Accounting

Know what your project is worth in today's dollars.

Do you know what your most profitable product is?

You've been ordered to reduce overhead by 10%, 20%, or even (wince) 30%. How do you do it? First, don't expect to reach your target with a single big...

Companies are increasingly paying for acquisitions with stock rather than cash. But both they and the companies they acquire need to understand just how big a difference that decision can make to the value shareholders will get from a deal.

Few, if any, articles on finance that have appeared in HBR have enjoyed the influence of the 1962 article reprinted here as a “Classic.” Gordon Donaldson’s analysis of how many companies haphazardly established their debt capacity, and his careful explanation of what he considered a better way, seemed to strike a chord among corporate administrative […]

Scott Anthony, president of Innosight and author of The Silver Lining, explains how to innovate when time and money are tight.

Less than a decade after the frantic merger activity of the late 1960s, we are again in the midst of a major wave of corporate acquisitions. In contrast to the 1960s, when acquirers were mainly freewheeling conglomerates, the merger movement in the 1970s includes such long-established giants of U.S. industry as General Electric, Gulf Oil, […]

What today's businesses can learn about pricing strategies and consumer trust.

The subject of transfer pricing doesn’t normally excite many people, but when your transfer pricing system is less than perfect, life gets interesting. We at Bellcore first got interested in transfer pricing in 1983. That’s the year before AT&T was broken up and Bellcore was being formed as the centralized organization supporting the seven regional […]

Budgeting, as most corporations practice it, should be abolished. Most other building blocks are in place, but companies continue to restrict themselves...

An abrupt and lasting drop in revenue growth is a crisis that can strike even the most exemplary organization. The authors' comprehensive analysis of...

In search of a more sophisticated measure of risk.

Too many CEOs are penny-wise and pound-foolish.

This article presents the research findings of a leading U.S. corporation, AT&T, on a series of important economic questions and issues, with an interpretation of the material by one of the company’s top executives. The subject is corporate earnings patterns in different industries, investment trends, the relation of profits and investment to GNP, and other […]

A strategy for becoming an effective philanthropist.

But the effects wear off quickly.

Employees are constantly in motion—making sales calls or taking service trips; visiting an international office for a few days or relocating there for a few years; soaring across oceans in the corporate jet or heading across town in the company car. Typically, these activities are administered by an assortment of departments and vendors. But we […]

In recent years, companies have reduced their dependency on traditional accounting systems by developing, activity-based cost management systems. Initially, managers viewed the ABC approach as a more accurate way of calculating product costs. But ABC has emerged as a tremendously useful guide to management action that can translate directly into higher profits. Moreover, the ABC […]

Many companies now recognize that their cost systems are inadequate for today’s powerful competition. Systems designed mainly to value inventory for financial and tax statements are not giving managers the accurate and timely information they need to promote operating efficiencies and measure product costs. In response, they have tried to redesign their present systems, but […]

For many companies, value-based management has brought only mediocre results. But for a select few, it’s led to sustained increases in profits and stock prices. Here’s an in-the-trenches look at what sets the winners apart.