The Cost Of Doing Business In The Modern Enterprise System Management Research

The basic direction and goal of reforming the State-owned enterprises is to establish modem corporate systems. Cost management should be considered the most important thing among other managerial matters for it relates directly to the survivability and profitability of a business. For this reason, greater effort should be made on the cost management and a more efficient cost management system must be set up in line with the corporate governance structure. This paper intends to approach the ways of exercising efficient cost management by discussing the characteristics and methods of cost management within a modem enterprise.We have noted the following facts which make the reform of cost management necessary--the organization and rules of the prevailing cost management do not meet the requirements of modern corporate system, the backwardness of the current cost management methods can not achieve satisfactory controls over costs, the management staff in most businesses do not have the competence to conduct efficient cost management, the use of high technologies has brought material effect on the allocation of cost and expenses, some macro economic policies do not work along with enterprise cost management.The reform of cost management includes extending the management functions, reforming the management institutions, designing more adapted cost management systems, establishing cost control systems, improving the means of cost management and training more competent cost management personnel. The cost management methods of a modem enterprise include cost forecasts, cost decisions and cost control. External factors affecting cost management include the macro environment and the social environment. Both the external and internal elements relating to cost management must be taken into account when exercising cost management in order to identify the effective solutions for problems.Cost control constitutes an important part of cost management. The procedures of cost control include the establishment of standards, the reasoning of control standards, the enforcement of cost control standards, the computation and analysisof variances and the elirnination of the variances. Great effort should be made oncost designing and product designing which are different from traditional methodsused to cut down cost. Variable coSt accouning, quality coSt accoUnting, just-in-timeInanMng method and acivity cost accounting shouJd be stUdied in dePth andaPPlied to the cost managemen praCtice.