Reference no: EM132606005

AYN 506 Accounting for Strategic Decision Making - Queensland University of Technology

The Case Study - Target Costing Decisions at BMA AG

Purpose of assessment

This assessment will help develop your critical thinking regarding the design and use of management control tools. Specifically, it will allow you to demonstrate a knowledge of organizational problems that surface when using Target Costing. You will be required to design a convincing Target Costing system, supported by strong arguments and management research. In the reports that you write, you will have to give consideration and demonstrate an understanding of socially responsible behaviour in how you address the Target Costing problems the case study firm is facing, giving particular consideration to their international business context.

Description of the task

This is a Target Costing assignment. The weight of the group assignment is 30% of your final grade. In this document, you will find instructions for the assignment. Please note that this case study will focus on decision-making and target-costing concepts. You will not be preparing detailed target costing calculations.

The group assignment has a word length of 4,000 words.

Once you have read the case, you should complete the following requirements:

1. Report 1:
Read pages 1-5 of the case study. The 3C4 project team manager had asked Tim to explain BMA's target costing system during the next meeting. Tim intends to give a presentation at the meeting to explain BMA's target costing system, but he has also asked your team to write a report to give to the project manager. Your team is required to write that report that describing target costing and explaining why target costing at BMA differs from that at KeyHole Schloss.

2. Report 2:
Read pages 5-12 of the case study. The same team has been charged with the task of redesigning BMA's target costing system. The team has been asked by Tim to write a report that evaluates the current system and outlines some ideas about how the system could be redesigned. The report is to be distributed amongst the New Product Development project managers. In the report that you write you should consider:

(a) What are the concerns that Laura Forseback and Tim have about the system, and how do you think the system could be better designed to address those concerns? For instance, what kinds of changes could be made to ensure that project managers make better decisions about sharing or not sharing parts? Are there are cost savings or possible cost increases due to parts sharing? To answer this question, you should consider how the current target-costing system creates incentives for project managers to make decisions about sharing/not sharing parts that are not necessarily in the best interests of BMA overall. What other kinds of changes should BMA AG consider (e.g. organizational, information systems)?

(b) BMA AG c-suite executives are becoming increasingly concerned about sustainability. Are there any sustainability concerns that the organization needs to consider in using target costing to inform their decisions? Note that BMA production facilities are located all over the world.

PART C: Professional communication

You will be assessed on your ability to communicate effectively and professionally in written form. You may wish to use photos (with references), diagrams etc. to improve the visual presentation of your reports.

PART B: Individual

Purpose of assessment
The success of any team depends on a range of interrelated components. Lin, Standing and Liu (2008)'s integrated model of virtual team effectiveness identifies these components and demonstrates the relationships between them. Reflection on how these components relate to your team's experience of the Group Report project will help you continue to develop team work skills that are essential in the workplace.
Description of the task

First, complete the team reflection survey (see Appendix 1). During the survey, you will assess your team's and your own behaviours against the six components identified by Lin et.al (2008). As you complete the survey, you may notice that your team dealt with some components more effectively than others.

Next, write a brief, 500-word reflection of your teamwork experience in relation to three (3) of the components of Lin et al's (2008) model. Your report should discuss at least one component that you think your team did well; and two components that you think your team could improve on. For example, you may think your team did well with Relationship Building, but that Communication could have been better. You should in your reflection consider some of the challenges that you experienced working in a ‘virtual' team.

What needs to be covered in the reflection?
For each of your chosen components:
• Briefly identify the component and describe its main characteristics.
• Illustrate your understanding of the component by linking it to at least one example
of your team's behaviours.
• Explain how the team's behaviour/s contributed to or detracted from your team's
performance; more than one component of team work may have been impacted.
• Apply your understanding to hypothesise how you can modify your own behaviour or positively impact on team behaviour to support teamwork in the future.

Attachment:- Accounting for Strategic Decision Making.rar