Portfolio assignment unit- 4 PDF

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Portfolio unit - 4...

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Portfolio assignment unit- 4 Qualitative factors are non-financial in nature but are important for management to consider when making decisions. The outcomes of qualitative factors are impossible to measure from certain actions. Based on relevant costs and revenues usually, managers make the decision. Through a certain decision and actions, managers try to forecast what the future costs and revenue will be. Qualitative factors are: Morale, Customers and Community Morale: The impact on employee the morale of adding a break room to the production area and give an extra 30 min break for launch and prayer in the afternoon which is boost up the energy of the employee is extremely important for all successful companies. If we consider vacuum manufacturing company and the production costs than morale can play a significant role to minimize the production cost results in not going to the vendor with a high price. Also, we can say about google cafeterias where all the employees can eat in the daytime which boosts them up and felt very energetic and production will come automatically. Customers: In business, the customer would get the highest priority around the world. The opinions of the customers in a business is a big asset. Based on the interaction approach with the customers, develop total quality management with the customers, customer relationship management, and customer experience management together an organization can develop comprehensively which can not be measured financially but qualitatively it will bring the good results. Community: Motivation is identified is one of the best qualitative factors. Some of them may be financial and non-financial as well as personal recognition, personal development, andworking conditions, etc. In order to maintain engagement and motivation can bring good fruits for the organization.

Justified a situation where the qualitative factors would outweigh the quantitative results: Qualitative factors may outweigh the quantitative results in making a decision. For example, assume management at XYZ company believes there will be a decline in the country for donor grants after next year. As a result, they have to cut the staff to implement a big project. Hiring local contractual staff is much easier than fixed-term staff but they are not enough eligible for an international standard. The significant fixed-term staffs often associated with many other facilities/costs like pension, medical, insurance, etc which is very difficult to reduce in the short-run if fund declines. Thus, the qualitative factor of being able to reduce fixed-term staff costs quickly by recruiting local staff may outweigh the quantitative factors. If the quantitative differential analysis for XYZ company brings a different result, it showed the company should recruit local staffs, management should consider the qualitative factors before implementing this decision. Management must consider whether short term local staff quality would remain the same as fixed-term staff. Of course, the financial stability of the company must be considered as well. It will not bring good results if suddenly deduct or change the staff. Rather need to explore other donors who are willing to donate the company along with common donors. Because employee morale will be spoiled if some of them are terminated because of fund which will bring a negative impact on the company in the long run. So, the qualitative factors would outweigh the quantitative results when performing differential analysis.

References: Qualitative factors — Accounting Tools https://www.accountingtools.com/articles/2017/5/8/qualitative-factors What are Qualitative Factors? https://www.myaccountingcourse.com/accounting-dictionary/qualitative-factors

Be Aware of Qualitative Factors https://saylordotorg.github.io/text_managerial-accounting/s11-09-be-aware-ofqualitativefactor.html Improving customer-oriented decision making through the ... https://www.tandfonline.com/doi/full/10.1080/12460125.2016.1187417...