Tuesday, May 5, 2020

Accounting for Strategy Management and Control

Question: Discuss about the Accounting for Strategy Management and Control. Answer: Introduction: In the year 2008, Volkswagen decided to introduce diesel-fuelled cars, since then it has paved the way for several scandals faced by the company. The companys main risk was seen in terms of the breaching of the countries rules related of the pollution control and environmental laws. This was directly evident from the emission scandal, which took place in the late 2015. The main scandal was seen in tem of the breach of the environmental laws of United States Environmental Protection Agency (EPA). Hence, the main risk was associated to legal risk, which was imposed on the car company by the respective council for the environmental laws. In the year 2013-2015, more than 580000 owners of Volkswagen were on the verge of facing longer-term challenges (Schiermeier, 2015). According to Burki (2015), the risk associated was related to the depreciating value of the used cars. The second risk of the company was mainly seen in the emissions of NOx, European Environment Agency, saw the death of 500000 people in Europe due to poor quality of air (Barrett et al., 2015). The scientific data collected gave a clear picture of the nitrogen oxide in environmental concentrations related to the people. The third risk was seen in terms of the getting an approval on the performance and fuel efficiency of the cars. The risk calculator has determined the risk statement with the level of risk. It has been able to present the rationale determining the each risk component to be high, medium or low. The risk calculator has been shown below as follows: Risk Exposure Calculator Risk area Risk Rating Notes Growth 1. Pressure imposed by the company to meet the target 4 As per the message given by the sales executive, there was immense pressure on the company to be on the top. 2. The Growth rate of the company in the year 2015 2 The value of the company plummeted as the company embroiled into the scandal. The global sales fell by 2% following the aftermath of the scandal related to the Carbon dioxide emission. Thereby breaching the laws of several environmental protection agencies (Hotten, 2015) 3. Experience level of people at Volkswagen 3 The lacks of experience among the engineers has led to several controversy in the past. The controversies are directly related to the CO2 emissions. This is relevant to the up gradation of the manufacturing of the engines as the environmental laws imposed by the different countries (Ruddick, 2015). Culture 1. The amount of potential rewards given to the people involved in the business which is as a result of the entrepreneurial risk 4 The rewards for the entrepreunial risk are seen in terms of long-term incentive, annual appraisal and enhancement in the employment security (Sustainabilityreport2013.volkswagenag.com, 2016). 2. The nature of senior management to avoid hearing bad news 2 It has been clearly stated in the given case study that Martin Winterkorn was a demanding boss who did not like failures. The style of the management-fostered fear among the employees as it was authoritative in nature. On a handful of the executives dared to approach Winterkorn. 3. The need for friendlier grievance redress system 1 Information Management 1. The intricacy level of the information needed to run the business 4 The various types of the operation related to the manufacturing process of large diesel bore engines for marine and stationary applications, turbochargers, turbo machinery (steam and gas turbines), compressors and chemical reactors. The intricacies are also seen in terms of the application vehicle transmissions, special gears related to the car(Kretchmer, 2015). 2. How are the amount of gaps involved between the information actually needed and the information actually available 4 Due to limited engagement of the higher management with the employees of the organization there is a high amount of gap observed for the redress of the employee problems (Thompson Kottasova, 2015). 3. The amount of decisions taken by the company who are not a part of the core team 1 The company makes sure that the critical operations are carried out by only those individuals who are a part of the core team of the company Total (out of maximum 45) 25 The technical roles are seen in terms of the application of the budgets that will help the company with better cost management and cost control. The various types of the other technical roles can be seen terms of the application and the usage of the techniques such as Activity Based Costing, traditional costing, economic value added and shareholders value added. The economic value added is shown below with an example given below The application of the aforementioned tools will help the company in better assessment of cost management and cost control. Another technical aspect can be seen in terms of the company is getting a fix in terms of the software but this would not solve the problem of getting an approval for the cheaper variety of the cars. It has been also observed that the installed TDI device in the different types of the 11 million cars across the USA and Europe and was only detected by a group of scientists when the cases related to the discrepancies around the emission level of Volkswagens diesel car products were on the rise (Ewing, 2015). Some of the social aspects included in the study can be demonstrated with the application of the disclosure of the budgets. The use of Budgets acts as an useful tool because it can be used to motivate employees or staff at Volkswagen. At the same time, budgets are issued, because it creates other issues such as fraud risk analysis and budget slack. Some of more noted social aspects can be seen in terms of giving an augmented focus on the CSR activities and adopting a strategy circumvent emissions control for curbing the problem at highest levels. Reference List 2.bp.blogspot.com. (2016). [online] Available at: https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj46avIjRSYRYRPzDxwdvCnZUuG-j0WzjDJseLb1Fv8qXWM4gn-n3yeZEQhaFz7nt_31JbMMS72AGOy598NCmngrWm-dJD0kZGKKsrrsMmtVzFY-pzpBfVi0quHsk6D-rWjY5MuXFXCQljs/s1600/Earned_Value_analysis_chart.jpg [Accessed 11 Dec. 2016]. Barrett, S. R., Speth, R. L., Eastham, S. D., Dedoussi, I. C., Ashok, A., Malina, R., Keith, D. W. (2015). Impact of the Volkswagen emissions control defeat device on US public health.Environmental Research Letters,10(11), 114005. Burki, T. K. (2015). Diesel cars and health: the Volkswagen emissions scandal.The Lancet Respiratory Medicine,3(11), 838-839. Ewing, J. (2015). Volkswagen Says 11 Million Cars Worldwide Are Affected in Diesel Deception.The New York Times,22. Hotten, R. (2015). Volkswagen: The scandal explained. BBC News. 10 December 2015. Kretchmer, H. (2015). The man who discovered the Volkswagen emissions scandal.BBC News. Ruddick, G. (2015). VW admits emissions scandal was caused by whole chain of failures.The Guardian. https://www. theguardian. com/business/2015/dec/10/volkswagen-emissions-scandal-systematic-failures-hans-dieter-potsch. Accessed February,26, 2016. Schiermeier, Q. (2015). The science behind the Volkswagen emissions scandal.Nature News,25. Sustainabilityreport2013.volkswagenag.com. (2016).Performance and Participation | Volkswagen Sustainability Report 2013. [online] Available at: https://sustainabilityreport2013.volkswagenag.com/people/performance-and-participation [Accessed 11 Dec. 2016]. Thompson, M., Kottasova, I. (2015). Volkswagen Scandal Widens.CNNMoney, 22Sept.

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