Page 199 - DCOM206_COST_ACCOUNTING_II

Cost Accounting – II

Notes
Table 11.2: Information needs by Level of Organisation
Characteristic Top Management Middle Management Operating Management
Planning focus Heavy Moderate Minimum
Control focus Moderate Heavy Heavy
Time frame Long-term Short-term Day to Day
Nature of activity Unstructured Moderately structured Highly structured
Level of Many open variables, Better defined variables Straightforward
complexity complex
Result of activity Mission, Goals, Action Plans End products and
Objectives services

Example: Examples of external information are:

1. Demand for new products or services.
2. Information describes customer satisfaction with products and services. Information
describing change in policies of suppliers.

3. Knowledge of promotional campaigns, price changes, or products planned by competing
firms.
4. Details of changes in government regulations.

In many instances, firms have to provide information to external users. Some of these are:
1. Prices of items and services offered (to customers)
2. Quantity of items needed for manufacturing (to suppliers)
3. Sales revenues and profit earned (to the government).

!
Caution Only an effective information system can provide managers with both internal
and external information that is timely and accurate.

Figure 11.1: Different levels of Information Systems

Senior level
managers

Executive Information
System
Middle level managers
Decision Support System or operating level managers
Marketing Information System
Office Automation System

Transaction Processing System Front end personnel

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