Abstract
Two common denominators are used in manufacturing businesses as the basis for control and performance measurement. The first is the time base on which manufacturing principally works. Product mix and volumes, capacity, efficiency, utilization and productivity are all normally measured by time. The second common denominator is that of money. At the corporate level, forecast activity levels, performance measures, levels of investment and similar activities use the money base. The importance of getting the correct links between the time-based and money-based measures is self-evident — correct not only in terms of being accurate, but also in reflecting the key perspectives associated with the business itself.
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Notes
H. T. Johnson and R. S. Kaplan, Relevance Lost: The Rise and Fall of Management Accounting, Boston: Harvard Business School Press, 1987, includes important insights into accounting systems, for example, Chapter 8, ‘The 1980s: The Obsolescence of Management Account Systems’.
K. Simmonds, ‘Strategic Management Accounting’, in R. Crowe (ed.), Handbook of Management Accounting, 2nd edn, Aldershot: Gower, 1988, pp. 25–48.
S. Parkinson, T. J. Hill and G. Walker, ‘Diagnosing Customer and Competitor Influences on Manufacturing Strategy’, in F. Bradley (ed.), Marketing Thought around the World, Proceedings of the 20th Annual Conference of the European Marketing Academy, Dublin, May 1991, pp. 741–55.
R. Davies, C. Downes and R. Sweeting, UK Survey of Cost Management Techniques and Practices, 1990/91, Price Waterhouse, London, 1991, p. 11.
T. J. Hill and D. J. Woodcock, ‘Dimensions of Control’, Production Management and Control, 1982, 10(2): 16–20.
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© 2000 Terry Hill
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Hill, T. (2000). Accounting, Finance and Manufacturing Strategy. In: Manufacturing Strategy. Palgrave, London. https://doi.org/10.1007/978-1-349-14018-3_11
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DOI: https://doi.org/10.1007/978-1-349-14018-3_11
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