. 

The training offered by the NHS is only concerned with health care and not human resource management. Good health care can only be delivered under the effective leadership of people. The trust should come up with training programs aimed at equipping the staff with leadership skills. The trust participated in the South Central Leadership Program. The program was aimed at enhancing the leadership program for the senior staff. Skills development in health care is essential in health care and not a mere luxury. South Central Leadership Program should, therefore, involve all health staff regardless of the positions they hold.  The NHS continues to call for applications of their courses which open to anyone who wished to work in the health care department.

Talent Management

The first step of managing talent is on recruitment (Davis, Cutt, Flynn, & Mowl 2016). The human resources department should come up with a rigorous recruitment process aimed at selecting the best staff to work for the trust. However, talent management is not a function purely on the human resources department. The top management has to manage talents once the employees have been selected.

The human resources departments should offer assessment tests before recruitment and give a probation period before an employee is confirmed. This will make sure that the best employees are employed by the trust. Once an employee secures the job, a room should be given to express self-initiative. However, the current situation at the NHS does not give room for self-initiative. The blame game from the managers and pressure on the employees due to high workloads impairs their self-initiative. The external pressure on managers by critics also scares the managers from expressing their self-initiative.

For performance appraisal, the NHS has come up with a policy to identify the poor performing employees. Employees performance will be assessed according to complains received from visitors, fellow employees, and the observation of the manager. In case of a poor performance the employee will be asked to give feedback to the manager. The managers are supposed to fill a performance form for each employee in their department.

However, the NHS does not propose differentiated workforce in its policy and only proposes penalties for the employees who perform poorly. In the differentiated workforce, the best performing employees are rewarded better than others (Collings 2017). The differentiated workforce is to recognize the best employees and to avoid losing the key and the experienced employees to other organizations.

The NHS also lacks a wide pool of talents since people from other organizations are reluctant to work for the trust due to undue pressure on its employees and high workloads compared to the people working in private hospitals and those working for NGOs. The trust also has a culture of appointing people who have worked for it before which keeps away candidates from the private sector and other government institution.

Conclusion and Recommendations

Strategic people management is very important for every organization and should never be undermined. Poor management of people results in poor performance of the whole organization. The NHC has many managers. However, due to the complex nature of the health department, it can be concluded that the trust is not over-managed. There should be clear roles for every manager to avoid leadership bureaucracy. The trust faces a lot of pressure from external bodies and within itself. The trust has a culture of blaming employees of any fault during the line of duty. The trust also has a culture of having short tenures for its managers.

The trust offers training for its staff but the training given is a drop in the ocean since it is not concerned with managing people. The training given is only concerned with increasing treatment knowledge to the staff. The trust lacks a wide pool of talents due to its recruitment policy which selects people who have worked for the trust before. The performance appraisal policy of the trust only forces the staff to perform better but it does not recognize the best performing employees through differentiated workforce.  I wish to recommend the following to the NHS;

  • The South Central Leadership Program should involve both junior and senior staff. This will increase the chances of creating future leaders for the trust.
  • The public and critics should avoid giving undue pressure to the leaders of the trust and give them room to lead.
  • The trust should increase the tenure of its leaders. A longer tenure will give them time to fix the current problems facing the trust.
  • The NHS should recruit managers from the private sector and other government organizations. This will help in increasing its pool of talents.
  • On top of South Central Leadership Program, the trust should establish a leadership center for mentoring future leaders, offering training, and to support innovative programs.
  • Adopt a more robust approach in relation to strategic people management.

Bibliography

 Bailey, C., Mankin, D., Kelliher, C. and Garavan, T., 2018. Strategic human resource management. Oxford University Press.

Collings, D.G., 2017. Workforce differentiation. Oxford handbook of talent management, pp.301-17.

Davis, T., Cutt, M., Flynn, N. and Mowl, P., 2016. Talent assessment: A new strategy for talent management. Routledge.

Ham, C., Baker, G.R., Docherty, J., Hockey, P., Lobley, K., Tugendhat, L. and Walshe, K., 2011. The future of leadership and management in the NHS: no more heroes. Report by The King’s Fund.

Jiang, Z., Hu, X. and Wang, Z., 2018. Career adaptability and plateaus: The moderating effects of tenure and job self-efficacy. Journal of Vocational Behavior104, pp.59-71.

Larsen, H.H., 2017. Key issues in training and development. In Policy and practice in European human resource management (pp. 107-121). Routledge.

Montano, D.E. and Kasprzyk, D., 2015. Theory of reasoned action, theory of planned behavior, and the integrated behavioral model. Health behavior: Theory, research and practice, pp.95-124.

Saks, A., 2015. Managing Performance through Training & Development, (Canadian ed.). Nelson Education.

Spector, B.A., 2016. Carlyle, Freud, and the great man theory more fully considered. Strategic People Management12(2), pp.250-260.

Zhang, X., Zhang, Y., Sun, Y., Lytras, M., Ordonez de Pablos, P. and He, W., 2018. Exploring the effect of transformational leadership on individual creativity in e-learning: a perspective of social exchange theory. Studies in Higher Education43(11), pp.1964-1978.

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Science Marketing and Art Marketing

Science Marketing and Art Marketing: Marketing research and branding

Science Marketing and Art Marketing: Marketing research is the processes through which the marketing managers collect relevant information about their product and the customers. It also involves an evaluation of the necessary strategies required to develop the correct product that will capture the attention of the customer. It provides the basis for the development of the correct marketing mix and the correct style of marketing. Branding, on the other hand, is the process through which a business develops and creates a unique image and name for a product in the customer’s perspective.

Branding incorporates information marketing research to create a brand that is attractive and present in the customers’ mind. The information from marketing research is important as it presents the customer’s expectations. In other words, branding is the art through which the marketing management delivers the customer’s expectations. It is the means through which the marketing management showcases creativity and ability to meet the customers’ expectation. Combining the two strategies creates a mix of art and science that delivers the right product in the eyes of the customer.

Market research

Market research is the process through which managers gather important information about the product from the consumer. It is a science because it involves a combination of processes designed to gather information and knowledge. The science of market research is objective because it aims at gathering relevant information about the customers. Its main objective is to determine the viability of the product from the perspective of the customer. Market research is the process through which the company identifies the possible market and the customer base for the product. It involves understanding the needs of the customers and the means through which the company can modify the product to meet the customer’s expectation. Also, market research involves gathering the necessary information about the customers’ purchasing power and the ability to purchase the product. Through market research, the company can determine the best marketing mix that would help maximize revenue (Burns et al. 2014). Also, the company can use market research to gather information about preexisting segments in the market. Hence, market research is also useful in market segmentation and product differentiation.

Market research is an objective process that involves the identification of the desired market and the development of strategies for information gathering. The management must also analyze the data collected to extract useful information (Burns et al. 2014). It involves the collection of qualitative and quantitative data concerning the customers. The company can either correct the data directly or through existing research. Therefore, the company has to decide whether to use primary or secondary data sources. Primary data refers to the type of data that has not been used in prior research and that the company collects through primary data collection tools. Secondary data, on the other hand, refers to information gathered in a prior research.

The use of prior research implies that secondary data collection involves another entity. When a company chooses to use primary data collection methods, the management has to decide on the objective of the research. The management can decide to collect answers to previously identified issues. Therefore, the management identifies areas of concerns and seeks to collect answers to the questions through market research. The management may also choose to identify new issues in the market. Using this route, the management seeks to collect an array of questions that the customers would like answers to. Whether the company chooses secondary or primary data, the main purpose of market research remains the same, the company seeks to fulfill a certain set of objectives.

Science Marketing and Art Marketing
Science Marketing and Art Marketing

Market research is mostly applicable or put into use when an organization seeks to venture into a new market. It is also necessary when the company seeks to rejuvenate its market competitiveness or brand position. Organizations may also opt to identify the characteristics and needs of a special group in its marker. Researching the market may also be necessary when the company seeks to introduce a new product in its existing market (Burns et al. 2014).

Based on the reason behind market research, every form of research will have different objectives and strategies for obtaining the required set of information. For example, a company seeking to venture into a new market has to conduct an investigation of the current interest for the product in the new market. In other words, the organization must collect information to justify the viability of the new product in the target market. Based on the outcome of the research and information gathered, the management can then decide on whether to actualize the plan. If the company establishes that the customers have a viable interest in the product, the move to invest in the new market becomes feasible. However, interest alone is not enough to make a decision to venture into the new market. The organization also has to investigate the price viability and customers’ ability to purchase the product. Hence, the management must develop a strategy that answers all the necessary questions

Branding

Branding is the means through which the management answers to the expectations of the customer by providing the product in a manner that the customers are likely to accept. It involves positioning the product in the mind of the customer and presenting the product in a likable manner. It is an art because it involves the use of knowledge and skills to develop a product. The art of developing a brand is subjective to the information gathered and the need to present a final product that meets the customer’s needs and expectations. Branding involves the development of the product and means to position the product in the minds of the customers (Latif et al., 2014). Therefore, the art of branding involves the physical aspect of designing and developing the brand in form of the product appearance and composition. The physical aspect of branding involves the development of an attractive and memorable product. The physical aspect of branding involves creatively designing the aspects of the company that relates directly to the customer. One is the physical appearance of the product. A good example of vigorous branding is the Fanta brand of Coca-Cola that continuously changes shape and appearance to capture the customers’ attention.

Similarly, physical branding involves the development of the company’s logo in a unique and appealing manner. The logo is the main identifier for any given organization. Its uniqueness determines the company’s ability to position itself in the market (Latif et al., 2014). Therefore, the company must design the logo uniquely and outstandingly. It also involves the development of a company slogan. The slogan must reflect the values of the company and appear in a manner that keeps it viable in the eyes of the customers. Like the logo, the slogan will most likely be visible to the customers at all times. Hence, the slogan must stand out in the market. Most companies identify by the brand. A well-established brand often appears to be similar to the company. Most customers consider the brand to be the same as the company (Latif et al., 2014). Even for companies that have a brand name different from the company name, customers often confuse the company with the brand.

The art of branding involves several aspects that define the company’s position in the market. Brand positioning is particularly important in marketing (Latif et al., 2014). It involves the setting up the brand in a manner that is noticeable and memorable. The brand position is a marketing strategy that is directed at creating a unique appearance to the customers. Other than the design of the logo and the slogan, positioning the brand may also include printing the brand name, logo, and slogan on the company products. The art of positioning has evolved to include online presence and ease of accessibility of information in social media and on the internet. The company can also improve the position of the brand by carefully placing the logo or the slogan in the customers’ daily activities. The Coca-Cola Company is usually very active in brand positioning. For example, the share a coke market campaign positions the company logo and slogan at the heart of summer celebrations. The company also uses promotional campaigns to position the brand in sports and other activities to keep the brand in the customer’s minds.

Science Marketing and Art Marketing

Marketing requires a combination of science and art to achieve its objectives. The application of scientific strategies in marketing allows marketing managers to collect sufficient data. It allows managers to track marketing expenditure and effectiveness. According to Gross (2017), the ease of data collection and marketing research through digital marketing enables the success of marketing strategies. Such a scenario indicates the importance of data collection and market research. According to Gross (2017), the integration between science and art in marketing guarantees the success of any marketing campaign. The organization must find a balance between the art and science of marketing in order to achieve the objectives set. Strategic marketing management is the simply the development of strategies that combine the art and science in marketing. It involves developing the necessary skills and techniques that enable the company to achieve its marketing objectives.

Therefore, market research and branding are simple methods of defining a multifaceted and complex science and art marketing. The discipline involves developing a synergy between the science in market research and the art in branding. The data collected in market research is helping the company to design and develop a unique and lasting market brand. Other marketing strategies whether art or science come into play to make the processes successful. For example, marketing managers can employ strategic marketing to develop strategies for the implementation of research and branding. Similarly, the marketing managers can employ product design in branding as described above to position the brand on the products. By combining marketing science and art, marketing managers develop strategies to achieve marketing objectives. Therefore, the two forms of marketing must work together for the betterment of the marketing department.

References

Burns, A. C., Bush, R. F., & Sinha, N. (2014). Marketing research (Vol. 7). Harlow: Pearson.

Gross, J. (2017). Marketing: The Convergence of Art and Science. Forbes. December 1. 2017.

Latif, W., B. Islam, A. & Mdnoor, I. (2014). Building Brand Awareness in the Modern Marketing Environment: A Conceptual Model.

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Project Control Construction

Project Control

Project control is vital since it ensures that resources, budgets, and time are used effectively. In addition, the project control is significant as it enables the project manager to evaluate the progress of the project and adjust on the shortcomings and risks that are encountered during the completion of the project as discussed below.

Earned Value Management Techniques

As a project manager of a 5000m2 retail development construction project, the project control measures are very vital in the quest to achieve the goals. Control of this project can be conducted using the Earned Value Management, EVM. The EVM evaluates the progress of the project embracing the objective approach (APM, 2013: 7). This technique is very significant as it enhances the control work which can be conducted at any period, hence, determining the current status of the project. The EVM embraces the use of a baseline project plan to control the desired outcome. In this method, the cost management as well as the schedule of the project evaluations are conducted in an integrated manner (APM, 2013: 9).

Some of the goals of the 5000m2 retail development construction project include maintaining budget and minimizing costs. This necessitated the allocation of specific amount of the resources including the human capital. In this regard, project control enables the project manager to have a control of how the project progresses considering the time taken for each activity undertaken (APM, 2013: 9). More so, the cost of the project is controlled using EVM is necessary to evade the misuse of the resources and finance allocated for the project which could jeopardize the outcome. Apart from that, EVM project control is vital since there is absolute need to deliver positive results which are useful in answering the business case (APM, 2013: 7).

Project Control Measures

Using measures such as the evaluation of the performance reports can be of great importance in ensuring that project scope including project plan, schedule among others are helping the project manager deliver the goals of the project as stipulated before the project commenced (Fleming and Koppelman, 2010: 54-55). As the project work progresses, the project manager should be informed about the achievements made as well as the cost that has been used by the time performance reporting was been conducted. EVM also enables the manager to have an estimation of the final cost of the project together with time that is likely to be consumed (APM, 2013: 9). The EVM gives a clear overview of the progress and the status of the project which is essential for the project management since the resources as well as activities are arranged in logical sequence. This ensures that the activities are at as planed in the baseline project (APM, 2013: 9).

Project Control Dissertation
Project Control – Roland Wanner

Project Control Risk Planning Initiative

As a manager, it is necessary to initiate the risk planning so that the risks that are encountered in the project can be handled (APM, 2013: 60). The progressive evaluation of the status of the project vividly indicates the risks that the project faces. In addition there is a clear forecast of the future risks that the project might encounter. Therefore, planning for the risk is inevitable in a construction project. The previous projects can be used to evaluate the project risks.

In addition, benchmarking on similar projects can be a useful technique under the EVM control of risks. Moreover, the risk management software can be incorporated to deduce both the cost risk analysis as well as the schedule risk analysis (APM, 2013: 68). This is because the construction project’s completion time is usually scheduled and there is a need to manage the time so that the project does not run behind the schedule. Moreover, the finances and other resources are allocated in a sequential and logical manner. Hence, conducting schedule risk analysis ensures that the project status is as outlined in the baseline project (APM, 2013: 69).

More so, any discrepancies are managed using the appropriate methods that does not cause cost variance. This is because the allocation of finances is done when the project plan is made. Furthermore, the change control management is vital so that the risks mitigation processes can achieve the desired goals of the project (Fleming and Koppelman, 2010: 206).

Controlling the Project Plan and Schedule

As  project manager, it is necessary to ensure that the baseline project and project plan are achievable and useful in supporting the business case. In this regard, the project plan can be changed if the project manger determines that there are shortcomings to its effectiveness and validity. In addition, if there are some external and unplanned forces such as the political instability, the project plan can hence be altered (APM, 2013: 73).

One of the possible ways is the EVM Compass Maturity Model (APM, 2013: 73). This model is necessary as it ensures that capability project control is improved. This is done through rating the progress of the project on a scale of 5 with 5 as the highest score. Therefore, project manager and stakeholders evaluates the EVM attributes such as cost, time, resources, and finances, among others and rate their performance relying on the realistic and evidence based approach (APM, 2013: 73-74). On the other hand, the baseline review is another method that can be used to control the project plan and schedule. The baseline reviews can be conducted by an independent firm hence giving reliable information about the status of the project, the project manager can thereafter act accordingly.

Data trace assessment is another technique embraced under the EVM since all the data carried out in the project is evaluated and a detailed and valid status of the project (Fleming and Koppelman, 2010: 211). In addition, tracing the resources will help in project control as the will safeguard the time schedule of the project. Tracing resources is another technique which shows the progress of the project as it evaluates the distribution of resource within the different areas of the project. This is necessary in ensuring that time is effectively managed as well as ensuring that the resource use is matching their viability (APM, 2013: 75).

Reviewing Collected Data and Acting

Acting on the collected data is vital as the possible and necessary changes for the project are enhanced. Reviewing the schedule performance index determines how far behind or ahead the project is running which enables time management. Moreover, the cost performance index which represents the cost of the earned value to the total costs of the project helps in budgeting trace which controls the finance management (APM, 2013: 80). Comparing the current performance of the project is a suitable way to forecast and plan for the future.

Evaluating EV Reports

The test of project reasonableness can be conducted through evaluating the Earned Value reports. These reports can be produced progressively as the project work advances. The EV reports are vital as they enable the project manager to improve on the management techniques so that the project goals as outlines in the plan are realized (APM, 2013: 90). More so, evaluating these reports ensures the current risks are encountered as well as laying down concrete plans for the forecasted risks.

In addition, setting the cost and variance a threshold ensures the parameters such as cost and schedule of the projects are analyzed effectively (APM, 2013: 105). If the variance or the cost is above the threshold at any given time then there should be drastic changes. The project manager controls the project to ensure that reasonableness is always maintained (Fleming and Koppelman, 2010).

References

Association of Project Management HandBook (2013) Earned Value Management ISBN 13: 978-1-903494-47-9

W Fleming and Joel M Koppelman (2010) Earned Value”, Project Management, Fourth Edition – ISBN – 978-1-935589-08-2

Roland Wanner (2014) “Earned Value Management”, The most important methods and tools for an effective Project Control by Roland Wanner 2014 – ISBN – 978-1500850234

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Costing Methods Financial Essay

Costing Methods

Costing Methods in Financial Management – The globalization resulted in excessive heights of competition which compelled businesses to the concepts of products and prices. The differentiation strategy works well when the companies charge the lowest prices possible for their products. Business organizations can practice the differentiation in their products by working the quality of their products and implementing some of the marketing approaches like after sale services. With that in mind, the business must conduct market research to ascertain the specific market cost of the products and services then they aligned their products upon the established prices.

Therefore, the standard costing methods remain outdated at this point, and business firms installed more strategic costing procedures. Some of these strategic costs applied by contemporary businesses consist of target costing, life cycle costing, and the Kaizen costing. This report seeks to describe and discuss target costing, life cycle costing, and kaizen costing with their examples and make conclusion and recommendations about the application of three costing methods.

Introduction to Costing Methods

The contemporary customer is a vocal consumer who has the market knowledge thereby posing a stiff competition in the market. The increased competition compels companies to embrace marketing strategies which may make them meet the level of competition trend. As a result, to remain relevant companies must redesign their processes to maximize product quality at reduced costs. Company businesses must work with price reduction as a way to remaining gain the market share in a competitive environment. Therefore, for the realization of the above strategies a company cost detection mark it as the better option.

Therefore, cost methods used by the firm act as significant strategic tools for opportunities identifications that guarantee cost reduction and product quality improvements.  The report describes and discusses target costing, life cycle costing, and kaizen costing as the modern cost management techniques which the company can use to sustain a competitive market environment.

Target Costing

The target costing is a modern cost management technique that has ide coverage usage by most managers. According to Cooper, target costing relates to Functional Cost Analysis as well as Value engineering to align the products and services to match the market dynamics (Cooper 2017). The onset of cost management according to this cost method is at the development stage where the product attributes that match the next generation get incorporated with the intention of generating the required return on investment.

The whole process entails market segmentation to identify the most reliable segment to target and customize the products and services to meet the prevailing conditions. Also, the company must study the convenience of the rival firms in the same segment to deliver the same quality at a cheaper cost. The company proceeds to the next by filtering its activity which is relevant for the delivery of the already established product attributes.

With that in mind, the identified relevant activities are subject to costing to gauge their total costs against the anticipated returns. In the event of any variation, functional costing and value engineering get into play for cost reduction strategies to get employed without compromising the required product quality. The latter process gets continued in line with the market pricing spirit until the best cost is established then the company proceeds to invest in the production of the product required (Talebnia et al. 2017).

Furthermore, functional Cost Analysis together with the Value Engineering techniques help the inter-processes teams to creatively identify the best ways to install the alternative cost reduction product designs without charging the recommendable market features of the product (Talebnia et al. 2017). This is important when analyzing costing methods in the management of finace.

Also, for the company to achieve the maximum value engineering techniques, the company must go through two significant steps by performing some of the radical design changes at the development stage so long as the product is capable of delivering the required service. Second, the use of different design teams may get considered for cost reduction purposes (Talebnia et al. 2017).

According to hart, target costing offers the following advantages to any committed firm (Cooper 2017). First, helps the management with the required knowledge to the development of products and services that are market-oriented through the firm’s strategic objectives, they develop products are following the tastes and preferences of the customer regarding functionality and the delivery method.

Second, it forms an essential element of product development teams, while giving products that are flexible to dynamic costs and life cycle changes and services that are relevant in their application context.

Third, the target costing supports activity-based costing through well-presented costing data during the specific developmental stages. Finally, target costing provides market-driven product features by ascertaining the use of simple, relevant, and user-friendly products. The development teams use simple language to prevent time wastage during costs evaluation (Cooper 2017). 

Life Cycle Costing

The method of life cycle costing considers not only the initial cost of a company asset but also the costs involved over the useful life cycle of the same assets for a rational investment decision (Moreau & Weidema 2015). The life cycle technique confirms the significance of valuing the asset by considering the total ownership costs to provide a viable management decision making. The information about the whole life cycle of an asset can offer some insights such as; future required resources, investment evaluation, and supplier appraisal, resources accountability, improved system design, and asset economic life assessment.

The complexity of the asset in the question determines the kind of life costing approach to get applied, and the annual costing can ask directly approach as opposed to complex computerized processes of future costing. The life cycle costing involved the analysis of the entire asset life span cycle by considering the initial acquisition costs, operating costs, loss of failures, repair cost, preventive costs, and maintenance costs. Other expenses include interest rates, depreciation, present value, and discount rates.

According to Nasik, the life cycle analysis is possible in a spreadsheet with the fair, necessary cost values because it only entails adding up of the respective costs and other rates like discount and interest (Daylan & Ciliz 2016). The costs involved by finding the summation of all the expenses are deterministic, on the other hand, some values are probabilistic like costs concerning the asset reliability and maintainability (Daylan & Ciliz 2016).

The project manager has the responsibility of assessing the present asset condition, the budgeted value for the purchase of the asset, historical background to define the best alternative asset the company may consider worth the investment with the assurance of service delivery beyond the expected levels (Moreau & Weidema 2015).

Therefore, the making it possible for a rational decision concerning capital and expenditures, prioritize every company projects regarding total costs of ownership, and build management confidence when doing their report to major company stakeholders. Life cycle cost analysis also boosts management morale since the analysis assists in project validation calculation, risk reduction strategies, and consistent ways of project evaluation.

The asset life span starts immediately during creation planning to the time of disposal (Daylan & Ciliz 2016). For example, the asset passes through some stages such the concept definition, development of the design features, features specifications and documentation, manufacturing, the awarded warranty duration, and utilization stages. The other steps during the operation include maintenance and finally disposal.

Most importantly, is the strategic and periodic asset life span cycle which always commenced at the strategic planning, the asset formulation, operations level, asset in house maintenance, possible rehabilitation, and finally disposal. The life cycle of the asset is subject to necessary maintainability, technological developments, and the dynamic nature of the operational requirements are the few factors that may influence the life span of an asset (Moreau & Weidema 2015).

Costing Methods Financial Management
Costing Methods Financial Management

Kaizen Costing

The kaizen has its roots from the Japan where the knowledge of continuous improvement originated. According to Hert, the target costing planning process is compatible with the kaizen process in the production stage while firms which concentrate more on the shorter life cycle products usually use the target charging planning instead of combining the two charging methods (Kaplan & Atkinson 2015).

On the other hand, most of the companies with a complex life cycle practice kaizen during their operations at different stages of target costing to get products which are relevant to all generations. Kaizen holds every business organization player to get responsible and embrace never ending the quest for quality improvement through constant job processes evaluation.

All that this method need is just embracing the organization culture whereby all company processes get interconnected in a way that promotes learning from each other on the cost reduction strategies and quality improvement. As a result, kaizen is more aligned with knowledge sharing among the team members with the sole objective of enhancements. The kaizen costing holds the mighty aim of showing the management direction on how to apply the kaizen costing to ascertain a culture of continuous improvement across the organization (Mena et al. 2018). 

In the field of management accounting, kaizen assists firms to gain a competitive edge as it helps the management to do an appraisal to its strategic plans, activities, and long-term operations goals (Mena et al. 2018). With that in mind, the activities such as increasing company improvements, the permanent cost reduction along the production line, and ever diligent in the product design and development stages help the active management to reduce wastes and costs during production. Therefore, the output from the company processes meets the required quality to guarantee customer satisfaction at affordable prices in the market to make the company competitive.

Kaizen differs with the target costing in that the target costing involves product development stages while kaizen comes in during the manufacturing stage to eliminate wastes and reduce costs along the manufacturing lines. Furthermore, the kaizen uses the value analysis method in the form of value engineering to ascertain cost reduction at each process level. Notably, kaizen stresses the improvement in quality and cost delivery through the controlling the product market cost, timely delivery, and distribution.

According to Mark adults, the kaizen profits by getting the difference between corporate management projected profits and lower control expected profits (Kaplan & Atkinson 2015). For a company to achieve the benefits through kaizen costing it must install kaizen costing teams in every department to assist in planning, monitoring, and an evaluation of the processes.

Second, the target charging team must work hand in hand with the kaizen team for compatibility of refined product attributes with the set manufacturing kaizen standards and any variations in kaizen costing must get reported in time to the relevant authority for expert action. Third, the culture of continuous improvement gets supported by active channels of communication across the entire company.

The kaizen principles must get formal communications for kaizen costing information dissemination. Finally, the management ought to establish an evaluation method to gauge the kaizen success on a yearly basis and make the necessary adjustments (Mena et al. 2018).   

Costing Methods Conclusion

The three costing methods are very vital for any business organization to remain competitive in the contemporary market. They help in aligning the products and services offered with the requirement of the dynamic and volatile competitive current markets consisting of a knowledgeable consumer. The knowledge of target costing assist the design and development teams to come up with designs that are generational oriented after thorough market analysis.

The market segmentation helps the team to understand profoundly different needs of a different category of consumers. Also, life cycle costing is an important in management accounting because the methods help the organization concerned with asset acquisition the required knowledge for charging the asset ownership costs, supplier evaluation, and the general company projects evaluation skills.

Moreover, the life cycle helps the procurement and costs expert to acquire the relevant production machines at fair prices. Finally, kaizen costing is an equally more important approach that ascertains reduction of wastes and unnecessary cost along the production lines and, therefore, verifies quality products at affordable market prices. The combined knowledge of the three methods of costing makes a company to gain a competitive advantage in the global markets and assure sustainability.

For the organizations to apply the three costing methods successfully, they need to integrate the accounting knowledge with the strategic management approach thinking for effective internal control systems. Also, the company must work on its both inbound and outbound logistics, production policies and procedures, distribution channels, and marketing strategies like after sales services to offer it a better market advantage over rival firms. Therefore, the successful application of cost management strategies needs an effective and efficient supply chain management.

References

Cooper, R. (2017). Target costing methods and value engineering. Routledge.

Daylan, B., & Ciliz, N. (2016). Life cycle assessment and environmental life cycle costing analysis of lignocellulosic bioethanol as an alternative transportation fuel. Renewable Energy89, 578-587.

Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting and Costing Methods. PHI Learning.

Mena, C., Van Hoek, R., & Christopher, M. (2018). Leading procurement strategy: driving value through the supply chain. Kogan Page Publishers.

Moreau, V., & Weidema, B. P. (2015). The computational structure of environmental life cycle costing. The International Journal of Life Cycle Assessment20(10), 1359-1363.

Talebnia, G., Baghiyan, F., Baghiyan, Z., & Abadi, F. M. N. (2017). Target Costing, the Linkages Between Target Costing and Value Engineering and Expected Profit and Kaizen. International Journal of Engineering1(1), 11-15.

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Emerging Markets Project

Emerging Markets

The contemporary world economy gets its support from the phenomenon of the emerging markets and its consequential development of emerging markets multinationals (MNCs) (Sinkovics, et al. 167). The new re-engineering of the modern economic and political order is as a result of the state of international emerging markets that is much conspicuous in the recent past. According to the international business, the term emerging markets get referred to nations that are in constant motion and also have the capability of gaining a significant economic and political power (Cavusgil, Tamer, et al. 40).

The emerging economies showed the ability to endure a recession that bypasses even the major economies during the Financial Crisis that the world faced at the primary stages of the new millennium. They include the best emerging 20 (E20) countries selected based on their recorded GDP, the population, and the overall influence on both regional and international trade (Cavusgil, Tamer, et al. 46). For example, the E20 consists of Brazil, Chile, China, Argentine, Poland, Colombia, Saudi Arabia, South Africa, Malaysia, Mexico, Thailand, Russia, Philippines, Republic of Korea, South Africa, Turkey, Indonesia, India, Nigeria, and Iran. This report aims at examining the emerging markets from the E20’s enhanced economic growth, the ever-growing influence across the world economies, and increased technological advancements.

Emerging Markets and Economic Growth

The E20 savings are known to be dominated by a substantial and rapidly growing number of people. According to world census conducted recently, emerging markets population account for 50% of the total four billion estimated world population. For example, in a comparative perspective, 18% of the world’s population stays in OECD nations; an approximated 11% lives across the G7 countries which also recorded yearly population growth of a rate of 0.0051 of the total population (Cuervo-Cazurra, Alvaro, and Ravi Ramamurti 230). On the hand, E20 nations are also prone to an increase in annual population by 0.01 (Sinkovics, et al. 169).

Also, demographically, emerging markets consist of a community of the young generation who are at their prime ages. Even though the youths are demanding regarding the money allocated to the education and higher learning institutions, they act like a source of wealth to a country. For example, a learned young generation provides skilled and advanced technical know-how to their economy, the source of cheap labor to the available industries, and a potential market for the ready manufactured goods and services. Conversely, in the United States, Japan, and Europe the majority comprises of working age population. 

A nation with working age as the majority is at crossroads since the working age has the capability of ether impact the economy positively or negative (Cuervo-Cazurra, Alvaro, and Ravi Ramamurti 230). For instance, a country with a majority of working age must have implemented a beneficial education and healthcare system because the working class is aging very fast and the possibility of an increased dependency ratio. However, some of the E20 countries showcased an age structure that consists of a rapidly aging population such as China and Korea. Nevertheless, E20 states still well placed to have a productive working force that other developed economies (Cuervo, Alvaro, and Ravi 230).

Integration into the international Markets

With the high population in E20 countries, there are readily available markets for the produced goods and services (Hill, Charles, et al. 77). According to world consumer research conducted in 2010, the United States and Europe take the lead in the world consumer market. However, there is the likelihood that Asia will overtake them by 2030 due to rapidly growing emerging economies. The recent paradigm shift indicates how emerging economies are gaining firm ground across the international market arenas.

E20 countries learned a lot of world market influence between the early year 2000 and 2015 by a margin increase of approximately 6%. However, E20 nations have suffered currency volatility for not less than twenty years, which was worth declared a crisis among them. For example, Mexico, Asia, Russia, Argentina, and Brazil were the witnessed victims in the late 1990s. Fortunately, the emerging markets with the firm ground established in the contemporary international economy have the upper hand to maintain their positions (Hill, Charles, et al. 79). 

Furthermore, the emerging markets have increased their total exports to the world markets averagely 20% and that some countries stand as major commodities exporters. Emerging countries are the majority of the states with the most significant manufacturing products applying the advanced technology. For instance, China, Korea, and Malaysia use the highest technology in manufacturing their exports and that they also enjoy the lion’s share of FDI, therefore raising their international investments. The economic growth resulted in a well-consolidated world economy that boosted technology and innovation knowledge (Brannen, Rebecca and Susanne 141).

Technological Advancement in Emerging Markets

Growth and development of a nation must get measured by the level of technology and innovation present. Initially, high technology and innovation was only a reserve for the developed countries. However, in the current days, emerging economies have concentrated their efforts to improve their technological know-how through boosting research and development sector by providing resources and human capacity by embracing the right education system (Hill, Charles, et al. 79).  For instance, innovation improvements have greatly addressed the local problems to match the general atmospheres in the already developed countries.

Innovative cultures in emerging economies contributed to the development of new technology in the banking industry, telecommunication, and to the overall savings which not only benefited the locals but also spread to the rest of the world (Peng, Mike, and Sergey 12). Therefore, the emerging markets end up pioneers of some world innovations and technological advancements.

Emerging Markets Project
Emerging Markets Project

The E20 countries paid much attention in research and development funding both public and private sectors of the economy. Research and development are significant indicators of technology and innovation in any economy of the world (Peng, Mike, and Sergey 19). For instance, Korea and China are the leading nations which took more significant strides in R&D followed by Turkey and Malaysia.

Moreover, the emerging economies witnessed to embrace the right education system that promote innovative talents and that they use the most significant art of public expenditure on education. For example, Argentina, Mexico, South Africa, Malaysia, and Brazil were among the emerging nations with the highest education allocation. The E20 countries take education seriously since it is the critical factor that influences the full and sustainable economic growth.

Globalization

The emergence of interconnectivity of world nations through cooperation laid a firm ground for the emerging economies (Brannen, Rebecca and Susanne 139). The world’s economic and political order experienced a paradigm shift where countries were aiming to form multilateral cooperation resulting into formation of world developmental institutions like development bank and Asian Infrastructure Investment Bank and International Monetary Fund. The establishment of the last global institutions facilitated the emerging market’s contribution in global affairs, international trade, and investment (Brannen, Rebecca and Susanne 141).

Conclusion

The emerging economies managed to transform the global economy by constant and robust economic growth and the trend seeming to continue because of some reasons identified by this report. First, the emerging economies have both principal actors and regional powers than developed nations. Second, the majority of the emerging markets anchored the economic development on the right pillars such as technology and innovation.

Finally, these emerging economies enjoyed the current world readiness for international cooperation. Despite the possible challenges that particular emerging economy shall experience, there rise in general marked a milestone in the global landscape.

Work Cited

Brannen, Mary Yoko, Rebecca Piekkari, and Susanne Tietze. “The multifaceted role of language in international business: Unpacking the forms, functions and features of a critical challenge to MNC theory and performance.” Language in International Business. Palgrave Macmillan, Cham, 2017. 139-162.

Cavusgil, S. Tamer, et al. International business. Pearson Australia, 2014.

Cuervo-Cazurra, Alvaro, and Ravi Ramamurti, eds. Understanding multinationals from emerging markets. Cambridge University Press, 2014.

Hill, Charles, et al. Global Business Today Asia-Pacific Perspective. McGraw-Hill Education, 2017.

Peng, Mike W., and Sergey Lebedev. “Intra-national business (IB).” (2017): 241-245.

Sinkovics, Rudolf R., et al. “Rising powers from emerging markets? The changing face of international business.” 0969-5931 23.4 (2014): 675-679.

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