response 5

Question 1

Read the article that is attached concerning the Theory of Constraints and comment on the following questions:

1. How might the theory of constraints be implemented in a Lean organization? How about in an Activity Based Management organization?

2. How does the Theory of Constraints relate to continuous improvement?

3. One complaint about the Theory of Constraints is its short term focus. Do you feel this is detrimental? Why? Is there a way to give it a more long-term focus?

4. What is your reaction to the concept of all costs other than direct materials are fixed?

Respond to this… The theory of constraints could be implemented into a Lean organization with it’s significantly useful ability to prioritizing improvement projects. By doing this, a company would have increased effectiveness in manufacturing by eliminating waste in areas of the system that have large constraints on opportunity and profitability. The implication of the theory of constraints in the Activity Based Management organization would be different as it is a long run process while TOC is a short run process to gain overall improvements quickly.
The Theory of Constraints relates to the continuous improvement will cause improvements but not to the important aspects needing attention for business. The disadvantages to the short-term focus that the Theory of Constraints has caused for a quick fix but not a lasting fix. It is detrimental in the ability to give the company time to adjust to the new procedures without reverting to the old ineffective ways. I think that having all costs aside from direct material fixed is a good way to keep numbers from fluctuating making it easier to control when production is increasing.

Question 2

The International Accounting Standards Board (IASB) website is a great resource to keep on top of International Standards. Navigate to the IASB's website and locate IFRS and IAS Summaries. Select one of the IFRSs and read through it. In your discussion, share a brief summary of your chosen IFRS and suggest how its implementation would impact U.S. financial reporting.

Respond to this… The IFRS 16 leases are changes that were implemented to make changes to the previous IFRS 17 leases and will be taking effect in one year and some months to come. As a result, IFSR is reminding the companies to start designing strategies that will be put in place while documenting the annual report, with specific reference to the leases segment. There will be costs due to reassessment in companies that will have failed to implement the changes before the set deadline. IFRS submitted this in writing as a reminder to the companies (IFRS, 2017, January, pp: 1-4).

The implication to the American companies is that changes in lease contracts might start taking effect as soon as possible with the big companies that are more strictly required by the US government to embrace IFRS for transparency. Some small compliant companies might join in the assessment of lease agreements, more especially the ethical IFRS compliant ones. As a result, resetting of prices by the leasers might occur, given a chance to review the terms of the agreement through a “grandfather” lease policy review is still allowed, at a fee after the deadline. This means some ethical leasers might stick to their pricing strategies.

Why the changes will affect the US is because, in some regions such as the New York, housing has been going up in prices, regardless of the depreciation value. It is expected that the lessee, given that it is a company adhering to IFRS standards, should incorporate a depreciation report on the financial statements. This means that the leaser will need to increase the lease value to cover for costs due to the depreciations, to avoid losses. However, in the US, with the new government that is reactive, we are not certain if it will be proactive with this case before implementation. It has shown signs of cutting strings with the global community, but judgment and predictions of what it will do about IFRS 16 cannot conclusive be made yet.

References

IFRS. (2017, January). Leases one year on—putting IFRS 16 into practice.

Leases one year on—putting IFRS 16 into practice, 1-4. Retrieved from http://www.ifrs.org/Pages/default.aspx

Question 3

For the past couple of years Google has been reported being the number one company to work for in Fortune magazine. What makes working for Google so great you may ask? One thing in particular that catches the eyes of many is the fun-filled working environment. Having a climbing wall, pool table, swimming pool, beach volleyball court, weight room, and eleven free gourmet cafeterias, sure doesn't hurt in your strategizing in becoming the best.

Do you feel that a fun working environment is important when seeking a job? Explain. Research the topic of fun and humor in the workplace and identify some of the pros and cons of this strategic choice.

Respond to this… “If people are having fun, they’re going to work harder, stay longer, maintain their composure in a crisis and take better care of the organization” (Gostick & Christopher, n.d.). When people are having fun at work—generally an environment that can cause stress—they’re less likely to feel pressure and the repercussions that come with stress. Fun in the workplace can promote friendships; people who are having fun are less liable to focus on time and more likely to increase their productivity; fun at work can also decrease employee turnover. A fun work environment has numerous benefits.

With all of the advantages that come from having a good time at work, it’s important to remember that there are also negatives. Everyone has a different idea of what fun is. Some feel that fun is making jokes and laughing, others think fun comes from occasional events, and others find the hours after work to be fun. Fun at work is usually more enjoyable when it occurs naturally, as some people don’t feel that it’s very “fun” to have fun enforced on them. Some individuals may take it too far when joking around, and that could lead to hurt feelings, especially if the jokes become personal or insensitive. The jokes could cause individual team members to feel uncomfortable, for instance, if the jokes get too vulgar or are aimed at one person. Fun at work could cause employees to become less focused on the task at hand, rather than more productive. Additionally, if customers are around while staff is joking around and having fun, it could give those customers the wrong impression. It’s important to note that fun and humor at work is great for the environment; however, too much fun can get out of hand and the workplace should be recognized as a serious place before it’s perceived as a place for fun and humor.

References

Gostick, A., & Christopher, S. (n.d.). Why fun at work matters. Retrieved from
     https://www.monster.com/career-advice/article/fun-at-work-matters-levity-effect

Sravani. (2015, October 23). Fun and humor in the workplace: 16 pros and cons.
     Retrieved from http://content.wisestep.com/
     fun-and-humor-in-the-workplace-pros-and-cons/