Page 582 - Sensors and Control Systems in Manufacturing

Economic and Social Inter ests in the Workplace
making cost estimates. Its general accounting system and cost- 535
accounting system should be reviewed periodically to ensure that
basic cost data are collected and classified according to an established
accounting plan.

11.3 Communication
In a business organization, gathering and using information about the
operation of the business may be a fairly simple matter. A purchasing
agent, production manager, or sales manager who has only a few employ-
ees can observe day-to-day activities and exercise direct supervision
and control. When a business becomes larger, however—when more
employees and several levels of supervision are necessary—the pro-
cesses of obtaining information and directing the business become
more complex.
The larger business requires a communication system for collect-
ing information about operations and distributing it to managers in
the company. Such a system includes four processes:

• Accumulating
• Analyzing
• Reporting
• Communicating

Thus far, discussion has emphasized techniques for accumulat-
ing, analyzing, and reporting cost-accounting data. Attention must
be given to methods of communicating the information to those in
the firm who need it in order to accomplish their tasks.
Communication involves both a sender and a receiver of infor-
mation. A manager sets up an accounting system as a sender. The
manager assures that a system produces certain reports and analyses
of the basic counting data.
If the information is to be useful, the needs of those who will
receive it must be known and considered. Thus, communication
depends on a two-way exchange between the senders and the
receivers. Figure 11.2 illustrates a communication network in a busi-
ness organization; the arrows show the two-way flows of information
between senders and receivers.
Communication also requires that the information sent and
received be useful. To be useful, information must meet the following
standards:
• It must be suited to the needs of the receivers in form and
content.
• It must be free from clerical errors, incorrect classification,
and unrealistic estimates.