The pressures of globalization, technology advancements, and business volumes continue to affect the frameworks applicable to decision-making in business. The Alhato (2023) paper offers a focused analysis of management accounting research and demonstrates managerial accounting usage in Middle Eastern nations. As shared by Alhato (2023), the currently available research focuses on various aspects, such as how businesses react to change management and the selection of substitute management methods, tools, and systems. Traditional accounting management, such as variance analysis and financial-based performance measurements, gives in to contemporary accounting because of information technology, competitive environments, economic recession, and new management accounting practices. In Jordan, most companies’ active-based costing forms the bulk of their management accounting. However, many companies in the country continue to shun activity-based costing because of uncertainties, practicalities, and costs involved in obtaining the information. Management accounting practices (MAPs) in Romania are considered low importance. They include benchmarking, target costing, strategic costing, zero budgeting, and just-in-time costing. Most of the firms shunning the MAPs are in the SME segment, and these firms cite the high cost of implementation, time-consuming, and financial constraints. Both countries used budgeting extensively to control expenses and plan cash flow. However, using MAPs like value chain, activity-based costing, and balanced scorecard remains limited in both countries. There is knowledge about the practices, but other constraints prevent integrating the practices for decision-making. Lastly, although Alhato (2023) focused on the Middle East, the research also includes information on Romanian companies in the European Union.
Reaction
Despite the knowledge of modern managerial accounting practices, which should help streamline decision-making and enhance organizational effectiveness, there is evidence of the need for more use of these practices. Therefore, knowledge alone is not sufficient. Besides teaching organization leaders how to benefit, there must be adequate demonstrations and the breakdown of managerial accounting systems to allow for easy integration. The reality for most companies will be that they have to work within budgets even for systems and practices they hope to lower their costs. Thus, as highlighted in the article, financial constraints remain the biggest hindrance to effective decision-making at organizational levels when these firms embrace modern managerial accounting practices. The article was quite comprehensive in evaluating the use of specific practices such as balanced scorecards or activity-based costing. Unfortunately, the coverage did not include the implications of these practices for the few firms in the research that ended up implementing them.
SWOT Analysis for C&C Sports
Strengths: The company is succeeding because of its local focus as a domestic producer in Texas, where it relies on its positioning to offer quick delivery and understanding of clients’ preferences. Excellent product quality is shaped by a willingness to address customer needs. Customers are paying more for durable goods; if they continue to do so, the firm will remain profitable. There is family leadership. With the Douglas family’s continued involvement since 1928, the company benefits from a sense of tradition, commitment, and a long-term strategic vision. The Douglas family has offered continuity in leadership since 1928. There is certainty, and the sense of tradition, dedication, and long-term vision helps grow the firm. The firm has a diversified portfolio. There are pants, letter award jackets, and baseball jerseys to differentiate from the competition.
Weaknesses: Financial constraints may lead to lower available cash and investment ability when growth opportunities come. The inventory buildup adds to costs and may become obsolete when trends change. Additionally, C&C Sports has a lower operating income percentage than the industry average (Davis & Davis, 2020).
Opportunities: There is growth in e-commerce, and internet sales in the industry can drive revenue and allow a broader customer base. The market expansion opportunity is possible if the company moves to focus on diversified product portfolios. Thirdly, embracing technology in production processes or bringing in new styles and frameworks to cut costs will improve profitability.
Threats: The challenge of competition from imports will continue and can eat into profit margins as price wars ensue. The economic downturn can halt consumer spending on non-essential and hurt the business’s financial bottom line. Moreover, if consumers change their preferences for sports or athletic wear styles, they will pose a threat, especially when C & C needs to adapt quickly more quickly. Lastly, there is debt dependency because of the likelihood of interest rates in the short term that can be higher than what C&C needs to turn capital into profits.
References
Alhato, O. (2023). The impact of management accounting practices: Comparative analysis study between Jordan and Romania. Theoretical and Applied Economics, XXX(3(636)), 297-304.
Davis, C. E., & Davis, E. (2020). Managerial accounting (4th ed). Wiley.
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