Role of Revenue Recognition in Performance †MyAssignmenthelp.com

Question: Discuss about the Role of Revenue Recognition in Performance. Answer: Introduction Woodside Petroleum is the major player in the production of gas and oil in Australia and the biggest autonomous devoted gas and oil company of Australia. The company is headquartered in Perth but has an international presence through its recognition of world-class abilities as a developer, an explorer, supplier, and a producer. Furthermore, the companys mission is to offer superior returns to shareholders through realizing its vision of becoming an international leader in upstream gas and oil. Further, the company is also the most experienced operator of LNG and biggest gas and oil company. Woodside Petroleum has also proved its credentials to the business world and there was a time when it was criticized for few reasons (Woodside Petroleum, 2016). Since every single company has their own strategy and outcomes, similarly Woodside also has the features that have assisted it in building itself a brand image. Based on the functioning of Woodside Petroleum, it can be observed that oil and gas industry is prone to various fluctuations and risks that pose a major threat to the overall operations of the company. The company manages its strategies on three ideologies that are enhancing the importance of their core resources, increasing their abilities, and developing their portfolio (Woodside Petroleum, 2016). Further, the company has a powerful foothold in the gas and oil industry with a reliable manufacture base, special capabilities, and physically powerful interconnections to generate excellent projects. Moreover, the values, missions, and vision of the company are the prime features that play a key role in offering a competitive edge to it. Benefitting the company with a significant generation of revenue together with the provision of equivalent importance to the stakeholders are its most vital assets that are establishing a resonant prevalence in the segment of oil and gas industry. Moreover, vision is something that encourages the operations of the company and that ranges betwixt different companies producing different outcomes (Petersen Plenborg, 2012). Nevertheless, the strategic management of Woodside Petroleum has the vision to be a global leader in such industry and organizational values are of sufficient level within its framework. Besides, the companys management entrusts faith in various values that are relevant for an organization in the long-run duration with comprehensive success under the belt (Laux, 2014). In addition, the management of Woodside believes in managing a transparent business with enhancement of fulfillment of a commitment that they intend to provide to the people and to the business world r espectively. Nonetheless, the companys management gives undue importance to core values of organizational behavior that are sustenance, admiration, truthfulness, brilliance, and discipline (Parrino et. al, 2012). Apart from all significant values of the company, the themes that are functioning as a driving force to the vision of Woodside are of supreme significance. The companys prime distinctive feature is the maximization of production based on its enhanced abilities to increase the revenues and that has regularly allowed it to emerge as the top performer. Woodside Petroleum has a proven accomplishment record in the process, structure, and plan of excellent FPSO operations, subsea skill, seismic procurement, LNG plants, processing, and underwater drilling (Woodside Petroleum, 2016). The establishment of distant affairs from the Pluto Support Centre in Perth is very beneficial in minimizing the working costs and enhancement of preservation results. Further, the reason why Woodside has been effective in attaining a competitive advantage over other market participants can be attributed to the fact that it has a powerful relationship with its stakeholders and a strong base of the asset (Woodside Petroleum, 2016). Another strategic management practice implemented by the company is its adoption of innovative technologies in its various operations like floating LNG, near shore liquefaction technologies, etc. In addition to this, the company also prioritizes on enhancing its petroleum provinces by focusing on the present segments of Atlantic margins, Sub-Saharan Africa, and Australia respectively. All these strategic management practices allow in fulfillment of organizational objectives and these are aligned with five core values of the company that are respect, sustain ability, working collectively, integrity, disciple and excellence (Peirson et. al, 2015). Overall, the strategic management practices implemented within the companys framework has assisted it in remaining sustainable in the business and attain competitive advantage through investments in RD (research and development) for bringing innovation in relation to products and services and technologies to remain competitive in the market. Moreover, it also uses artificial intelligence and advanced analytics in its affairs that results in enhancing its productivity and removing the occurrence of human errors in the operation (Needles Powers, 2013). Through such strategic management practices, Woodside has also planned to enter new markets like Ireland and New Zealand through leveraging abilities of deep water. Overall, this assists in enhancing the companys profitability (Woodside Petroleum, 2016). Framework of strategic management In relation to such theory, the objective of Woodside Petroleum is clearly associated to the formulation of various strategies. The strategic management practices of the company assist it to attain a competitive advantage over others (Davies Crawford, 2012). Moreover, the bases on which goals of an organization are anticipated to be attained are established with the help of this strategy or approach. With the help of this approach, the nature of business decisions initiated by Woodside can also be considered for assessing whether they are relevant for the attainment of organizational objectives or not (Leo, 2011). From the previously mentioned analysis and discussion, it is observable that Woodside Petroleum has effectively followed a systematic approach within its framework and that has allowed it to sustain in the oil and gas industry amidst such enormous competition from others. Besides, the companys framework is well-defined in nature as the strategic management practices adopte d by it are in line with the organizational goals and objectives (Carmichael Graham, 2012). Overall, the companys strategy depends upon key values like integrity, sustainability, discipline, working together, respect, and excellence for the attainment of major organizational goals, thereby resulting in surpassing of competitors respectively (Choi Meek, 2011). The style of leadership undertaken by Woodside Petroleum is transformational leadership wherein a leader must operate together with other employees of the company in order to generate required changes in a proper manner. Furthermore, in relation to the company, it is observable that the company indulges its employees in the decision-making procedure by accounting their opinions and views (Deegan, 2011). This assists the employees to feel a belongingness feeling with the organization. Besides, this also plays a key role in enhancing the commitment level of such employees with the organization, thereby resulting in enhancing their level of performances and productivity respectively. In addition to this, the employees of Woodside Petroleum are always informed about any kind of changes that are needed to be brought in the companys policies and processes so that it assists in the adoption of required changes in the organization in an easier way. Resource-based view This type of strategic management theory is focused on the organizations distinctive competencies, whether potential or current that enables it to offer superior value in its offerings. Superior offerings are the only choice that can help the business to flourish. If the business wants to penetrate into the market, it needs to offer unique product and service to the customers. Besides, such offerings may be across industries, markets, or multiple kinds of customers. Further, such resource view intends to reflect that the internal resources of an organization and abilities are its best sources of competitive advantage over other organizations (Svejenova et. al, 2010). Moreover, an approach to strategy with such viewpoint seeks to develop or find distinctive competencies and funds, applying them to generate superior value. It is vital for the business to attain a strong position by dint of its competency (Woodside Petroleum, 2016). Nevertheless, to the extent such competencies can be k ept unique to the organization, these can be utilized to develop a competitive advantage. From the resource-based theory, it can be observed that Woodside Petroleum has been using such theory into its framework. This is the reason why the company has been spending huge resources towards innovative technologies for framing new and efficient means that can allow it to attain a competitive advantage over other companies (Merchant, 2012). It is observed by the practice of the company that it wants to create a niche for itself in the industry and attain a major chunk of market share. This is the sole reason why it is investing heavily in the technology. Nonetheless, this is why Woodside Petroleum has been investing huge amounts in research and development expenses that can assist it in creating value for shareholders together with managing the aggregate risks in an effective manner (Woodside Petroleum, 2016). In addition to this, through the utilization of such theory, Woodside Petroleum intends to enhance its petroleum provinces by focusing on present areas of Australia, Sub- Saharan Africa, and the Atlantic margins. Hence, the resource-based view is clearly associated with the strategic management practice of Woodside Petroleum, thereby paving a path for future developments. Conclusion In relation to strategic management practices, the same is considered more abstract in nature because it plays a key role for organizations in their achievement of overall organizational goals and objectives. Besides, such practices are clearly not focused towards a single industry or market, instead, these concentrate on enhancing the competitive advantage of firms over other firms. Based on the analysis of Woodside Petroleum, it can be recommended that the overall choice of strategic management practices implemented by the company allows it to attain a competitive advantage over other firms but there are various policies that require political or legal interventions, and the same must be duly considered by the company to avoid future complications (Brigham Daves, 2012). Hence, in the absence of a strategic objective within the companys framework, it may attain competitive advantage but may not enjoy a good reputation in the market. Overall, it is crucial for Woodside Petroleum to have effective control frameworks for better outcomes. References Brigham, E. Daves, P. (2012) Intermediate Financial Management. USA: Cengage Learning. Carmichael, D.R. and Graham, L. (2012) Accountants Handbook. Financial Accounting and General Topics, John Wiley Sons. Choi, R.D. and Meek, G.K. (2011) International accounting. Pearson . Davies, T. and Crawford, I. (2012) Financial accounting. Harlow, England: Pearson. Deegan, C. M. (2011) In Financial accounting theory. North Ryde, N.S.W: McGraw-HillLaux, B. (2014) Discussion of The role of revenue recognition in performance reporting. Accounting and Business Research. [online]. 44(4), 380-382. Available from: https://doi.org/10.1080/00014788.2014.897867 Leo, K. J. (2011). Company Accounting. Boston:McGraw Hill Merchant, K. A. (2012) Making Management Accounting Research More Useful. Pacific Accounting Review. [online]. 24(3), 1-34. Available from: https://pdfs.semanticscholar.org/6ccf/f78a452763f17ed5e4f4ddc6b96703801403.pdf Needles, B.E. Powers, M. (2013) Principles of Financial Accounting. Financial Accounting Series: Cengage Learning. Parrino, R, Kidwell, D. and Bates, T. (2012) Fundamentals of corporate finance. Hoboken, NJ: Wiley Peirson, G, Brown, R., Easton, S, Howard, P. and Pinder, S. (2015) Business Finance, 12th ed. North Ryde: McGraw-Hill Australia. Petersen, C. and Plenborg, T. (2012)Financial statement analysis. Harlow, England: Financial Times/Prentice Hall. Svejenova, S., Planellas, M and Vives, L. (2010). An individual business model in the making: Achefs quest for creative freedom. Long range planning [online]. 43, 408-430. Available from: https://doi.org/10.1002/job.461 [18 April 2018] Woodside Petroleum 2016, Woodside Petroleum Annual report accounts 2016 [online]. Available from: https://www.woodside.com.au/Investors-Media/announcements/Documents/01.03.2017%20Annual%20Report%202016.pdf [Accessed 18 April 2018]