Time and Cost Performance in Construction

Time and Cost Performance in Construction One of the most essential problems confronting the water and sanitation sector in the northern region of Ghana is performance of cost and time. In most cases time overruns occur in the donor-funded projects and in the extreme cases cost overruns. Time and cost overruns occur in almost all related water and sanitation construction projects in the northern region of Ghana. It is therefore essential to define the actual performance difficulties in order to make light of and avoid the delays and increasing cost in any donor-funded water and sanitation project. In the ESAs funded water and sanitation projects, the aim of project control is to ensure the projects finish on time, within budget and achieving other project objectives. It is a complex task undertaken by project managers in practice, which involves constantly measuring progress; evaluating plans; and taking corrective actions when required (Kerzner, 2003). During the last few decades, numerous project control methods, such as G antt Bar Chart, Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM), have been developed (Nicholas, 2001) (Lester, 2000). A variety of software packages have become available to support the application of these project control methods, for example Microsoft Project, Asta Power Project, Primavera, etc. Despite the wide use of these methods and software packages in practice, many of these donor-funded projects in the north still suffer time and cost overruns. This chapter reviews literature concerning the major issues of and cost and time performance in order to recognize the related information regarding those issues. Definition of Time and Cost Performance Time Performance Time performance is defined as meeting the duration baseline in the initial planning process of the project. Time overruns occurs when there is an extension of time beyond planned completion dates traceable to the major stakeholders (Kaming et al., 1997). Delays are incidents that impact a projects progress and postpone project activities; delay causing incidents may include unavailability of resources, communication problems, slowness in decision making, design delays, etc. In general, project delays occur as a result of project activities that have both external and internal cause and effect relationship (Vidalis and Najafi, 2002). (Choudhury and Phatak, 2004) and (Chan-Albert, 2001) defined the time overruns as the differentiation between the actual completion time and the estimated completion time. Project delays are those that cause the project completion date to be delayed (Al-Gahtani and Mohan, 2007). Cost Performance Cost performance is defined as the zero difference between the budgeted/original cost estimate of the project and in some cases spending below the estimated cost of the project. Cost variance occurs when there is an excess of actual cost over budget or below budget. Cost variance in construction projects often result in an overrun which is also occasionally called cost escalation, cost increase, or budget overrun. (Zhu and Lin, 2004). Cost overrun is defined as the change in contract amount divided by the original contract award amount .This calculation can be converted to a percentage for ease of comparison (Jackson, 1999). (Choudhury and Phatak, 2004), defined the cost overruns as the differentiation amid the original cost estimate of project and actual cost on completion of works of a commercial sector construction project. Cost is among the major consideration throughout the project management life cycle and can be regarded as one of the most important parameters of a project and the driving force of project success (Azhar et al., 2008, p. 7). (Gido and Clement, 2003), mentioned that cost performance is an effective technique in project management effort expended and it is widely accepted in the literature and industry. Earned Value Analysis (EVA) is used to evaluate cost performance of different types of projects. Cost control, cost estimating, and cost budgeting are three cost related processes that interact among each other and with other scopes of construction projects. Time variance for water and sanitation projects Time variance (Tv) is the time between the scheduled contract time and the completion time in undertaking the projects. Bromilows Time-Cost Model Bromilow was the first to develop an empirical model for the prediction of construction time using the project cost. The model known as Bromilows time-cost (BTC) model, developed and published in Australia in 1969, was developed for giving a fast and construction schedule estimate using project cost. The model provides a forecast of construction schedule using the estimated final cost of the project. Bromilows model disclosed that the construction duration was highly correlated with the project cost (Bromilow, 1969). The model was developed by the use of a linear regression model. (Hoffman et al, 2007), confirmed that, Bromilow was triumphant in providing a point estimate as well as upper and lower quartile limits of construction duration using past project data. (Ameyaw et al, 2012). The correlation was re-tested by (Bromilow, 1988) collaborated with the Australian Institute of Quantity Surveyors (AIQS) in two transcribe contract time performance studies, in 1976 and 1988. (Bromilow, 1988), investigated 408 projects built between 1970 and 1976 and establish that despite indication of superior disparity between the time performance of projects of comparable value, the correlation between construction duration and project cost revealed in the 1960s is pertinent. Even though project time is influenced by many other factors including cost, some success has been chalked in an attempt to model project time. The model as first developed by (Bromilow, 1969) is expressed as T = KCB. T represents project duration, C actual cost of the project including fluctuations and variations, K is a constant showing the level of time performance for a unit of C, and B is a constant describing how the time performance was affected by project size as measured by the cost. (Long et al, 2 009), argued that the application of Bromilows time-cost model in estimating and benchmarking the project duration has been vigorous while some studies have suggested that the application of this model is unsuitable. More importantly, (Mensah, 2010), adopted the Bromilows time cost model to estimate project duration on donor funded feeder roads in Ghana and found it applicable. Auxiliary analysis showed the original Bromilow time-cost model is not the best fit regression form, and alternative models were proposed. All the researchers identified cost was a poor forecaster of time performance, and further proposed an alternative model to that proposed by Bromilow (1969). (Kaka and Price, 1991), used the time-cost model for both civil and building projects and indicated that the original model, as introduced by (Bromilow, 1969), remained unchanged but the coefficient of the equation changed with the project type. (Al-Momani, 2000), stated that the owner satisfaction for performance can be defined as the gap between what the owner expects and the level of performance they believe is being delivered by the contractors. (Lehtonen, 2001), stated that performance measurement is a basis for progressive improvement and monitoring of company productivity. (Chan and Kumaraswamy, 2002) remarked that project performance measurement include time, budget, safety, quality and overall client satisfaction. (Thomas et al., 2002), defined performance measurement as monitoring and controlling of projects according to regular basis. (Kuprenas, 2003), stated that project performance measurement means an improvement of cost, schedule, and quality for design and construction stages. (Long et al, 2004), stated that a project performance measurement is related to many indicators such as time, budget, quality, specifications and stakeholders satisfaction. (Navon, 2005), defined performance measurement as a comparison between the desired and the actual performances. Problem of Performance in Construction Industry The failure of any construction project is mainly related to the problems and failure in performance. Moreover, there are many reasons and factors which attribute to such problem. (Ogunlana et al., 1996), stated that the construction industry performance problems in developing economies can be classified in three layers: inadequacies in industry infrastructure (resources supply), clients and consultants caused problems and contractor incompetence/inadequacies. (Okuwoga, 1998), identified that the performance problem is related to poor budgetary and time control. (Long et al, 2004), remarked that performance problems arise in large construction projects due to many reasons such as: incompetent designers/contractors, poor estimation and change management, social and technological issues, site related issues and improper techniques and tools. (Navon, 2005), stated that the main performance problem can be divided into two groups: (a) unrealistic target setting (i.e., planning) or (b) cau ses originating from the actual construction (in many cases the causes for deviation originate from both sources). (Samson and Lema, 2002), found that the traditional performance measurement systems have problems because of large and complex amount of information with absence of approaches to assist decision maker understand, organize and use such information to manage organizational performance. (Navon, 2005), remarked that traditional project performance control is usually generic (e.g., cost control techniques). It relies on manual data collection, which means that it is done at low frequency (normally once a month) and quite some time after the controlled event occurred (i.e., not in real-time). Moreover, manual data collection normally gives low quality data. (Ling et al., 2007), remarked that architectural, engineering and construction (AEC) firms may encounter challenges managing construction projects performance in China because of unfamiliarity with this new operating environment. (Kim et al., 2008), stated that international construction projects performance is affected by more complex and dynamic factors than domestic projects; frequently being exposed to serious external uncertainties such as political, economical, social, and cultural risks, as well as internal risks from within the project. Project Management and Performance There is a strong relation between project management and project performance. Management in construction industry is considered as one of the most important factors affecting performance of works. (Brown and Adams, 2000) studied a new approach to the measurement of the effect of Building Project Management (BPM) on time, cost and quality outputs using 15 `cases derived from UK data. The evaluation undertaken demonstrates that BPM as it is presently implemented in the UK fails to perform as expected in relation to the three predominant performance evaluation criteria; time, cost and quality. (Lehtonen, 2001), obtained a model for performance measurement which assist both firms top management and operational managers for continuous feedback on operational activities. (Thomas et al., 2002), stated that documenting and archiving performance data could be useful for future reference, such as for settling disputes on claims, and in maintenance and repair works. (Kuprenas, 2003), remarked that quantification of the impacts of the project management processes are identified through three steps of analysis: comparison of summary statistics of design performance, proof of statistical significance of any differences and calculation of a least squares regression line of a plot of design performance measurement versus amount/application of project management as a means to quantify management influence to design phase cost performance. (Cheung et al., 2004), studied the project performance related to project managers and remarked that development of a Web-based construction Project Performance Monitoring System (PPMS) can assist project managers in exercising construction project performance indicators and can help senior project management practitioners, etc., in monitoring and assessing project performance. (Pheng and Chaun, 2006), stated that while project management is only one of the many criteria upon which project performance is contingent, it is also arguably the most significant as people formulating the processes and systems who deliver the projects. (Ugwu and Haupt, 2007), stated that an adequate understanding and knowledge of performance are desirable for archiving managerial goals such as improvement of institutional transformations, and efficient decision making in design, specification and construction, at various project-level interfaces, using appropriate decision-support tools. (Ling et al., 2007) , investigated Project Management (PM) practices adopted by Singaporean construction firms and dogged the level of performance of their projects in China; they identified PM practices that led to better performance; and recommended key PM practices that could be adopted by overseas construction firms in China to improve project performance. Water and Sanitation Projects and Performance Success of projects depends mainly on success of performance. Many previous researches had studied performance of construction projects. (Dissanayaka and Kumaraswamy, 1999), remarked that one of the principal reasons for the construction industrys poor performance has been attributed to the inappropriateness of the chosen procurement system. (Reichelt and Lyneis, 1999), remarked three important structures underlying the dynamic of a project performance which are: the work accomplishment structure, feedback effects on productivity and work quality and effects from upstream phases to downstream phases. (Thomas et al., 2002), identified the main performance criteria of construction projects as financial stability, progress of work, standard of quality, health and safety, resources, relationship with clients, relationship with consultants, management capabilities, claim and contractual disputes, relationship with subcontractors, reputation and amount of subcontracting. (Chan and Kumarasw amy, 2002), stated that construction time is increasingly important because it often serves as a crucial benchmarking for assessing the performance of a project and the efficiency of the project organization. (Cheung et al., 2004), identified project performance categories such as people, cost, time, quality, safety and health, environment, client satisfaction, and communication. It was obtained by (Navon, 2005), that a control system is an important element to identify factors affecting construction project effort. For each of the project goals, one or more Project Performance Indicators (PPI) is needed. (Pheng and Chaun, 2006), obtained that human factors played an important role in determining the performance of a project. (Ugwu and Haupt, 2007) remarked that both early contractor involvement (ECI) and early supplier involvement (ESI) would minimize constructability-related performance problems including costs associated with delays, claims, wastages and rework, etc. (Ling et al., 2007), obtained that the most important of practices relating to scope management are controlling the quality of the contract document, excellence of reaction to perceived variations and extent of changes to the contract. It was recommended for foreign firms to adopt some of the project management practices highlighted to help them to achieve better project performance in China. Information Technology and Water and Sanitation Projects Performance Information technology technique is very important in the entire world. Information technology (IT) opens new visions in the businesses and industries performance of the world. The construction industry is considered as one of the industries using IT technique such as software management systems, database and communications. For many years, many processes, functions, operations were done difficulty because of absence of IT field. In addition, most of the work was done manually which lead to more cost, time and poor performance. Furthermore, IT usage in the construction industry leads to many changes, innovations and developing in many aspects which lead finally to good and strong performance. There are many benefits and relations of using IT in the construction projects such as: greater use of IT correlates with better project performance, owners and contractors realize meaningful benefits, IT affects schedule compression beneficially, and overall project cost savings which lead to a success performance of project (Schwegler et al., 2001). (Nitithamyong et al., 2004), remarked that information Technology (IT) is now routinely used in the construction industry as a tool to reduce some of the problems generated by fragmentation. The use of IT improves coordination and collaboration between firms participating in a construction project, leading to better communication practices and so good performance. Its benefits include an increase in the quality of documents and the speed of the work, better financial control and communications, and simpler and faster access to common data as well as a decrease in documentation errors. (Thomas et al., 2002), proposed contractor Performance Appraisal and Reporting (PAR) system for reviewing contractor performance at an organizational level. Advancements in World Wide Web techniques provide enhanced capacities to collect compile and disseminate performance-related information to various construction stakeholders in a timely and cost-effective manner. (Becerik, 2004), stated that the rapid advances of web-based project management and collaboration technology offer new opportunities to improve existing construction project performance. (Cheung et al., 2004) obtained framework software to measure project performance based on project performance measurement system (PPMS). The system contains four stages which are data entry, database, reporting and action. This system has eight categories to measure performance which are people, cost, time, quality, safety and health, environment, client satisfaction, and communication. (Goh, 2005), remarked that information technology m anagement leads to performance improvement in the construction industries. For instance, in Singapore 2003, general administration, design, project management and site management were enhanced by using of IT. In addition, there were more advantages as quick working, good quality of work and fast access of information. Factors Affecting Performance of Managers (Ogunlana et al., 1996), recommended the need for focused effort by economy managers and construction industry associations to provide the infrastructure needed for efficient project management and performance. (Dissanayaka and Kumaraswamy, 1999), stated that the knowledge that would influence potential performance enables project managers to pay special attention to control performance more effectively. (Chan and Kumaraswamy, 2002), remarked that effective communication and fast information transfer between managers and participants help to accelerate the building construction process and performance. (Kuprenas, 2003), studied the impact of the use of a project management based organizational structure, project manager training, frequency of design meetings, and frequency of design reports on design phase cost performance. The process of a design team meeting frequency and the process of written reporting of design phase progress were found to be statistically significant in reducin g design phase costs. (Navon, 2005), stated that data are collected and used for construction managers as a basis to evaluate the Project Performance Indicators (PPI) actual value to compare it with the planned value and forecast its future value based on past performance. (Pheng and Chaun, 2006), identified the importance of the working environment variables for the performance of a project manager in the private and public sectors according to three main groups which are job condition, project characteristic and organizational related categories. The result revealed that working hours, physical condition of project site, complexity of project, material and supplies, project size, duration of project and time availability were viewed differently in terms of importance by the contractors and consultants groups. Team relationship was ranked as the most important variable affecting the performance of a project manager. It is obtained that project managers experiences do not have much effect on how they perc eive their working environment. Time Impact Analysis Time is an essential part of every plan organisations develop for performing contract work. There is a relationship between the schedule, the scope of work, and the project conditions. According to (Anabari, 2003), Time Impact Analysis is typically associated with the modeling of the effects of a single delay. It requires a CPM schedule that is able to show the pure CPM calculation differences between a schedule that does not include a delay and one that does include an activity modeling a delay. The difference for project completion between the non-impacted schedule and that of the schedule with the impact is considered to be the impact of the delay for time duration considerations. Project Cost Time Relationship Total project costs include both direct costs and indirect costs of performing the activities of the project. Direct costs for the project include the costs of doing work related to some specific activities of the project. Indirect costs, on the other hand, are the necessary costs of doing work which cannot be related to a particular activity, and in some cases cannot be related to a specific project (Davison, 2003),. If each activity was scheduled for the duration that resulted in the minimum direct cost in this way, the time to complete the entire project might be too long and substantial penalties associated with the late project completion might be incurred (Dlakwa and Culpin, 1990). Thus, planners perform what is called time-cost trade-off analysis to shorten the project duration. This can be done by selecting some activities on the critical path to shorten their duration. As the direct cost for the project equals the sum of the direct costs of its activities, then the project direct cost will increase by decreasing its duration. On the other hand, the indirect cost will decrease by decreasing the project duration, as the indirect cost are almost a linear function with the project duration (Al-Khalil and AL-Ghafly, 1999). Factors Affecting Cost and Time Performance (Chan and Kumaraswamy, 2002), remarked that studies in various countries appear to have contributed significantly to the body of knowledge relating to time performance in construction projects over the past three decades, while (Iyer and Jha, 2005), remarked that project performance in term of cost is studied since 1960s. These studies range from theoretical work based on experience of researcher on one end to structured research work on the other end. Moreover, (Pheng and Chaun, 2006), stated that there have been many past studies on project performance according to cost and time factors. (Chan and Kumaraswamy, 1996) stated that a number of unexpected problems and changes from original design arise during the construction phase, leading to problems in cost and time performance. It is found that poor site management, unforeseen ground conditions and low speed of decision making involving all project teams are the three most significant factors causing delays and problems of time performance in local building works. (Okuwoga, 1998), stated that cost and time performance has been identified as general problems in the construction industry worldwide. (Dissanayaka and Kumaraswamy, 1999), remarked that project complexity, client type, experience of team and communication are highly correlated with the time performance; whilst project complexity, client characteristics and contractor characteristics are highly correlated with the cost performance. (Reichelt and Lyneis, 1999), obtained that project schedule and budget performance are controlled by the dynamic feedback process . Those processes include the rework cycle, feedback loops creating changes in productivity and quality, and effects between work phases. (Chan-Albert, 2001), identified that the best predictor of average construction time performance of public sector projects in Malaysia is T = 269 C 0.32. This relationship can serve as a convenient tool for both project managers and clients to predict the average time required for delivery of a construction project. (Kuprenas, 2003), stated that process of a design team meeting frequency and the process of written reporting of design phase progress were found to be statistically significant in reducing design phase costs. Otherwise, the use of project manager training and a project management based organizational structure were found to be processes that do not create a statistically significant in reducing design phase costs. (Iyer and Jha, 2005), remarked that the factors affecting cost performance are: the competence of project managers; support of top management; coordinating and leadership skills of project managers; monitoring and feedback by the participants; decision making; coordination among project participants; owners competence; social condition, economical condition and climatic condition. Coordination among the various participants of the project was as the most considerable of all the factors having utmost influence on cost performance of projects. (Love et al., 2005), studied project time-cost performance relationships by using project scope factors for 161 construction projects that were completed in various Australian States. It was noticed that gross floor area and the number of floors in a building are key determinants of time performance in projects. Besides, the findings indicate that cost is a pitiable forecaster of time performance. (Chan and Kumaraswamy, 2002), proposed specific technological and managerial strategies to increase speed of construction and so to upgrade the construction time performance. It is remarked that effective communication, fast information transfer between project participants, the better selection and training of managers, and detailed construction programs with advanced available software can help to accelerate the performance. (Jouini et al., 2004): stated that managing speed in engineering, procurement and construction projects is a key factor in the competition between innovative firms. It is found that customers can consider time as a resource and, in that case, they will encourage the contractor to improve the time performance. Identifying factors that influence cost performance Previous research has attempted to establish reasons for the difference between the tender sum and the final account. This segment identifies the factors that influence cost performance. Four factors were identified from the obtainable research findings, (Morris, 1990), (Kaming et al., 1997) and (Chimwaso, 2001). These are; design changes, inadequate planning, irregular weather conditions; and fluctuations in the cost of building materials. To expand the research it was decided to synchronize the above list of factors with other factors gleaned from the final account reports. These were compared with the factors from the existing research findings, and a final list of 18 factors was prepared. These were then separated into two groups of seven significant factors and nine other factors, which are usually ignored, but perceived to be of equal significance (Chimwaso, 2001). Measurement of Project Performance (Karim and Marosszeky, 1999), stated that performance measurement systems have been one of the primary tools used by the manufacturing sector for business process re-engineering in order to monitor the outcomes and effectiveness of implementation. (Brown and Adams, 2000), obtained an evaluation framework to measure the efficiency of building project management (BPM) by using conventional economic analysis tools such as time, cost and quality. (Lehtonen, 2001), stated that performance measurement systems are imminent in the construction firms. (Samson and Lema, 2002), stated that effective and efficient management of contractors organizational performance requires commitment to effective performance measurement in order to evaluate, control, and improve performance today and in the future. (Tangen, 2004), obtained that performance measurement is a complex issue that normally incorporates at least three different disciplines: economics, management and accounting. Measurement of performance has garnered significant interest recently among both academics and practitioners. (Tangen, 2004), remarked the choice of a suitable measurement technique depends on a number of factors, including the purpose of the measurement; the level of detail required; the time available for the measurement; the existence of available predetermined data; and the cost of measurement. (Navon, 2005), defined performance measurement as a comparison between the desired and the actual performances. For example, when a deviation is detected, the construction management analyzes the reasons for it. The reasons for deviation can be schematically divided into two groups: (a) unrealistic target setting (i.e., planning) or (b) causes originating from the actual construction (in many cases the causes for deviation originate from both sources). (Navon, 2005), stated that performance measurement is needed not only to control current projects but also to update the historic database. Such updates enable better planning of future projects in terms of costs, schedules, labor allocation, etc. (Pheng and Chaun, 2006), stated that the measurement of project performance can no longer be restricted to the traditional criteria, which consist of time, cost and quality. There are other measurement criteria such as project management and products. (Cheung et al., 2004), stated that New South Wales Public Works Department in Australia launched a Project Performance Evaluation (PPE) framework, which covers an extensive array of performance parameters. PPE parameters are communication, time, cost, quality, safety, claims and issues resolution, environment, contract relations. PPEs purpose is to broaden project performance procedures to envelop soft parameters also, such as communication and resolution of dispute. In the UK, a performance measurement tool for project referred to as the Key Performance Indicators (KPIs) was developed by the KPI working group under the UK Construction Industry Best Practice Programme to include time, cost, quality, client satisfaction, change orders, business performance, health and safety. The implementation steps of KPIs are as follows: Decide what to measure, Collect data and calculate the KPIs. That notwithstanding, both the PPE and KPIs are valuable tools for measuring performance of a project over a period of time. Anyway, it is obtained from previous study that both methods PPE and KPIs can be used for measuring of performance as the indicators are similar in two methods. In this study KPIs method will be used to measure performance. (Iyer and Jha, 2005), stated that measuring the performance of any construction project is a very complex process because modern construction projects are generally multidisciplinary in nature and they involve participation of designers, contractors, subcontractors, specialists, construction managers, and consultants. With the increasing size of the project, number of participants in the project also increases. The objectives or goals of all participants need not be same even in a given project. Hence to measure performance of a project witho

Minimum Wage Good or Bad

Minimum Wage Good or Bad Rachel L. Hathaway Professor Myung Han Economic Problems and Issues – ECO 40500816 March 15, 2009 Whether minimum wage is good or bad, has been an ongoing debate since before 1938 when the government set the first federal minimum wage at $0. 25/hr thanks to the Fair Labor Standards Act. The federal minimum wage is currently at $6. 55/hr with yet another increase to come July 24, 2009 to begin the federal minimum wage up to $7. 25/hr. Minimum wage was ideally set to help the working poor to stay out of poverty. Let’s do the math $6. 5* 2080=$13624 per year. 2008 HHS Poverty Guidelines SOURCE: Federal Register, Vol. 73, No. 15, January 23, 2008, pp. 3971–3972 Well, based on the 2008 poverty guidelines if you are a single person you are considered above the poverty line, however, if you are a head of household say a single parent with a child you now fall below the poverty line. It is easy to see that minimum wage will not cut it to make end s meet and provide for just basic needs for food and shelter and the need for child care that you have to have in order to work for the minimum wage of $6. 55/Hr. A hike in minimum wage is fun to talk about, but, in the end, economically speaking, it isn’t a worthy option. Higher wages mean higher costs, which mean higher prices across the board. With a $10 minimum wage, the ninety-nine-cent value menu at Wendy’s becomes the $1. 99 value menu, and so on, so what’s the point? If $7 an hour isn’t supporting your current lifestyle, then you have other options: a) team up with a friend or family member to help cover living expenses, B) change your lifestyle, or C) use that job as the stepping stone it is meant to be in you quest for better opportunities. Shepard, 2008, page 229-230) Ok so the minimum wage is increasing to $7. 25 in July 2009 that will make the annual income a total of $15,080. Congratulation! Single parents working at minimum wage you are now technically above the poverty line, however, you can almost bet on the cost to purchase everyday items to also go up as well. Economically in a mixed market like o urs in the US this is the normal course of things as costs to produce goods or services go up so will the sales price for the goods or ervices will follow suit to compensate for the increased labor cost, i. e. the $0. 70 raise from $6. 55/Hr to $7. 25/Hr come July. I found that even though we have federal minimum wage-state minimum wages vary widely with â€Å"27 states + DC being above the federal minimum, 12 states being equal to federal minimum wage rates, 6 being less than minimum wage, and 5 states do not have a minimum wage rate at all. â€Å"Note: Where Federal and state law have different minimum wage rates the higher standard applies. †Ã¢â‚¬  (WHD, 2008, consolidated table and p. 1) Why do the states vary so? The cost of living of within each state is so different the main logical reasoning. Some states are proactive with their higher wages by linking their increases to the Consumer Price Index in hopes to keep up with inflation. Others are lower but are held to the federal minimum wage anyway. The attempt to at least keep up with inflation is an honorable one however the output effect of inflation seems to keep the wages on the lagging side. You would expect minimum wage workers to typically be teenagers or young adults working their first jobs trying to gain skills and experience. However, many older adults are also filling those minimum wage jobs as while taking away taking away valuable experience needed to move on to higher paying positions. So how do we make more jobs? In our current state of recession in this country and the jobless rate mounting, we should consider placing a freeze on the minimum wage instead of adding to the unemployment rate with the next increase due in July 2009. By holding wages steady businesses are more likely to hire more laborers instead of letting go of laborers due to increase costs. We need all the help we can get to lower or at least slow the unemployment rate. It is estimated that for every one entry level/minimum wage position opening there are now 5 to 7 applicants. Minimum wage, good or bad, it is not helping those it was intending too. References Ehrenreich, B. (2001). Nickel and Dimed. New York: Owl Books Henry Holt and Company, LLC Messerli, J. (2007, December) A 20-Point Plan for Fixing America. Retrieved March 10, 2009 from http://www. balancedpolitics. org/editorial-point_plan. htm Sharp, A. , Register, P. , and Grimes, P. (2008). ECO 405 Economic Problems and Issues third custom edition. USA: The McGraw-Hill Companies, Inc. Shepard, A. (2008). Scratch Beginnings. Chapel Hill, NC: SB Press The 2008 HHS Poverty G _uidelines, _One Version of the [U. S. ] Federal Poverty Measure. (2009, February). Retrieved March 13, 2009 from http://aspe. hhs. gov/poverty/08poverty. shtml WHD. _ _(2008, December), Minimum Wage Laws in the States – January 1, 2009, Retrieved February 13, 2009, from http://www. dol. gov/esa/minwage/america. htm Wikipedia. (2009, February), Minimum wage in the United States, Retrieved February 13, 2009, from http://en. wikipedia. org/wiki/Minimum_wage_in theUnited_States Minimum Wage Good or Bad Minimum Wage Good or Bad Rachel L. Hathaway Professor Myung Han Economic Problems and Issues – ECO 40500816 March 15, 2009 Whether minimum wage is good or bad, has been an ongoing debate since before 1938 when the government set the first federal minimum wage at $0. 25/hr thanks to the Fair Labor Standards Act. The federal minimum wage is currently at $6. 55/hr with yet another increase to come July 24, 2009 to begin the federal minimum wage up to $7. 25/hr. Minimum wage was ideally set to help the working poor to stay out of poverty. Let’s do the math $6. 5* 2080=$13624 per year. 2008 HHS Poverty Guidelines SOURCE: Federal Register, Vol. 73, No. 15, January 23, 2008, pp. 3971–3972 Well, based on the 2008 poverty guidelines if you are a single person you are considered above the poverty line, however, if you are a head of household say a single parent with a child you now fall below the poverty line. It is easy to see that minimum wage will not cut it to make end s meet and provide for just basic needs for food and shelter and the need for child care that you have to have in order to work for the minimum wage of $6. 55/Hr. A hike in minimum wage is fun to talk about, but, in the end, economically speaking, it isn’t a worthy option. Higher wages mean higher costs, which mean higher prices across the board. With a $10 minimum wage, the ninety-nine-cent value menu at Wendy’s becomes the $1. 99 value menu, and so on, so what’s the point? If $7 an hour isn’t supporting your current lifestyle, then you have other options: a) team up with a friend or family member to help cover living expenses, B) change your lifestyle, or C) use that job as the stepping stone it is meant to be in you quest for better opportunities. Shepard, 2008, page 229-230) Ok so the minimum wage is increasing to $7. 25 in July 2009 that will make the annual income a total of $15,080. Congratulation! Single parents working at minimum wage you are now technically above the poverty line, however, you can almost bet on the cost to purchase everyday items to also go up as well. Economically in a mixed market like o urs in the US this is the normal course of things as costs to produce goods or services go up so will the sales price for the goods or ervices will follow suit to compensate for the increased labor cost, i. e. the $0. 70 raise from $6. 55/Hr to $7. 25/Hr come July. I found that even though we have federal minimum wage-state minimum wages vary widely with â€Å"27 states + DC being above the federal minimum, 12 states being equal to federal minimum wage rates, 6 being less than minimum wage, and 5 states do not have a minimum wage rate at all. â€Å"Note: Where Federal and state law have different minimum wage rates the higher standard applies. †Ã¢â‚¬  (WHD, 2008, consolidated table and p. 1) Why do the states vary so? The cost of living of within each state is so different the main logical reasoning. Some states are proactive with their higher wages by linking their increases to the Consumer Price Index in hopes to keep up with inflation. Others are lower but are held to the federal minimum wage anyway. The attempt to at least keep up with inflation is an honorable one however the output effect of inflation seems to keep the wages on the lagging side. You would expect minimum wage workers to typically be teenagers or young adults working their first jobs trying to gain skills and experience. However, many older adults are also filling those minimum wage jobs as while taking away taking away valuable experience needed to move on to higher paying positions. So how do we make more jobs? In our current state of recession in this country and the jobless rate mounting, we should consider placing a freeze on the minimum wage instead of adding to the unemployment rate with the next increase due in July 2009. By holding wages steady businesses are more likely to hire more laborers instead of letting go of laborers due to increase costs. We need all the help we can get to lower or at least slow the unemployment rate. It is estimated that for every one entry level/minimum wage position opening there are now 5 to 7 applicants. Minimum wage, good or bad, it is not helping those it was intending too. References Ehrenreich, B. (2001). Nickel and Dimed. New York: Owl Books Henry Holt and Company, LLC Messerli, J. (2007, December) A 20-Point Plan for Fixing America. Retrieved March 10, 2009 from http://www. balancedpolitics. org/editorial-point_plan. htm Sharp, A. , Register, P. , and Grimes, P. (2008). ECO 405 Economic Problems and Issues third custom edition. USA: The McGraw-Hill Companies, Inc. Shepard, A. (2008). Scratch Beginnings. Chapel Hill, NC: SB Press The 2008 HHS Poverty G _uidelines, _One Version of the [U. S. ] Federal Poverty Measure. (2009, February). Retrieved March 13, 2009 from http://aspe. hhs. gov/poverty/08poverty. shtml WHD. _ _(2008, December), Minimum Wage Laws in the States – January 1, 2009, Retrieved February 13, 2009, from http://www. dol. gov/esa/minwage/america. htm Wikipedia. (2009, February), Minimum wage in the United States, Retrieved February 13, 2009, from http://en. wikipedia. org/wiki/Minimum_wage_in theUnited_States

Activity Based Management Essay

Activity based management (ABM) is an approach to management that aims to maximize the value adding activities to the customers while minimizing or eliminating non-value adding activities. The objective of ABM is to improve the efficiency and effectiveness of an organization in securing its markets. It draws on activity based-costing (ABC) as its major source of information and focuses on managing activities to (1) reduce costs, (2) create performance measures, (3) improve cash flow and quality and, (4) produce enhanced value products in order to improve customer value (Business Dictionary.com). This ABM system’s top priority is in eliminating or improving those activities to increase profitability by seeking out areas where a business is losing money such as the factors which cause activities to be performed or activity cost to change. Undeniably, in order to improve an organization’s work processes and activities to effectively and efficiently meet the rapidly changing environment in this globalisation world, management practices and methods have changed over the last decade and will continue to change in future. THE TRADITIONAL ABSORPTION COSTING is the first system implemented to keep track of the true cost of a product or service. It assigns indirect cost to cost object and uses unsophisticated methods to assign indirect costs. It allocates overheads to production and service departments and uses small number of 2nd stage cost drivers to allocate costs from cost centres or pools to productions or cost objects. This system will only be appropriate when the (i)direct costs were the dominant costs, (ii)indirect costs were relatively small, (iii)information costs are high, (iv)there is a lack of intense global competition and (v)a limited range of products is produced, it might be difficult for every organization to use it. For instance, this system might not be appropriate for companies with complex processes and manufacturing practices. The large increase of indirect and overhead expenses will make the traditional costing method less efficient. Therefore, in 1980s, ACTIVITY-BASED COSTING (ABC) was introduced to overcome these  problems. ABC is a system for managing the organization better. It is a one-off exercise that measures the activities’ cost and performance, resources and the objects which consume them so as to generate more accurate and meaningful information for decision-making. It uses sophisticated or modern methods to assign the indirect costs. This ABC system allocates overheads to each major activity but not to departments and allocates costs to products or cost objects. However, it limits the company to have advantage of the ABC technique. It cannot be used for official record keeping as the IRS and stockholders require the use of traditional methods to create necessary reports for taxes. In another words, companies need to use two different costing methods in order to get the benefit. The system is costly to build, complex to sustain and to modify. Therefore, the emphasis has shifted from ABC to ACTIVITY-BASED MANAGEMENT (ABM) which is also known as ACTIVITY-BASED COST MANAGEMENT (ABCM) later on. ABC is a subset of ABM as the application of ABC evolved from a manufacturing product costing orientation to a management philosophy of activity management applied in industries and organizations (Business Dictionary.com). ABM has grown largely out of the work of the Texas-based Consortium for Advanced Manufacturing-International (CAM-I) (Investopedia). The CAM-I has initiated the development of a comprehensive glossary on ABCM terms by clarifying the significant confusion regarding the semantic and acronym associated with the activity based information (Investopedia). This ABM system makes the cost and operating information useful to improve decision making. Through the ABM analysis process, the management will gain a thorough understanding of its business processes and cost behaviour and management team in the company. In addition, the results of an ABM analysis can help a company generate more accurate budgets and financial forecasts (Investopedia). It gives management insight into the cost structures for making and selling diverse products. In a simplified term, ABC is used to answer the question, â€Å"what do things cost?† and for ABM, a process view is taken to understand factors which cause the costs to occur. This system focuses on the ways to redirect and improve the use of resources, by using  ABC data, to enhance the value created for customers and other stakeholders (Investopedia). These two systems (ABC and ABM) have attracted high levels of interest from both academics and practitioners since its emergence in the late 1980’s. It is mainly due to the significant change in cost management systems they have brought. Due to the lack of pertinence and relevancy of traditional costing that leads to mutual subsidy between products and cost, ABC and ABM are used to enhance or replace the traditional cost calculation methods. For example, ABM approach reports by activities while traditional analysis is by departments; ABM reporting is by sub-activities but traditional is by expense categories and ABM reporting can reports information on activities that are cross departmental boundaries whereas traditional is not allowed(Drury C, 2008). Thus, ABM is concluded to have more meaningful information as it gives more visibility to the cost of undertaking the activities that make up the organization and may raise the issues that are not highlighted in traditional analysis. Most forward-thinking companies have implemented them, or are in the process of doing so as it can be applied to different types of companies, including manufacturers, service providers, non-profits, schools and government agencies (Business Dictionary.com). CONTENTS 1. Features of ABM system _A. STAGES OF IMPLEMENTATION_ In order to implement ABM system, the companies are required to carry out the three out of the four stages in ABC (Drury C, 2008). The steps are listed as below: (i) Identify major activities that result in costs being incurred, The activities are the aggregation of units of work or tasks such as machine  set-up cost, purchasing cost and warehousing cost that use up resources. In order to identify all the activities within the company, activity analysis has to be carried out. The activities chosen must be at a reasonable level of aggregation based on the cost verses benefit criteria. In addition, the activities have to be either influenced by the total cost of activity centre or the ability of a single cost driver to provide a satisfactory determinant of the cost of the activity. (ii) Assign cost centers to each activity, and The companies should not use the arbitrary allocations in assigning the significant proportion of costs to activities as it will reduce the reliability of cost. They have to identify and assign the direct costs to specific activity and assign the indirect costs on cause-and-effect cost drivers. By doing so, the cost incurred on each activity can be determined. (iii) Determine the cost driver for each major activity In this stage, the drivers are called as activity cost drivers. In selecting the cost driver, there are two factors which the companies need to consider. Firstly, the cost driver should provide a good explanation of costs of each activity cost pool. Additionally, the cost driver should be measurable easily, and the data should be easily obtained and be identifiable with products. (The cost driver can be production or service oriented). _B. TWO CATEGORIES OF ABM APPLICATION_ Based on the source adapted by Kaplan & Cooper (1998), this system accomplishes its objectives through two complemetary applications which are the operational ABM (â€Å"Doing things right†) and strategic ABM (â€Å"Doing the right things†). Operational ABM enhances efficiency of operation and asset utilization and lowers costs. Its focus are mainly on doing things right and performing activities more efficiently. Management techniques such as activity  management, business process reengineering, total quality management, and performance measurement are used in the ABM application. As for strategic ABM, it attempts to change the activities demands and boost proï ¬ tability by improving activity efficiency. It focuses on choosing proper activities for the operation, eliminating non-essential activities and selecting the most proï ¬ table customers. Strategic ABM applications use management techniques such as process design, customer proï ¬ tability analysis, and value chain analysis. 2. Comparison between Activity-based management system (ABM) and traditional system ABM focuses on activity performed by business and hence, it views business as a set of linked activity that ultimately adding value to customers. Its goal is to satisfy customer needs while making fewer demands on organizational resources. Hence, ABM could have information of activities such as why activities to be performed, how to perform the activities and how well they are performed. In contrast, traditional system focuses on types of cost from departments. It gives less information to manager for the needs in decision making. ABM is better than traditional system as ABM could provide wider information and information could go deeply and more detailed as needed by the management in decision making. Besides, the ABM system only seeks to use cause-and-effect cost driver which is different than the traditional system. It does not rely on arbitrary allocation bases. As we can see from table 1, the information provided by both systems is about customer order processing. However, these two systems take into account different information while preparing the customer order processing. ABM focuses on information that is relevant in the process of customer ordering while traditional analysis focuses on the types of cost incurred in the customer order processing. ABM ANALYSIS RM Preparing Quotations 100 Receiving Customer Order 280 Expediting 120 Total 500 TRADITIONAL ANALYSIS RM Salaries 110 Telephone bill 170 Depreciation of Asset 120 Total 500 Table 1 In addition, ABM is different from traditional system in terms of the report approach. ABM report is determined by activities while traditional system is determined by departments. It can include crossing departmental boundaries. For instance, material purchasing process might involve not only one department but it includes inventory control department, purchasing department and account payable department. The manager will be able to know how the amount spent (e.g: RM 2000) to be used in purchasing material under ABM system. It may show the relevant information such as inventory reviewing, sending purchase requisition and sending purchase order. The manager will be able to know how purchasing of material works on and what are the reasons of purchase delay as well as how to minimize the cost of purchase. It focuses on information based on activity. As for traditional system, manager can get the information on material purchase which costs for RM2000 only. However, this RM2000 does not comply with the amount of goods order. By looking at one information itself, the reasons of non-compliance cannot be tracked as there is lack of information. Therefore, ABM system is better since it did not focus on information based on cost but it assigns  cost of activities to products according to product’s demand for activities and relies on cost centres and cost drivers that cause activity resource consumption. Other than that, it assigns activity costs to cost objects on basis of cost driver usage and measures resources consumed by cost objects more accurately. In addition, ABM system provides both information from value and non value added activities. As for traditional system, it provides information on value added activity only. Value added activity is an activity that supports primary objective of producing outputs. For instance, activity like colouring adds value to a book. Under value added activity, traditional report will show the amount spent in colouring since it adds usefulness to customers. Customers would likely to buy books with some colouring or some pictures rather than books with only words as it might help them in memorizing and understanding the information stated in the book better. However, if the profit does not increase like what the company expected, manager will be able to trace back the cost incurred by looking at amount spent in colouring – non-value added activity. Hence, non value added activity is important as it may affect the company’s profit. Non value added activity is an activity where an opportunity is available for cost reduction without decreasing product’s service potential to customer such as storing and moving raw materials. Under ABM system, manager will be able to draw attention on this issue and trace back the reasons such as waste in the production. Manager will be able to track the cost which has been wasted in the production by reducing material movement and improving production flow without reducing the value added to customer. In other words, customer can have same quality of products-same kind of books while management could reduce the cost of production. 3. Benefits and Limitations of ABM system One of the benefits of the system is to help the management in decision making. It provides better decision making as the information provided by the ABM system is more useful and reliable. The management can make informed decision about product mix, lines of business, process, product design,  services, capital investment and pricing. For instance, manager will able to make decision on how much capital to invest in new product and what kind of new product to be launched based on information that manager obtains in ABM system. Furthermore, ABM is a system for continuous improvements. The system is not just an accounting tool but it also provides many tools that can enhance organizational performance management. In other words, ABM system provides other information as well (the product mix, customer services, line of business and capital investment) that would be able to help an organization in its future development and improvement. For instance, an organization knows how to serve customer better by looking into information provided in customer services activity. ABM also provides a better understanding of cost driver. It is a factor that affects the costs associated with an activity. Managers apply activity- based management system to the operational activity in order to determine the cost to perform an activity and the cost associated with not performing the activity. Through this activity cost drivers, it seeks to provide an extensive view on the actual costs of an activity. For instances, we can see in the Mason & Cox. In Mason & Cox, they feel that it is expensive to implement the activity-based costing system because it is more complex and expensive to maintain. Nevertheless, ABM seems to be more helpful to them in term of improving the company profitability. For example, saving had been achieved by targeting non-value-added activities. Their real cost driver had been identified so that manager may know what to eliminate. The drop in the price of the high-volume lines had met with customer approval. Furthermore, ABM enables company to monitor and improve quality and delivery customer value by tracking cost driver. The new approach provided timely information about factors that were important to customers and factors that employees could control. There was no doubt that ABM had helped Mason & Cox to improve both profitability and customer value. Besides that, in Blue Cross and Blue Shield of Florida (BCBSF) needs more sophisticated cost information to make better decision in order to compete in the nature of the health care insurance industry and the need to manage the cost of operation like ways to  allocate administrative cost to the products and services. Hence, BCBSF decided to implement ABM system. ABM helps manager to examine the analysis of value added cost and non-value added costs. A value added cost is the cost of an activity that cannot be eliminated without affecting a product’s value to the customer. Some value added costs are always necessary, as long as the activities that drive such cost are performed efficiently and effectively. For instances, we can truly understand this concept in the Carpenter Company. The senior vice president of sales and marketing said that pillow fall into two distinct segments, the â€Å"commodity† part of the business and value-added line. For the â€Å"commodity† part of the business- consists of polyester-filled pillows which are a normal pillow. Besides that, the â€Å"value-added line†, which features technology-driven fibers and fabrics designed to enhance sleep. As we can see, Carpenter Company had produced variety function of pillow like muscle stress and pain relieve pillow as well as pillow which reduce unnatural awakenings. Today, consumers are better educated about the benefits of various sleep surfaces and they recognize that the role of pillow can play in quality sleep. Although the price for a pillow which features technology-driven fibers and fabrics designed will be expensive but it can help consumer to have a quality sleep. Thus, consumers will not mind to pay more to improve a quality sleep. As a result, we can see that the â€Å"value-added line† may help company to gain profit. In contrast, a non-value added cost is the cost of an activity that cannot be eliminated without diminishing the value. Non-value added cost activities are assumed to be unnecessary as a result it always be minimized like storing and handling inventories; transportation of raw material or partly finished products. If this non-value added costs happened, company may reduce or eliminate it by careful redesign of the operational process. As we can see how Taipei Fubon Bank deals with those non-value added costs in this mature and complex market. Taipei Fubon Bank needs to accurately determine profit and loss data by customer and customer group so that it could help bank to reduce operating costs and increase profit while maintaining it quality of service. Hence, the bank had developed a customer profitability  management (CPM) system that provide thorough information regarding cardholder spending pattern and profitability to build highly targeted marketing and retention program. This system did helped bank to reduce cost by updating timely management report, thus speeding marketing strategy adjustment decision. However, they wanted more information regarding a detailed analysis such as the profitability by card type at the individual customer level. As a result, they entered into the new CPM system by performing an in-depth analysis at the transaction level. The new CPM system contributes to division-wide productivity through the delivery of as-needed reporting to the user custom portal. The reporting may include customer spending habits, customer ranking by demographic criteria or the profitability of co-branded card by service channel. After using this system, Taipei Fubon Bank has significantly improving division profitability and now they can make more faster and accurate decision. In Dow Chemical Company (DCC) which produces chemicals and plastics implement ABM to identify the activities they perform, eliminate non-value-added activities, determine cost drivers, set activity price to charge users and benchmark these price to ensure that they are competitive. While ABM has brought benefits to DCC but also brought many challenges to them. For instances, DCC feels that it is difficult to capture cost driver information without creating additional work. As the activity analysis became more and more detailed, DCC had to justify the complexities in obtaining and processing activity information. Ultimately the company decided that should not break activities down to task level, otherwise the resultant activities were too small and numerous. By comparing with the traditional system, ABM system is more costly. Implementation of ABM system requires many resources such as human resources and time consuming. Different activities require different resources. Data that concerns on major activities must be measured, collected and entered into system. As we can see that Scottish National Blood Transfusion Service (SNBTS) feels that ABM system is a timely and costly system. By using ABM system, they need to implement a thorough mapping of all processes, drill down and filtering of all â€Å"relevant† activities, the identification of cost  driver and others are enormous challenges. Thus, this may cause the company to take up much time and resources because this company consists of over 1100 staffs. Furthermore, everyone may have different point of view and searching for different data therefore they need times to eliminate and collect the right data into the right activities. Incorrect data collection and allocation may result to setbacks during the implementation stages and may jeopardize the whole project. Misinterpretation might also happen in ABM system. This is because most of the information is interrelated and ambiguous. For instance, cost assigned to material, products and customer may be relevant and cause the manager to overlook some information. This causes misinterpretation happen and link to the wrong decision making. Wrong decision making may cause some issues happen in the operation such as production delay, over-production and wrong shipping. Reports by using ABM system are suitable for internal users only and cannot report to external users. This is because ABM system has limitations since it does not conform to generally accepted accounting principles (G.A.A.P). Stakeholder might not be able to understand the reports on ABM system and therefore, ABM system is only restricted for internal use. CONCLUSION Previously, company usually apply traditional accounting system to manage the company’s operational activity but this system does not provide more detailed information that needed in this competitive environment. Therefore, managers require better information by developing activity-based management. This approach allow everyone in the organization understand where costs are being incurred, why are they being incurred and how these activities contribute to a higher value added to customers. Moreover, ABC explores to identify activities that can be eliminated or improved. In additional to that, communications will improve and changes are easier to make if company conducts the activity-based approach. In addition to the above purpose, we feel that ABM system may be useful for a company. This is because it not only focuses on the product of a company but also the services and customers of a company. Besides that, it also help company to find out the cause of a problem, action plan for future development as well as evaluation of managers’ or departments’ present performance. In addition to that, it also helps company utilize true cost data which generated through ABC for further improvement in business profitability in the long run. ABM in best practice firm lies at the heart of the decision-support process. Integrating ABM within the total information and management control system of the organization can lead to quantum improvements. Therefore, an organization needs to understand and address the common pitfalls and barriers to success at every stage of implementation. Besides, the ABM system should include and draw on the insights of the people who use it no matter during planning, activity analysis or other so that the implementation will success when the people use the system. Organization should tailor to the unique strategy, structure, capabilities, and needs of the firm so that the implementation will be succeeded. This is because ABM will not look the same in every organization although it is a universally useful concept. Finally, we have an in-depth understanding of ABM during the process of working out this assignment and we found out that activity-based approach has more advantages than disadvantages. We have learned many things like time management and how to get along with our group members. Although we spent much time for discussing the lessons and recommendations, we didn’t have any argument during our discussion and everything went on smoothly. BIBLIOGRAPHY _Advantages, Disadvantages and Limitations of Accounting Based Costing (ABC) System_. (n.d.). Accounting For Management. Retrieved March 9, 2013, from http://accounting4management.com/limitations_of_activity_based_costing.htm Business Dictionary.com. (n.d.). Retrieved February 1, 2013, from http://www.businessdictionary.com/definition/activity-based-management- ABM.html Cardos,I.R., & Pete,S. (2011). _Activity-based Costing (ABC) and activity-based management (ABM) implementation – Is this the solution for organizations to gain profitability?._ Retrieved March 9,2013, from http://www.revecon.ro/articles/2011-1/2011-1-9.pdf CIMA. (2001). Techinical Briefing. _Activity-based management – An overview_. Retrieved March 10, 2013, from http://www.cimaglobal.com/Documents/ImportedDocuments/ ABM_techrpt_0401.pdf Drury, C. (2004). _Management and Cost Accounting_, 6th Edition. International Thomson Business Press, London. Drury, C. (2008). _Management and Cost Accounting_, 7th Edition. International Thomson Business Press, London. Eden, Y. & Ronen, B. ( 2002). _Activity based costing and activity based management: The same thing in a different guise?_. Retrieved March 9, 2013 from http://boazronen.org/PDF/Activity%20Based%20Costing%20and %20Activity%20Based%20Managment.pdf Gary, J. (2013). Power of Pillow. The Business Journal for the Sleep Products Industry. Retrieved February 23, 2013, from http://bedtimesmagazine.com/2013/01/power-of-pillows/ Implementing Activity-BasedManagement: Avoiding the Pitfalls. (1998) Instituite of Management Accounts. Retrieved March 9, 2013, from http://www.imanet.org/PDFs/Public/Research/SMA/Implementing %20Activity%20Based%20mngt_Avoiding.pdf Investopedia. (n.d.). Retrieved February 1, 2013, from http://www.investopedia.com/terms/a/abm.asp#axzz2Jng4KVP6 Leo, S. (2010). Taipei Fubon Bank Uses Activity-Based Management to Build Customer Profitability. Retrieved from http://www.b-eye- network.com/view/12857 Managing costs and time for customer value. (n.d). Retrieved from http://highered.mcgraw-hill.com/sites/dl/free/0074711903/ 50509/sample_ch15.pdf May & Margaret. ( Jan 1995). Activity-based management accounting. Management Accounting, 73(1),40. Retrieved from Business Source Complete, Pro Quest. Retrieved from http://search.proquest.com. Sarkis, Joseph, Meade, Laura, Presley & Adrien. (2006). An activity based management methodology for evaluating business processes for environmental sustainability. Business Process Management Journal, 12(6),751. Retrieved March 8, 2013, from Business Sources Complete, Pro Quest, http://search.proquest.com SAS. (n.d.). Activity-based management. Driving profitable growth through activity- based management. Retrieved March 10, 2012, from http://www.sas.com/solutions/abm/#section=2 Sharman, P.A. (1993). Activity-based management: A growing practice. CMA Magazine, 67(2), 17-22. Retrieved from Business Source Complete, Pro Quest. Retrieved February 30, from http://search.proquest.com

Effects Of Technology On Socialization - 1300 Words

Anti-social socialization: The effects of Technology on socialization of the youth in the 21st century Robert Elz University of North Georgia Abstract In the 21st century, technology is integrated in examines that to every aspect of our lives. It is prevalent is all sections of our culture, our homes, our schools and our communities. But what kind of effect is it having on those in their formative years? Does the abundance of technology have an effect on the newer generations and is it something we should be concerned about? It is the premise of the article that social media plays a major role in the social development or socialization of younger generations in the 21st century. To demonstrate this, the author†¦show more content†¦The basics are that social interaction is a key factor in how we develop socially, from the aforementioned text we can conclude that our being is in large part a result of the influences in our lives during the developmental years. In short, social interaction makes us who we are. I believe that given information from the readings, specifically the article, ‘Well-prepared in Their Own Eyesà ¢â‚¬â„¢ by Scott Jaschik, social media is having an adverse effect on the socialization and social interaction of the younger generations (Jaschik, 2015).This inverse relationship between age and social media, if it exists, should be demonstrable by a simple survey. The importance of the impact of social media at an early age is further outlined in the description of how human beings are molded, or socialized by Dennis O’Neil, in short, he claims that the most essential part of the socialization of a human being is their early or formative years (O’Neil, 2011). The harmful effects of media on children is not, by any means, an unresearched concept. 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Today, the landscape of communication is changing with the popularity of email, texting, and webcams; with advancing technology there is one group that is becoming more and more isolated, senior citizens. The isolation may come as a surprise but according to the U.S. CensusRead MoreGender Socialization Of Children : Gendered Toys, Media, And Parental Affects Child Development1289 Words   |  6 Pagessubconsciously succumb to these expectations that are ingrained in our minds virtually since the day we are born. These expectations often influence how one i nteracts with another. This is especially important when taking into consideration the effects that gender socialization of children through gendered toys, media, and parental affects child development. Introduction Once a child is born, he or she learns to view the world based on the behaviors of others. The child’s primary caregivers, usuallyRead MoreSocialization Is The Lifelong Process Of Learning1624 Words   |  7 PagesSocialization Socialization is the lifelong process of learning. Socialization is vital to the functioning of an individual, for society is continuously changing, requiring constant adaptation. For example, an individual who grew up in the 1970s would function poorly if they did not adapt to learning about and using modern technology. It begins shortly after birth; early childhood is the period of most intense socialization (O Neil, 2011). Different stages of life call for learning of differentRead MoreEssay On Technology And Technology1108 Words   |  5 Pagesworld, technology has revolutionized society’s standard of living. Technology has expanded over the past couple decades. Technology’s potential lies in the hand of the users and whether they decide to use it in a proactive or detrimental manner. Teenagers are more willing to socialize on their cell phones rather than with the people around them. Society is too dependent on the use of technology which can lead them to isolate themselves in the virtual world. On a positive note, technology allows peopleRead MoreThe Social Factors Of A Young White Female Essay1491 Words   |  6 Pagesis an increasing gap between class levels. Technology is also creating another problem within society in regards to the socialization of children. But how do these social factors effect a young white female in a middle class family, who is attending a scholarly university? Social factors and issues impact many individual’s life chance’s, including, my own. Although social factors and issues effect some people more drastically than others, these effects can be both, positive or negative therefore