Financial Management.
Decision making at Amazon.
Amazon being a multi-billion company, its decisions have always been set to focus on the future. They are set to reflect on future impacts on the company. Many factors are considered by the company before any step to decide is taken. Among them are the current states regarding their market leadership, customer needs, and frequency of purchase and the returns on the invested capital. Investment decisions are made on a long-term basis as opposed to short-term profitability. On the other hand, minor decisions that depend on data are left to the junior staff.
Remarks regarding management accounting.
Managerial accounting is termed as the backbone to the success of any business. The aspects of focus in this perspective include cost measurement, which is the most significant focus of amazon, regarding its close watch to profit-making. Under cost measurements, are the aspects of decision support and planning, evaluating and analyzing performance, and cost accounting. These three branches act as the ladder from a lower range profit realization to the high-level profit realizations. Management decisions are what is needed to improve system performance. Most businesses and companies have built on this by translating data into knowledge, which is then used in decision-making.
About Sunk cost.
Sunk cost represents the cost incurred by a certain business entity and can no longer be recovered. This is common in any company. On the other hand, it is not considered during decision making process because they are funds that will never be recovered. For the case of amazon, it is ensured that loopholes are sealed as much as possible to avoid such a scenario.