BUS 322 Lecture Notes - Lecture 10: Knowledge Base, European Cooperation In Science And Technology, Cost Driver

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 322
• Professor: Mahmoudian Fereshteh

Document Summary

Org achieve goal prompts creation of org (non profit hospital provides superior health service + cover operating cost, commercial firms provide goods/services + competitive profit, city gov provides essential services to citizen + budgetary limits) Using scarce resources & making complex trade offs among competing uses => reliable quantitative, qualitative cost management information abt relative costs and benefits of alternatives. Support service (indirect) departments: provide service internally within org (finance, acct, legal services, hrs) Production (line) departments: provide services/goods to customers, clients, public citizens. => support service costs (resources to provide support services) included in production departments as indirect/overhead costs => allocation amount, methods affect decisions production departments (internal vs external support services, pricing, product mix) Complex, unique org => distinct procedures and cultures. Management of information technology in foreign countries => too specialized to maintain internal support services. Technology, complex market, political situations => outsource = competitors gain strategically important knowledge (internal auditing)