ACC1AMD Accounting for Management Decisions

Article Summary Assignment

Question 1

Chu (1) notes that football clubs are not businesses per se since they fail to fit with the profit-maximising philosophy upon which most business organisations operate on. the author puts up a series of arguments against labelling football clubs as businesses and one of those arguments is that they engage in overspending habits as opposed to maximise on profit-making ventures as most businesses would often do. The author claims that some of Premier Clubs that are owned by American owners like Manchester United and Liverpool are profit-oriented seems that they seek to exploit the financial unregulated world of the league; something which they can never engage in back home in the US where draft systems and taxes on excess pay bills are in full effect. On the contrary, the author argues that such oligarch Premier League clubs like Chelsea and Manchester City are not necessarily in need of profits. They, in fact, engage in extensive overspending in relation to their revenue-base in order to look for on-field club success. Even with clubs securing broadcasts rights and sponsorship, the act of overspending as opposed to minimisation of expenses, which does not conform to businesses philosophy, would result to wage inflation for players thereby reducing revenues for clubs.

The author further argues that unlike businesses where, brand loyalty is not that strong, in football clubs business, fans are so loyal that they pass this to their children. It is agreed that though football clubs possess business-like features like operating in the entertainment industry; they are also more of mutual organisations or just mere community assets. Thus, in order to end the current high ticket prices, the author suggests that just like the Bundesliga, fans should demand to constitute the majority of shares in clubs they support in a bid to maintain control.

Question 2

Hines (91) posits that nature is indeed excluded from acts of accounting calculations. The author ascertains to the fact that all matters within the entire nature are interdependent just like how the rain forest can never be excluded from the Rubber Tree since it exclusively depend on it for shade. The author goes ahead to postulate that accounting, by all means, quantifies but not in all occasions. In the case of nature, quantifying it in form of monetary value would result to one loosing significant level of value and benefits that cannot come from just the money earned. However, due to the very nature of human beings of quantifying nature, there is a likelihood that they would overlook these invisible benefits that come from nature and engage in perceiving it as financial commodity hence reduce its value to fit with the potential buyers willing price.

The article argues that while it is possible to account for nature, it will be very inappropriate to put a price figure on it altogether. The risk that comes with quantification of nature exposes human beings to significant environmental threats like climate change and global warming. Thus, to ensure that nature is protected and preserved for its irreplaceable benefits, the author notes that it will be important to speak for nature and thereby discourage financial personnel against inclusion of nature in financial accounting languages.