1 - Introduction
Published online by Cambridge University Press: 05 January 2015
Summary
Management, accounting, economics, and the business press
Managers make business decisions; they do so at the company level and, in different guises, at the industry or sector level, and the national economy level. Koopmans (1951) referred to these decision makers as “helmsmen,” for the way they steer their businesses. Management decisions determine the economic performance of the business, and have financial implications for its owners, its lenders, its customers, and its resource suppliers.
Accountants construct accounts from the outcomes of management decisions; they do so at the same three levels. These accounts describe financial performance and can be compared through time and across production units at each level. Although accounts record the financial consequences of management decisions, they also inform management decision making. Kline and Hessler (1952), Chandler (1962), Johnson (1972, 1975, 1978), and the historical papers collected in Temin (1991) describe in great detail the procedures by which accounts were used to guide management decision making at major businesses a century or more ago. Accounts thus guide management decisions and record their consequences. They contain an enormous amount of useful financial information, but they generally contain no entry labelled “productivity.”
Economists have analytical skills and interests that are complementary to those of managers and accountants. Although accounts contain no direct productivity information, economists are able to extract productivity information from them.
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- Productivity AccountingThe Economics of Business Performance, pp. 1 - 62Publisher: Cambridge University PressPrint publication year: 2015