Management Effects of Variances Control or Standards on the Ethical Issues of Product Quality - Essay Example

Fluctuations in variances such as cost, production, and price need to be controlled since these have a direct effect on the product or service quality attained. Cost control entails the identification of the standard cost of output attained (Malmi & Brown, 2008).

Ethical issues arise when cost control is not achieved through the comparison of the total standard cost with the total actual cost; hence, needs to be traced to the responsible managers and tasked for the outcome of the failed cost controls. Whenever there are huge deviations between the costs aspects, the quality of products or services offered will be affected since the management may tend to vary the prices charged too (Kaynak, 2003). Maintenance of high-performance standards may result in ethical issues in that it would result in the production of high-quality goods and services.

However, this may be at a high cost, which in turn may result in raising prices that may subject the management to ethical wars by quality control bodies and consumer confederations. In the process, managers will be required to provide accurate representations of the production and quality processes. This will be in consideration of the application of variances as accounting information for the management control tool (Malmi & Brown, 2008).ReferencesKaynak, H. (2003). The relationship between total quality management practices and their effects on firm performance.

 Journal of operations management, 21(4), 405-435.Malmi, T., & Brown, D. A. (2008). Management control systems as a package—Opportunities, challenges and research directions. Management accounting research, 19(4), 287-300.