Name, Describe, and State Why an Organisation Would Adopt Each

question 33

Essay

Name, describe, and state why an organisation would adopt each of the four organisational orientations to manage and staff a global operation.

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Definitions:

Common Fixed Expenses

These are fixed costs that do not vary with the volume of production or sales, such as utilities, rent, or administrative salaries, shared across different products or departments.

Variable Costing

An accounting method that considers only variable costs as product costs and treats fixed costs as period costs to be charged in full against the current period's revenue.

Direct Labor Cost

The expense associated with employees who are directly involved in the production process.

Net Operating Income

A financial metric that calculates a company's profitability by subtracting operating expenses from its operating income.