Management Accounting

10 October 2016

This revolution of management came to understand the need for amalgamating accounting and management techniques. Strategic management accounting is the analysis of data regarding management accounting relating to a particular business as well as its competitors (Sharma, 2009). Puma consistently develops innovative product and marketing campaigns to improve the brand profile and to continually increase product and brand desirability. Strategic Positioning concern performing different activities from rivals or performing similar activities in different ways.

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It is how a company will present itself to the market giving itself a competitive edge. The Business environment in which they operate is however large and therefore they cannot use the same concepts everywhere therefore decentralisation for day to day management is effective while IT systems can be used for centralised monitoring and coordination, Introduction Management accounting techniques were adopted and used to analyse and evaluate the business information of Puma.

The results from the evaluation and analysis will be reported starting with the Company Profile Puma SE (PUMA) and its adaptability to business environment changes focusing on management accounting changes, technologies used management practices and its product life cycle. The Cost Management and Product Management Accounting Techniques adopted by Puma are essentially reported on thereby describing the company’s strategic positioning and the challenges faced by Puma in implementing is techniques. The report will recommend ways in which Puma can reduce or eliminate its limitations.

Company Profile PUMA was established in 1924 by founding brothers Schuhfabrik Rudolf Dassler and Adi Dassler and was renamed PUMA Schuhfabrik Rudolf Dassler in 1948 when Adi left the company to start his own shoe company, Adidas. Puma employs more than 9,500 people worldwide that designs and develops footwear, apparel and accessories making it one of the world’s leading sportlifestyle companies. The company and has headquarters in Herzogenaurach/Germany, Boston, London and Hong Kong and went public in 1986.

The PUMA Group owns the brands PUMA, Cobra Golf and Tretorn. The Company has a total Capital Stock of € 38,611,108. 00 as per 01/01/2012 till 31/12/2012 financial statements. PUMA sponsors many athletes such as Olympic champion Usain Bolt of Jamaica and another large number of national and club teams in sports ranging from soccer to cricket. PUMA starts in Sport and ends in Fashion Its Sport Performance and Lifestyle labels include categories such as Football, Running, Motorsports, Golf and Sailing.

Sport Fashion features collaborations with renowned designer labels such as Alexander McQueen, Mihara Yasuhiro and Sergio RossiIt is committed to working in ways that contribute to the world by supporting Creativity, Sustainability and Peace, and by staying true to the principles of being Fair, Honest, Positive and Creative in decisions made and actions taken. (Delloitte and Touche, 2013) Management Accounting Changes due to Business Environment The business world of today has become much more complex and vast with most properly set up and registered businesses of any size penetrating markets much further from their geographical locations.

The change of markets and their influences led to the development of modern business environments. Business environment therefore refers to the influences and pressures exerted by external factors on the business. The rise of these market forces on businesses led to management’s development of strategies that would totally take advantage of the opportunities in the new markets essentially increasing profits while complying with laws and societal values at the same time suppressing any threats from the new market forces.

This revolution of management came to understand the need for amalgamating accounting and management techniques. Strategic management accounting is the analysis of data regarding management accounting relating to a particular business as well as its competitors (Sharma, 2009). In Germany, the business environment is basically regulated by the government, business associations and other special bodies. The Frankfurt Stock Exchange is one special body that influence and facilitates the Germany business environment. The Prime Standard is a transparency level based on a legal framework provided by the EU-regulated markets.

Companies listed in the Prime Standard are required to meet high transparency standards such as use of international accounting standards (IFRS/IAS or US-GAAP) and publication of a corporate calendar staging of at least one analyst conference per year. Sustainability indicators provide investors of the opportunity to support responsible company management. The philanthropic and social activities of the company are also considered here. Puma adjusted its management accounting strategies and adopted the most suitable for business.

Business processes reengineering in redesigning and changing the existing practices or processes in the business in order to attain significant improvement in the performance of the organization (Adeyemi, 2008). One of the most crucial management accounting process in a firm is control. () Control refers to the process of making sure that an organization’s activities are in accordance to the plans so that its objectives can be achieved successfully. Puma adopted the management accounting control‘s main two elements. Puma’s management are involved in the formal planning processes such as budgeting and long term planning.

Puma created responsibility centres that commence the process of allocating the answerability for financial outcomes and results to the individuals in the entire organization. Drury (2008) accounted that, while designing effective management control systems it is very important to take into account the current circumstances. Modern Manufacturing Technologies Manufacturing departments rely on operational information that provides management with data on departmental outputs and performance, e. g. , production volumes, lead and delivery times, product defects and resource consumption.

Recent empirical findings suggest that nonfinancial data should have a prominent place in manufacturing departments not the least in companies emphasizing customization and manufacturing A second challenge was communication. Puma’s global design and manufacturing teams are based in different countries. It is really crucial for to have the team members holding the same physical model to which they could all relate. Puma has installed 3D printer in each of the sites. “Each team prints the same prototype model, so that when we have conference calls to discuss design and manufacturing issues, we are all on the same page.

Each team is viewing and holding the exact same model, which allows us to communicate much more easily than before. ” The PumainCycle Collection was born from Puma’s challenge to produce a fully recyclable or biodegradable collection as part of the learning journey to improve the sustainability of its products. To develop the collection, Puma collaborated with EPEA, whose mission it is to help companies fulfil the Cradle to Cradle Products Innovation Institute’s criteria for the design of ecologically and intelligently designed products.

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