1. What obligations did the financial managers have to their shareholders to do whatever is possible to avoid major financial losses associated with these products?
According to Ask (2002), all major business institutions nowadays are being forced to continuously upgrade their financial status, technologies, innovate their products and services that they offer as well as extend their customer reach to avoid major financial losses associated with problems about their products particularly in developing countries, and utilize resources through financial strategies. Apparently, the main effect of the situation to the company is that it is forcing all types of costing systems, from small to large scale causes, to amend their current financial strategies and processes, and to restructure their production and processes. Financial manager of Dalkon Shield must set some necessary changes to effectively and efficiently respond to the continuously evolving needs of the company.
Financial managers make sure that shareholders get their investments fully. It is also their role to make sure that shareholders are receiving their entitled maximum returns for their investment. To avoid major financial losses associated with these products, financial managers are facing with the task of engaging in different activities that brings value to the shareholders and the company. Financial managers can implement different strategic plans to inform providers and top management for the development of strategies and implementations of plans. Narrowing the company’s strategic partners through engagement in narrowly defined financial areas is also helpful for the financial mangers (Chua, 2006).
As implementers of strategies, the role of financial managers also consists of shareholder value maximization. Financial managers can increase and create value from the financing, budgeting, and networking activities such as buying assets which create more cash than they cost or they can sell stocks and bonds and other instruments financially which all generate more finances than their costs. When the financial manager will try to a healthy balance between the shareholder and the company needs, they also need to follow ethical standards by ensuring that all statements and their financial transaction are true and correct (Chua, 2006).
In this situation, the company has experienced on maximizing their business by smoothly ensuring that all services are working and provide the expertise for the generation of financial System. This is an important in the field of financial management for the company and financial managers should developed basic information and concepts regarding the employed effective strategies to avoid major financial losses associated with these products. The objective of these actions is to identify and present the most important features of product and planning to sell products in a well established amount. These include product analysis, competitor analysis and marketing operations that focus on channel distribution, costing objectives, market analysis, customer satisfaction and a great tool in order to cope with the challenges of product placement. Consumer and environmental analysis are important area made by a continuous effort to make connections and form relationships with finances, customers, and finance and distribution channels designed financing strategies. Business network of the company can help the financial managers to contribute to effective supply management that support and investigate the influence of the situation on financial management processes (Ask, 2002).
In a perspective of this company, strategies used by the financial manager must suggest that the financial losses be prepared to respond appropriately to random costing agreement with the shareholders. If long-run performance is not greatly impacted by shareholders and if it is caused by random impacts, then firms must monitor these shocks and transform them into opportunities. Importantly, these impacts cannot be readily predicted. Thus the firms must have an agile mechanism scan in conjunction with a flexible marketing organization. Before any of these implications are strongly adopted much more marketing strategy refinement is necessary. The financial strategies employed by financial managers are effective tools that may be used by the marketing manager to aid in more effective planning and strategy development of product and business. This is an important factor that provides framework for more specific mix strategies and tactics in the products or services, distribution, promotion, and pricing areas (Van Horne & Wachowicz, 2005).
Another factor to consider is the strategy which is effective tools that may be used by the firm to aid in more effective strategy and planning development. This is an important factor that provides framework for more specific financial mix tactics and strategies. Throughout the years many international business organizations has invested in propagating their marketing strategies as well as the flow of investments. The financial manger must have been investing on effective services and production to aid in its goal. Strategic financing process also affects the decision making as it affects the capital opportunities and company capabilities in developing a total return of investments to their shareholders (Van Horne & Wachowicz, 2005).
2. Was the dumping in this case ethical? Those involved in the dumping might have argued that the people receiving the pajamas would not have otherwise had access to such clothing and were notified of the health and safety hazards. Does this affect your feelings about the case? What do you think about the exportation of the Dalkon Shield? Can it be justified because the rate of dying during childbirth in Third World countries is extremely high, and, as such, any effective birth control device is better than none?
International laws presented that a firm is dumping if its foreign price is either below its marginal cost or below domestic price. In this case, ethical consideration must be consider by the company since the firm often claim that a low-cost is engaged in a long term strategies in harming domestic consumers and destroying the domestic industry (Viner, 1991).
It was also a most unethical way and a clear indication of how money always eclipses the significant issue in this case. Whatever causes that these children would have access to fire-retardant pajamas, they would also not have had opportunity to have kidney cancer had they not been exposed unduly to the chemical toxic for their health. The same is true Dalkon Shield of exportation; many serious and worst physiological problems associated with utilizing this product do not have advantages or benefits. A complete fundamental tenets breakdown in social responsibility will aid such blatantly unethical global practices (Ramadan, 2007).
In exportation of the Dalkon Shield, planning strategies in the context social responsibility and safety hazard is important. Exportation management fails because of factors including the current environment, feasible methods and the security system. The planning and resources must be value information. In some areas, failure of information dissemination happens automatically especially when there is a problem with the product itself or the safety and the integration of this information to a certain period. Another dimension of challenge in this kind of market environment is the complex and evolving regulations which this institution conducts business. In contrast, there are handfuls of effective strategies for the exportation of the Dalkon Shield that may help the firm implement strategy from a global perspective. Foremost, the planning must concern with the Dalkon Shield organizational governance, with decisions making capacities, and the processes for making sure that the export decisions made are implemented properly. There are several factors for export trends including the market mass liberalization, technological impact, and the ever changing distribution and communication and method worldwide. The safeties in the markets are increasingly becoming more important to public, multinational companies, and this phenomenon directed to philosophy and organizational shift of the export, research and marketing companies. The advantage of this approach to research buying include better coordination and control of the research in many economies, research findings comparability, and better view and understanding of transnational basis in terms of the functions (Viner, 1991).
The rate of dying during childbirth in Third World countries is extremely high, and the draw back of focusing too much on material success is the tendency to neglect ethical issues and may tolerate corruption. These firms must be committed in strengthening public confidence and understanding in clinical research and biotechnological expertise in all aspects of the clinical research. Regulations on effective birth control device are better than none because all information and activities of related to this issue must be regulated through information submitted to authority. Moreover, industry related to biotech, pharmaceutical and medical device companies, as well as their regulations and legislations which involves academic organizations, peer associations, patient groups, and the public must assures the safety and ethical considerations in clinical trials through collaboration and working with the public and their stakeholders globally to explore different possibilities and paradigms for contraceptive research and development. The product of the company must promote efficient and better clinical trial process especially in developing new drugs biotechnology while demonstrating the strategic values of clinical outsourcing and reiterating the importance of public contributions as partners in the new treatments and new birth control contribution (Atkinso, 2004).
In this case, different laws enforces by the government and other related agencies includes reports which identifies the approved drug products approved on the basis of effectiveness and safety of their products under the Drug, Federal Food, and Cosmetic Act. In terms of controlling contraceptives and other related products, the company requires any manufacturer to dispense by prescription only with exemptions in emergency cases and is closely regulated by other sub laws. These drugs must have a warning on the label when given out to the client. The manufacturer must comply with approved good manufacturing practices set by the agency. It must also have a “uses” section that presents the uses of the drug under appropriate testing so the client or patient is aware of the definite usage or application. The firm must enforces its regulations through various methods such as investigations, punishments, licenses to improve these processes; and must closely monitor the company’s processes in response to testing of the product for safety and efficiency and to adequately label the product to avoid violations of the law (Fishbein, 2005).
Q4. Compare and contrast job order and process costing. Support your answer with examples relevant academic references.
The job order costing system is used for the estimation of production cost for various jobs included in specific orders of the customer. Within the organizations treating every single job as a single unit output, or when production of different products within a specific time, this costing system type is most important. In this regard, it appears that firms in developing countries need to pay some attention to new techniques, so they can help their society and their country to be able to compete in the international market by conducting studies on these new techniques, and show its advantages and disadvantages. The company should also employ job order and process costing strategy for product development on fact finding, analysis, generation of technical and management plan goals (Atkinso, 2004).
Labor hours, materials, and machine hours will be different from a specific product to another and one order of the customer to the next, and may be different further in the demand that is placed inherently on overhead manufacturing. One example of a specific job or customer order is customized production that might need greater resources for support than general activity of production. If a firm specializes for the manufacturings were to produce a specific product patented and designed by another firm, it may need some re-engineering process; materials utilized not used in overall production, or another factor for change such as a different description or product logo. In this case, management would need to be sure that the specific customer order equates all relative costs; otherwise information for product cost will not be correct. In the circumstances where the company is producing different product type within a specific period of time, job order costing system employment would also be applicable as management would require in recognizing the overall actual costs for each product. Service companies may not get benefit as much from job order and process costing as compared to other industries because their costing can be hard to assign as they may not have a visible relationship of cause and effect (Kaplan, 2007).
Nowadays, traditional cost systems became unpopular among companies, since these cost systems were designed long time ago for different circumstances. For example, companies used to produce a small number of products and indirect cost (overhead) was quite small, compared to the total cost at that time overhead did not cause any problems to the managers. On the other hand, in the 1980s many companies started produce different variety of products and indirect cost started to play an important role. Therefore, the traditional cost systems are no longer desirable by managers. Managers started to think to change these systems after realizing that these systems are not reliable for managerial purposes anymore. Recently, many companies are facing a real competition in the world market, due the fact that some companies produce high quality products at low costs. For that reason managers attempts to adopt a cost system which can give them accurate information and the exact cost for each product, so managers can take right decisions at the right time (Laughlin, 1995).