The Department of Defense: Strengths and Weaknesses

As the oldest and perhaps one of the most prestigious government agencies and one of the largest consumers of goods in the world, the United States’ Department of Defense (DOD) operates at a global capacity that is unlike many other organizations both within and outside the United States government. Its mission is to serve and protect both the nation’s domestic and international interests. To function at its choicest state, DOD must keep a sharp eye and its finger on the pulse of shifting paradigms when doing international business and trade in services in order to optimize its investments and maintain them. In the ever-evolving world of international business and politics, DOD aims to sustain the United States’ position in global leadership; however, DOD must approach these changes precisely. In order to do so, DOD must examine itself to reinforce its strengths and overcome its weaknesses. Specifically, DOD needs to reexamine the obfuscated and intimidating process of contracting and reevaluate its approaches to using the Internet, and evolving cyberspace in general, in order to distinctively and astutely invest in particular goals and increase efficiency while bolstering its strengths in the international business environment.

Managerial Accounting in the Department of Defense 

Managerial accounting aims to provide information within an organization and set it on an operational course. Essentially, managerial accounting is the backbone of an organization as it maintains benchmarks and the organization’s capabilities and compares its results to actual outcomes along with hypotheticals. For DOD, this is an incredibly essential field. Overall, DOD needs to continue to measure specific values in order to keep specific processes running smoothly, frequently, and consistently. Through these specific processes and measurements, DOD will reexamine certain business processes within itself, the larger organization. 

In other words, all of the components in managerial accounting are visible in DOD’s practices as they are, ultimately, a business in and of themselves. Recognized in 1949, DOD employs approximately 900,000 civilian employees, 1 million armed forces members on active duty, and 1 million members in the reserve components. According to the United States Department of Defense’s website (2013), DOD “provide[s] the military forces needed to deter war and to protect the security of our country… [and] official, timely and accurate information about defense policies, organizations, functions, and operations.” ("About the Department of Defense (DOD)"). Consequently, it seems along with financial security, DOD is responsible for national security. 

DOD consists of various groups such as the Secretary of Defense, the Chairman of the Joint Chiefs of Staff, Military departments such as the Army, Navy, Marine Corps, and Air Force, Office of the Secretary of Defense, and the Unified Combatant Commands. Essentially, the DOD role’s is to protect our country and oversee our military security. Judging by the daily news, the DOD is responsible for many expensive ventures. As of such, their accounting practices are often questioned and their spending is fittingly capacious. Because of their esteemed and critical position in the world, information and cost-effective business practice are invaluable. 

Along with the fixed costs of certain facilities, machines, and enterprises in which DOD invests, they have to pay out the variable costs of wages for employees and contract workers. In addition to maintaining aforementioned facilities, machines, and enterprises, and various utilities, DOD must account for these in respect to the appraisals of their investments and eventually establish the risk of an investment and its long-term viability. Considering that DOD is a vast organization with a multitude of branches that make an attempt to ensure expediency, establishing these risks and values are necessary to guilelessly operate these immense industries.

As a review, when producing goods or service, organizations encounter fixed and variable costs. A fixed cost does not change with the amount of production. As an example, for DOD, a fixed cost would be installations. Installations are unnecessary facilities. Usually, taxpayers contribute to DOD’s fixed costs (Pentagon Official Provides Budget Update, 2013, no page).On the other hand, variable costs include service contracts. Based on location or organization, service contract fees will always vary. The DOD’s reliance on contractors makes up the majority of its variable costs. Because the level of production is constantly changing, the cost of labor changes too. 

A cash budget is a calculation between budgeted cash inflows and outflows. In a way, we regard a positive cash inflow as what we have to spend. In this case, we regard DOD’s cash inflow as the sources of its funds.  According to the “Defense-wide Fiscal Year (FY) 2013 Budget Estimates,” the mission of the Defense Finance and Accounting Service (DFAS) was created to lead DOD in their accounting and finance practices. 

(Figure 1 omitted for preview. Available via download)

Figure 1 “displays the actual Defense-Wide Working Capital Fund (DWWCF) cash balance at the end of FY 2011 and projected balances for year-end through FY 2013” (Pentagon Official Provides Budget Update, 2013, no pg). While it is only a projection, DWWCF predicts by the end of 2013, the cash balance is expected to be $1,223.5 million. As one can imagine, United States citizens wonder where the money will go, so the DOD business affairs are of great interest. After all, our national security depends on DOD’s ability to control the various facilities, employees, and inventory. In actuality, their resources are spread out over the world. Therefore, it is crucial to keep precise accounting records. 

In addition, DOD’s capital budgeting requires careful decisions, and it allows DOD to remain competitive in the international business environment. Specifically, DOD has to consider long term investments. In this case, contractors can be considered part of the Capital Budget. Because the contractors work independently, their projects are unrelated. In figure 2, the Defense Information Systems Agency (DISA) proposed that the fiscal year 2013 should see a 1.7% standard inflation because they merged “the accumulated net position of the two business lines for rate-setting purposes” (Pentagon Official Provides Budget Update, 2013, no pg). 

(Figure 2 omitted for preview. Available via download)

By extension, figure 2 allows us to see how expensive war can be. The amount of funding for the war was frequently argued between government and citizens alike. Based on their interests, United States citizens realize that DOD has a lot of money and assets at their disposal. While managerial accountants afford businesses with information for decision making and planning, all purchases and payouts depend on the DOD. For the most part, we hope they make wise decisions, but as long as we consider their data, we can make valid arguments regarding their spending. Nevertheless, managerial accountants evaluate an establishment’s competitive position, and DOD’s main priority is to keep the United States as the predominant strength in global affairs. Essentially, managerial accounting encompasses more than finances because it offers businesses information and strategic ideas. However, along with the hefty sum of employees and contractors, DOD’s budget utilizes” $526.6 billion in discretionary funding for the base budget…[as] sufficient resources to carry out our national defense strategy” (United States Department of Defense, 2013, n.p.). Overall, DOD runs the United States as a business, and like most businesses, we have our weaknesses. 

Discussion

While DOD has its weaknesses, they are generally a result of wastefulness. In fact, most weaknesses DOD has in terms of the business stem from wastefulness. While most may argue that war is a waste, at the time, it was necessary. Regardless, even at a first glance, DOD is not an entirely cost-effective organization because it utilizes both civilian employees and contract workers to produce their inventory. According to Project on Government Oversight (POGO) (2012), the most damning piece of evidence for this is that “although the number of employees in both workforces is relatively balanced, spending on the workforces is not” (Enclosure no pg.). The necessary work for certain activities is not gauged effectively, and, as such, employees from both workforces are not utilized to their full potential. For example, DOD directs contract workers towards smaller-scale business systems. In contrast, civilian employees can appropriately handle smaller scales, so perhaps they are better suited. Subsequently, this creates a definite discrepancy in variable costs like wages, and particularly evident in “that contractor employees cost 2.94 times more than an average DOD civilian employee performing the same job” (Enclosure no pg.). Consequently, in regards to some of the military stock, DOD can cut back on costs if they use their local resources. The total amount they spend on contracting is no small sum. In a word, the misappropriation of funds results in a contracted workforce that is entirely bloated. We equate bloated to full, so, in this sense, the overabundance of employees may mean some are working more than others. Worst case scenario, some may not be doing much at all. 

While DOD can use some local resources, their overuse of contractors can only hurt business prospects internationally. Simply put, if funds are inappropriately used, it leaves less for other innovations. In all probability, there are worthwhile ventures that would be available to a more efficient DOD through thoughtful budgeting and cooperating with its allies. In many ways, small local businesses are DOD allies because they provide a means of economic recovery, in our own country, due to the increase in employment. On the other hand, small businesses outside of the country will have a positive impact on our economy if we can supply them with American products and materials. This requires a healthy relationship with DOD’s allies and efficient business practices that are cost-effective for both parties involved. Overall, through appropriate contracting, the financial burden for DOD is lessened.

While DOD encourages small business owners to become contractors, it is difficult to believe that the federal government makes an honest attempt towards alleviating the complications for small businesses to contract with them. For the most part, the federal government has an, albeit proper, bureaucratic and labyrinthine process towards contracting. However, defense contracting is different from commercial customers, and it is something that the federal government attempts to make explicitly clear for potential contractors. In addition, DOD, as an extension of the federal government, is very protective of its interests. Contracting can be a very expensive process, and particularly “challenging for a small business to navigate” (Beesley, 2009, no pg). The possibility to gain financially is the draw, so small businesses have specific procedures they need to follow. Regardless, Caron Beesley (2009), author of “Doing Business with the Department of Defense (DoD); A Small Business Checklist” suggests it is worthwhile for small business to consider government contracting specifically if the business has sustainability in their product’s value. For other private companies, this process and the end goals can be troublingly “obscure” (7). For DOD, civilian contractors may fall under the jurisdiction of the governments of other territories. That situation can be problematic considering that these contractors are mostly independently operated, and, as such, follow their own given rules within the frame of their contract. 

When the United States does not have the local skills to manufacture or produce goods, we resort to outsourcing. With that in mind, it is no secret that “outsourcing is fast becoming a fixture in the organizational models of the 21st century” (Jackson, Lloranta, & McKenzie, 200, no pg). In other words, our technology allows us to conduct business with foreign places quickly and easily.  While outsourcing is potentially a boon to DOD in international business affairs, there is the questionable process of making it work. Certainly, there are “strategic and economic benefits that are too compelling to ignore” (Jackson, Lloranta, & McKenzie, 2001, no pg) in outsourcing. For example, it is a strategic maneuver to supply our country with the most knowledgeable sources. Essentially, outsourcing allows us to find the best of the best inventory. On the other hand, outsourcing opponents suggest outsourcing hurts our economy because it moves local jobs into other countries. Nevertheless, the flexibility that is allowed with wages extends to more easily purchased products. Then again, authors Jackson, Lloranta, and McKenzie (2001) suggest in their article “Profits of Perils? The Bottom Line on Outsourcing” that outsourcing may not be a definite savings because “On average, respondents estimated a 15 percent reduction in costs, but almost a third of those surveyed believed their costs have declined only slightly or have actually increased (pg. 2). While it would depend on the product, it seems that a cost increase would be correlated with its demand. Most apparently, outsourcing results in a lackadaisical approach to its effects on both the economy at large and the industry in which the outsourcing is based.

Similarly, privatization of the military is directly influenced by the distension in federal contracting. In fact, opponents of privatization offer a compelling argument when they suggest that an overabundance of contracting is harmful. Specifically, it seems that there are “questions about the effectiveness and legal status of private contractors operating in war zones” (Cooper, 2004, no pg). While the argument seems to be more of a question in ethics, it is another responsibility of DOD to balance efficiency with morality. Subsequently, DOD emphasizes that “contract workers are not bound by military law” (Cooper, 2004, no pg). This fact alone can be incredibly worrying. While this is hardly precedent with which to do away with all private contracts, it is imperative to establish some sort of organizational rules in order to maintain credibility and effectiveness economically and during particular operations. After all, “highly sophisticated nuclear testing weapons and equipment like satellite phones, global positioning systems, and laser designators … require skilled technicians” (Cooper, 2004, no pg). Again, it is a question of necessity. Sometimes, a “downsized U.S. military is ill-equipped” (Cooper, 2004, no pg) for some scenarios. In this way, DOD spends the majority of its resources on prevention. However, based on our accumulation of resources, it seems that we are actually well equipped. As an aside, we must consider potential “language and cultural barriers” (Cooper, 2004, no pg) that private contractors and international businesses undoubtedly entail. Nevertheless, when we seek the high technology goods necessary for war, outsourcing may be beneficial. Ultimately, DOD wants to keep the United States’ militaristic superiority. At the same time, while we assume outsourcing allows us to find experts, it does not necessarily guarantee expertise in, for example, a combat situation. 

With that in mind, since private contract workers are not beholden to military law, should they be subjected to more scrutiny? After all, they “make up the second-largest contingent of forces in Iraq after the U.S. military itself” (Cooper, 2004, no pg) and are used for a variety of positions; however, they cannot be held responsible for their actions by military commanders. In a way, this suggests a weakness for DOD internationally and “erode accountability” (Cooper, 2004, no pg). While their utilization offers diversity, it seems to be at the cost of financial efficiency. It is at the point where “privatization of military tasks has become a nearly $200-billion-a-year sector of the U.S. military-industrial complex” (Cooper, 2004, no pg). As such a huge industry, it seems that privatization is actually a huge weakness for DOD domestically. In addition, is it really only an economic benefit? Considering that overly relying on private contracts can become confusing for the various organizations at large, it could be that too many workers are simply too inefficient and would be served better by a smaller force of well-trained individuals.

On the other hand, at times it seems that privatization in the military does not always result in wastefulness. The usefulness and savings are evident in “outsourcing certain non-combat military services—such as translators and interrogators” (Cooper, 2004, no pg), and it is particularly important in easily communicating internationally. The fixed costs for necessities for soldiers are also prone to inflation if kept in the federal government’s domain. Therefore, privatization can result in flexibility. In other words, employers that can be dedicated to a specific purpose for an amount of time, and it will be entirely at the discretion of the contractor. Nonetheless, whether or not this is more economically viable is typically on a case-by-case basis. 

Fixed costs remain the same within their relevant periods; however, variable costs change with an organization’s activities. Therefore, in reducing the cost of business, DOD’s decreased workforce will condense variable costs. The diminished workforce may result in wages being divided amongst employees, which are actually greater to people, and reduce its business systems because this, in turn, condenses cost and increases efficiency. This is the solution if it was grossly oversimplified, but it sets the immediate framework for a resolution. If DOD could streamline their current systems and terminate some or even combine them, they would make the appropriate first step. This can relieve many of the issues of redundancy or bloated areas of employment where workers are inaccurately assigned, or where their skills are not as effectively utilized cost-wise.

In doing so, it allows DOD to assess its capital budget conveniently and establish whether these new systems or removal of old ones are worth pursuing. If there were ever a weakness to DOD, or potentially any government program, it is wasteful allocation of funds evident in the obfuscation of DOD business systems such as misallocating contracted employees to very basic systems. As such, reassigning particular employees DOD-wide to more suitable, or efficient, areas is a preferable option to a staff that is not necessarily deeply involved with DOD’s day-to-day functions. Correspondingly, this raises the question of the utility revising the structure of these particular employees DOD-wide, for both DOD employees and contract workers. It is clear that to reduce overstuffed programs and ensure profitability, DOD must establish a clear set of rules and hierarchies for contracted employees to further incorporate them within DOD. Ultimately, contract workers are a huge component of DOD and nearly every modern military industry. DFAS would be unwise to make risky budget cuts in this arena. Unfortunately, the United States seems to lack technological aptitude, or we do not want to develop it. Regardless, technically advanced workers will traditionally create the best products. 

However, we still risk potential problems with private and international contract workers. Again, as they are mostly held responsible for their own rules, they have a set role to perform for DOD as per the nature of contract work. However, these contracted employees might not fully understand the inner mechanisms of DOD’s organizational structure and ultimately just create redundant business systems and decrease efficiency while still having a variable cost that certainly adds up in worst-case scenarios. Because these contracted workers have no real affiliation with DOD beyond their contract, they are arguably less relevant, as individuals, to DOD as a whole because of their ephemeral nature. 

Incidentally, since private contractors have no real relationship with DOD beyond their contract, along with not necessarily being held accountable for their actions, they are not afforded the same respect. For example, on April 28, 2004, the United States saw the deaths of four U.S. security guards who were “burned and mutilated…and hung” (Cooper, 2004, no pg) because they had no formal affiliation with DOD or the Pentagon. In other words, they “were not included in the Pentagon’s list of American casualties in Iraq” (Cooper, 2004, no pg). These consequences are not the only omissions that tend to not make widespread news. Contracted workers are culpable for a questionable amount of disturbing scandals, and while soldiers and the like may be indicted, a contracted civilian will not face any consequences under military law and possibly not under civilian law either. Infamously, “at the U.S.-run Abu Ghraib prison in Baghdad, three civilian interrogators were among the six soldiers implicated in the shocking physical and sexual abuse of Iraqi detainees” (Cooper, 2004, no pg) and the three civilians were not charged under any law for any crime. This is hugely problematic, and it ushers an entirely new layer of complexity for contract workers that can only create a questionable reputation for both DOD and its contracted workers. This is the price of secrecy or negligence, which is particularly problematic when a hefty portion of your workforce is based in this privatization. To eliminate this weakness, there needs to be an established set of rules for contracted employees. It is simply too complicated to have several smaller organizations under the banner of a larger one that follows their own modus operandi. 

In addition to removing unnecessary components, DOD’s enterprise architectures would also benefit from clarity. An explicit description of an organization, and appropriately DOD would fit into this category, which extends its business practice to multiple fields and through this architecture describes the business systems and other processes in a consolidated and logical way. These consolidated systems are much wieldier than duplicates of business systems. Consolidation is efficiency, and that is something that holds true for DOD’s business both domestically and internationally. Ultimately, “U.S. economic and security interests are inextricably linked” (Sustaining U.S. Global Leadership: Priorities for 21st Century Defense, 2012) to international counterparts, and only sloppy or overly bureaucratic management and allocation can hinder these processes.  Intellectual capital is absolutely necessary to effectively rework less efficient business practices and alter them into something more viable or less bloated.

Reevaluating what a short-term need is and what its variable costs are essential. The question then becomes what DOD can do to reduce all costs yet increase efficiency. As it stands, DOD’s business systems are distended and its weakness is in its disorganization. Solving its domestic problems bulwarks potential weaknesses that stem from its current business systems. Although they are an exemplar of a public agency, DOD shares many similarities with private sector businesses. Private sectors stay on the pulse of organic cultural paradigm shifts and supplement the shifts while combining with the more useful commonalities of private sector business such as Enterprise Resource Planning (ERP) systems. Incidentally, it suits private purposes more accurately since they are uniquely tailored towards them. Instead of altering and specifying specific enterprises endlessly until the ERP changes, which are hugely wasteful cycles, they can mesh these ERP systems with more accuracy and practicality as a more prudent approach to acknowledge which business processes bear similarities to their counterparts in private sector businesses, and they should maintain them similarly. 

While DOD’s business systems are occasionally unique, modernizing their approach by conforming more to certain molds is indispensable to successfully maintaining these systems. In other words, DOD has to accurately optimize them and determine whether or not they satisfy appropriate benchmarks. In addition, DOD has to establish new ones once the original benchmarks have been achieved. Because of their prolificacy, cost-effectiveness is fundamental, especially when attempting to maintain sustainability. Emulating specific models for specific practices can relieve the burden on both contract workers and DOD employees. 

With the consistent fluctuations in technology, DOD is also forced to keep in step with these changes in order to remain competitive and savvy in the age of cyberspace. Subsequently, DOD’s willingness to use cyberspace effectively is one of their strengths. If DOD is to fulfill one of its many duties by protecting the U.S.’s interests, the Internet is a vital tool for both business and protection. DOD is aware of these uses, or dangers in particular cases, and as such strives “to mitigate the risks posed to the U.S. and allied cyberspace capabilities” (Department of defense strategy for operating in cyberspace, 2011, no pg). Even though the toeing the line between protection and liberty can prove to be a challenge, the opportunities inherent on the Internet are apparent. For example, the Internet allows us the “rapid communication and information sharing … a critical enabler of DOD missions” (Department of defense strategy for operating in cyberspace, 2011, no pg) Quick communication can make the difference between life and death in certain DOD operations and information sharing is absolutely essential in these same operations to ensure both security and expediency.

The Internet is an immensely useful, if not entirely fundamental, tool for modern international businesses. The ease and speed of communication allow for interactions with allies near instantaneously with similarly instant information about global affairs. In addition, the constantly evolving nature of the Internet represents a key opportunity with which DOD may invest its “technological prowess of the U.S. private sector … in people, research, and technology” (Department of defense strategy for operating in cyberspace, 2011, no pg) into the cooperation necessary for defending nations’ common interests. DOD’s online publication “Sustaining U.S. Global Leadership: Priorities for 21st Century Defense” (2012) emphasizes that “Violent extremists will continue to threaten U.S. interests, allies, partners, and homelands” (no pg) which reinstates the necessity of quick communications that is facilitated by the Internet and improves DOD’s ability “to contribute to security globally” (“Sustaining U.S. Global Leadership: Priorities for 21st Century Defense”, 2012, no pg), so agility and precision are both keys in “effectively operating in cyberspace” (“Sustaining U.S. Global Leadership: Priorities for 21st Century Defense” 2012, no pg). Cyberspace is the future of DOD because it will reduce costs and maintain flexibility, so it ensures wise allocation of given funds. This is an instrumental practice in reducing wastefulness and reining in spending for arguably unnecessary business systems. This is the purest benefit of quick and easy communication because it offers us the ability to interact with potential business partners and conveniently circumvent particular language and culture barriers with the sheer volume of communicative tools available through cyberspace interactions.

As the Internet is certainly a pivotal point of every developed country, it is a natural focal point for conducting business with many potential industries to cover. In particular, our security is a viable industry and DOD’s bread and butter. Incidentally, DISA Information Service activity group also uses technology as a cost-effective resource. For example, in an effort to reduce costs, they utilize Information Technology as their central management (Pentagon Official Provides Budget Update, 2013, no pg). After all, “The Internet was designed to be collaborative, rapidly expandable, and easily adaptable to technological innovation” (Department of defense strategy for operating in cyberspace, 2011, no pg) and its development is vital. The cooperation that is possible through this “establishment of international cyberspace norms” (Department of defense strategy for operating in cyberspace, 2011, no pg) is beneficial for all involved parties, and further solidifies the cultivation of cyberspace as an industry and a key component of establishing a new capital budget. The steps towards this will involve encouraging the business processes of DOD to reconsider their allocations. In turn, this may resolve the problem of misallocation with a more appropriate fixed cost for particular systems. Because it encourages ease of use and communication while nullifying certain risks, the flexibility of the Internet then motivates the business systems and its employees towards the ultimate goal of referring back to an example of cultural and language barriers. Furthermore, it is much easier, and convenient, to interact around others via cyberspace. At the same time, while it is convenient, DOD will have to ensure that they use clear communication. Subsequently, in an online environment, one cannot read body language or hear voice inflection. Therefore, DOD’s further venture into cyberspace will only increase their communication skills. This fluidity is the future of all business and most other practices because the Internet is a growing, and already considerable, part of human culture.

Because cyberspace protection is in the best interest of DOD and its allies, security as an industry is then economically motivated by the competition visible in cyber warfare attacks. In regards to DOD, this would presumably apply to the U.S. At the same time, the technology and innovations made for cyberspace protection would not necessarily be limited to the U.S. federal government. If DOD’s initiative were treated “cyberspace as an operational domain to organize, train, and equip so that DOD can take full advantage of cyberspace’s potential” (Department of defense strategy for operating in cyberspace, 2011, no pg), then the benefits are evident. Cyberspace’s potential is clearly demonstrated in the recent explosion on online universities and classes. In regards to our government, it will be an equal success if we utilize it in the right way. Essentially, DOD can continue to organize and utilize cyberspace as a means of creating greater efficiency for their various operations, and it remains both adaptable and able to defuse not only national crises but those of U.S. allies as well. Again, this collectivity encourages cooperation between nations. For the best business relations, full disclosure and cooperation increase efficiency. 

It is a solution that has been heavily reduced to perhaps its most simplistic form, but this unassuming form conveys an unpretentious truth that encourages efficient business, and, in this case, it encourages honesty. For example, the usage of too many contracted employees can muddle the chain of command primarily because they do not answer to the larger organization and for the most part establish their own rules. Cyberspace innovations can utilize contract workers in a way that establishes a clear hierarchy and a set of rules for all employees to guide their work by. Therefore, once DOD revitalizes the contracting process, makes the expectations, and lays the ground rules of entering into a contract with DOD, their accountability becomes credible, and for procuring outsourced work, credibility is vital.

Overall, cyberspace is the greatest strength of DOD due to its flexibility and inherent efficiency that can only be built upon. This cooperation is necessary, perhaps even inevitable, to sustain “effective cyber defenses” (Department of defense strategy for operating in cyberspace, 2011, no pg). Elucidating these goals is a natural first step towards strengthening DOD’s “formal alliances and partnerships” (Department of defense strategy for operating in cyberspace, 2011, no pg), which will reemphasize the utility of the Internet for DOD in international business. Outsourcing in this specific scenario is economically beneficial and fosters innovation for technology that benefits DOD and its allies. As an illustration, Information Technology (IT) is an extremely worthwhile investment that DOD’s capital budget can be re-appropriated towards. Especially when we consider that it is an enterprise that can only be improved upon and is essentially ensured long-term viability. While IT cannot be evaluated the same way as a physical good, the breakeven cost can, in a similar way, because of its guaranteed longevity. It is a matter of applying various talents, both domestic and those of international allies, effectively. Overseeing these contracted talents is a matter of good managerial accounting. It cannot be emphasized enough that this establishes benchmarks and achievable goals, which then become new standards for DOD to improve upon and aim at the heart of innovation.

Cooperation is one of the most important elements for smoothly operating in international business and international relations, and, as such, flexibility and clarity are essential. Managerial accounting, at its core, emphasizes ease of providing necessary information to expedite both decisive actions and precautious planning. It is a method of evaluating the needs of an organization such as DOD, and it reevaluated their necessity towards creating a cost-efficient business practice. The organization in DOD, or lack thereof, is ameliorated by the practice of good managerial accounting. It calls for strategizing and re-strategizing in order to consistently augment business efficiency. In analyzing the volume of created goods by the various contracted employees, efficiency then becomes an analysis of whether or not particular decisions are to be a short-term benefit or if it is feasible for the long term. In order for our country to remain a superpower, DOD must keep a sharp eye on the future. After all, it is the long term that managerial accounting strives to investigate and secure. Overall, for DOD’s various industries, both domestic and international, this is imperative towards reestablishing efficient processes cost-wise. Cooperation and making clear the usage of contracted workers is a step towards this goal. While DOD is one of our oldest government entities, it has made strides in keeping up with modern society. This bodes well for United States citizens because, in times of crisis, we need an organization whose main function is to protect our national and financial security. As long as DOD emphasizes our strengths while they control their weaknesses, they can only augment our overall dominance in the international business environment. 

References

Jackson, T., Iloranta, K., & McKenzie, S. (n.d.). Profit or peril? The bottom line on outsourcing [PDF]. Booz Allen Hamilton.

Panetta, L. E., & Obama, B. (2011). (United States, Department of Defense). Retrieved May 15, 2013, from http://www.defense.gov/news/defense_strategic_guidance.pdf

POGO's calculations comparing DoDs average. FY 2010 costs for GFTEs and CFTEs; Calculations of DoD's FY 2010 Expenditures for comparing contractor workforce and civilian workforce. (2012, October 17). Project On Government Oversight. Retrieved from http://www.pogo.org/

United States., Department of Defense. (2011). Department of defense strategy for operating in cyberspace (pp. 1-12). [Washington, D.C.]: Dept. of Defense.

United States, Department of Defense, The White House. (2012, February). Defense Working Capital Fund Defense-wide Fiscal Year (fy) Fy 2013 Budget Estimates Operating and Capital Budgets. Retrieved May 15, 2013, from http://www.defense.gov/

United States., Department of Defense. (n.d.). Retrieved May 15, 2013, from http://www.defense.gov/news/d20110714cyber.pdf