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ACCOUNTING ESSAY: QUESTION ONE. RIVERS DANCE SCHOOL Ashleigh Gehlig When making a drastic business decision such as the one proposed by River's Dance School, it is important to go about making the decision in the appropriate manner, through the use of a formal decision-making model process. This should be done with the aid of relevant information generated in the accounting process and through an evaluation of the effectiveness of the dance school's ownership structure. When deciding whether or not to close the River's Dance School, it is in the best interests for Dana and David to follow a formal decision making process such as the CACE decision making model. CLARIFY. The first step is to clarify the dance school's objectives, diagnose the problem and outline any possible constraints associated with solving the problem. Dana and David's objectives when they established the River's Dance School was most likely to run a successful, profitable business with good student relations and positive feedback. It is imperative that Dana and David clearly identify these reasons, for running the business as Dana and David can then ensure that they meet these objectives in making a decision. The reason they are now contemplating closing the business is because of the schools decreasing annual profitability - an important objective that over the past three years they have failed to meet. ...read more.


Now that the decision has been made, Dana and David must then reflect back on how it is to be carried out and check again for any hidden problems. In the shortlisting stage, Dana and David had found that the best way to redo the class selection at the school is most likely to continue the old classes, as to not lose existing students but to also bring in new teachers who teach new types of dance, such as hip hop. Hidden problems associated with this plan may lie in resources, such as where the new teachers may come from. Dana and David need to investigate this before the decision is executed. EXECUTE. The final stages of this decision are to plan, making precise arrangements to carry out the idea. Then they must control the decision, which means following the decision through. And finally to review the decision and its outcome leading to the eventual question, did we solve the problem? The planning stage for Dana and David will most likely involve interviewing new dance teachers; preparing budgets involving class fees and dance teacher's wages and finally advertising the new classes on offer. In the controlling stage Dana and David will see if they are successfully meeting their budget; if the advertising is working and if the newly hired teachers, are the right people for the job? ...read more.


Also if one was a dance teacher, the other may have had excellent management skills to aid the business in its operation. Thirdly as a partnership, they are able to share both the workload and decision making, which takes a lot of pressure off each individual partner. Finally all business dealings within a partnership are confidential and only government departments need to be informed of business dealings. However a partnership does come with drawbacks. With the decreasing profitability of the school, if they happened to go into debt, they are both personally responsible for covering this debt, by law. Even if it is solely one member's fault, the others are still responsible if he/she is unable to cover it, called unlimited liability. Secondly disagreements are frequent in partnerships and can result in the business being unworkable. Finally partnerships generally have a limited life - with endings resulting from possible disagreements, as mentioned or from the death of one partner for example. In conclusion it is essential that Dana and David follow a decision making model before they decide on closing down the Rivers Dance School, to ensure all alternate possibilities have been looked at. However this may not revolve solely around items relating to the business's profitability, with the success of operating in a partnership structure also a vital point to consider. ?? ?? ?? ?? Ashleigh A Gehlig 12:04 1 Accounting Yr 12 2005 ...read more.

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