Universal Electronics Case

1383 Words6 Pages
3) What are the factors that lead to or impede successful ABC implementation (i.e., individual, organizational, technological, external) and which factors were present in the case of Universal? Do these success factors tend to be more behavioral or technical in nature? Universal Electronics’s standard costing system was basically allocating large pieces of overhead to production processes, and burying essential elements of manufacturing costs. These methods not only created incorrect costs, but also they did not provide the costing accuracy or level of detail needed in that competitive business environment. There are several factors, or lack thereof, that can have a direct impact into a successful or unsuccessful ABC implementation, and these can be categorize as follows: * Individual Factors: * There should be individual(s) with expert knowledge of ABC in order to successfully implement this system into a company. As in the case of Chris Richards, not only he provided guidance throughout the initial steps, but also he was able to make senior leadership comfortable with the change and aware of the benefits that it would bring. * Organizational Factors: * The proper method for implementing ABC system is by first establishing a cross functional team. Key members of all company’ departments should be represented in these teams, and the primary objective should be to set the parameters, cost pools, and cost drivers in such way that will benefit every side of the business.There is a natural organizational barrier that arrives when a company is trying to modify its existing practices, and that is the reluctance to change and employee pushback. People tend to reject new ideas that entail the modification of their routine behavior or job responsibilities, oftentimes due to terrifying thoughts of the unknown and the uncertain yet to come. Change has

More about Universal Electronics Case

Open Document