Proceedings

THE ROLE OF COSTS AND CONTROL IN ENSURING
A SUCCESSFUL MANAGEMENT IN THE DECISIONAL
PROCESS
Stefania-Eliza BANA (PANCIU) 1 & Florinel Marian SGARDEA
Bucharest Academy of Economic Studies, Romania
ABSTRACT
Knowing the costs represents an important factor when taking decisions or planning future
activities. The analysis and registration of data regarding the costs of past activities is only
part of the cost accounting. Managers are preoccupied both by the future costs - their level
influences production and supply decisions – and by price politics. Considering that all firms
are preoccupied with continuous cost reduction, in this material we want to debate on this
subject that is of major importance for any manager, regardless of his or her field of activity.
We will try to answer to the following questions:
How can we effectively reduce business costs?
What should be the priorities of the management of companies in 2011?
“The strategy of an enterprise is the art of selecting and optimizing the resources and the
means of all type that are available, in order to reach one or more goals of progress,
imposing to the competition the place, time and conditions of the competitive struggle” –
Maria Niculescu (2003). From here we can understand the important role that the resources
consumption analysis has, the analysis of costs when evaluating the results obtained. Between
cost analysis and the enterprise strategy is a double connection. On the first hand the results
obtained from cost analysis and accounting are important for strategic decisions of the
enterprise, and on the second hand management accounting provides us information
regarding the costs of products, services and activities. By comparing them with the turnover
obtained by a product or service, we can calculate the margins and profitability for every
level of analysis. Comparative analysis of the profitability of products is important when
deciding the product portofolio of the firm. Choosing a method for calculating the costs is
determined by the tight relationship between the type of production and the type of
corresponding evidence of the consumption. In general, the specific of the manufacturing
technique determines the method of calculating the cost which suits it best. The principles of
organizing [Călin O., Cârstea Gh., 2002, p.76-80] modeled the structure, management and
results of the enterprises along the XIXth and XXth century. It is time to renounce to these
principles in order to adopt new ones. Contemporary enterprises must engage themselves in a
radical mission of reinventing the working arrangements.
KEYWORDS: support costs, strategic management, Target Cost, fixed costs, variable
costs
1
Correspondence address: Stefania-Eliza BANA (PANCIU), Bucharest Academy of Economic
Studies, Romania; email: elizabana@yahoo.com
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