Your best friend, Jason Bell, has just graduated from university and started his first job as a trainee accountant in a medium-sized manufacturing company. One of the first things that he notices is that the monthly manufacturing performance reports focus only on costs and profits. One of his major tasks is to produce this report and provide a written commentary for management that explains the causes of high or low monthly performance. Key issues that he has been asked to focus on include the reasons for any increase or decrease in monthly costs or profits by product line, and recommendations for any actions or changes needed to improve future performance. After struggling with this task for two months he meets with his manager, Arthur Ford. Jason is interested in making changes to the content of the performance report and, in particular, he suggests that the company start to collect and report data on non-financial performance. Ford is not very enthusiastic about Jason’s ideas and responds:
Why should we waste our time collecting the new data and reporting on non-financial performance when our senior managers are only interested in profits and ways to improve those profits? Even if we did go down this path, how would we choose which particular nonfinancial measures to report, and how could we justify the cost of the extra data collection? And how would you relate non-financial performance to financial performance? Our senior management do not like change, particularly changes that cost us time and money and they have never hinted at any dissatisfaction with the current monthly reports.
Jason has asked you to help him put together a paper that provides the case supporting his suggested changes.
Write a report that outlines the proposed changes and includes arguments to support Jason’s case for change, making sure that you address each of the concerns of Arthur Ford?