Home > Free Essays > Business > Decision Making > High-Tech Corporation Decision Making
Cite this

High-Tech Corporation Decision Making Essay


Introduction

High-Tech Corporation (H-T) is a huge computer manufacturer with a long history. Nowadays, the organization hires more than 300,000 employees and rates among the major manufacturers of computers, hardware, and software, as well as computer-associated services (Bhimani, Horngren, & Foster, 2008). High-Tech Corporation has several plants that are engaged in different types of production (Kunda, 2009). One of them is located in Essenes, France. It manufactures logic and memory chips made of silicon wafers that are sliced from a silicon cylinder. The production at the plant is almost never interrupted: it works 24 hours a day, seven days a week, and 52 weeks a year (Heisinger, 2009).

Analysis

The major recent objective of the organization was to assign costs in such a way that the quality of the output products would be maximized whereas the number of spoiled chips from each cylinder would be decreased. In order to identify what could be done to reduce wastes, the company started with a comprehensive survey of its employees. The managers of the organization believe that job satisfaction is one of the most influential factors in production as the more content employees are the more likely they are to pursue the goals of the organization (Drury, 2013).

Since the questionnaires identified stability as the major value of employees, the leaders of the company decided that it would be more cost-saving to rely upon a fewer number of highly professional workers who would show better performance due to the feeling of satisfaction and stability that it would give them (Kaplan & Atkinson, 2015).

Thus, the decision was made to reduce the costs connected with the employees’ salaries and space occupied by the plant. The planned charge-out rate for an information system (the salaries of the employees, accounting costs, and expenses connected with the mainframe central processing unit) was $10,000 per hour, for utilities (repair works, electricity, running water, fuel, taxes on property) – $20,000 per square kilometer, for maintenance (machinery repairs) – $80 per labor hour, whereas for a quality guarantee – $52,000 per person.

The time period for the plan implementation covered 5 years. Over this period, the organization reduced the number of buildings occupied by the plant and offices by 60%. The number of employees was reduced by 40%. The relevant costs for this decision included the costs of new equipment (that was required to substitute for the human labor and to facilitate the process) as well as the increased costs of old machinery repairs required for the same reason.

The reorganization costs that appeared as a result of reduced office space (necessitating redistribution of the available area) can also be attributed to relevant. The non-relevant costs included employees’ salaries and non-financial incentives (as they could not be avoided by canceling the decision). As a result of the measures taken, those who continued working for the corporation had to boost their performance in terms of quality and productiveness as the newly created environment was highly competitive. Over the above-mentioned period, the production increased by 100% whereas information, utility, and maintenance expenses decreased by 5% up to 20% (for a considerable part, due to savings on maintenance costs as the machinery was new or repaired) (Bhimani et al., 2008).

Conclusion

The following implications can be made based on the results (Bhimani et al., 2008):

  • employee satisfaction is one of the key factors in production;
  • the increased competition is a powerful non-financial incentive;
  • larger premises are fraught with higher expenses;
  • investment inexpensive modern technologies pays back over a relatively short period of time allowing to save on maintenance;
  • relevant costing is a useful tool that can be implemented to make short-term financial decisions (Hansen, Mowen, & Guan, 2007).

References

Bhimani, A., Horngren, C. T., & Foster, G. (2008). Management and cost accounting. Upper Saddle River, NJ: Pearson Education.

Drury, C. M. (2013). Management and cost accounting. Berlin, Germany: Springer.

Hansen, D., Mowen, M., & Guan, L. (2007). Cost management: accounting and control. Boston, MA: Cengage Learning.

Heisinger, K. (2009). Essentials of managerial accounting. Boston, MA: Cengage Learning.

Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting. New Delhi, India: PHI Learning.

Kunda, G. (2009). Engineering culture: Control and commitment in a high-tech corporation. Philadelphia, PA: Temple University Press.

This essay on High-Tech Corporation Decision Making was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.

Need a custom Essay sample written from scratch by
professional specifically for you?

Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar

301 certified writers online

GET WRITING HELP
Cite This paper

Select a referencing style:

Reference

IvyPanda. (2020, October 7). High-Tech Corporation Decision Making. Retrieved from https://ivypanda.com/essays/high-tech-corporation-decision-making/

Work Cited

"High-Tech Corporation Decision Making." IvyPanda, 7 Oct. 2020, ivypanda.com/essays/high-tech-corporation-decision-making/.

1. IvyPanda. "High-Tech Corporation Decision Making." October 7, 2020. https://ivypanda.com/essays/high-tech-corporation-decision-making/.


Bibliography


IvyPanda. "High-Tech Corporation Decision Making." October 7, 2020. https://ivypanda.com/essays/high-tech-corporation-decision-making/.

References

IvyPanda. 2020. "High-Tech Corporation Decision Making." October 7, 2020. https://ivypanda.com/essays/high-tech-corporation-decision-making/.

References

IvyPanda. (2020) 'High-Tech Corporation Decision Making'. 7 October.

More related papers