Accounting

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 […]

Current accounting rules don't always communicate real value to investors.

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, […]

A new initiative, the International Sustainability Standards Board, holds promise.

In recent years, the leaders of American companies have been barraged with attacks on their investment policies. Critics accuse American executives of shortsightedness and point out that managers in Japan and Europe often fix their vision on more distant horizons. Here, it is claimed, managers pay too much attention to quarterly earnings reports and not […]

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 […]

Creating high-quality products that are affordable, simple, and sustainable.

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 […]

It's happening again, and I guarantee it's going to end as badly as ever. No, I'm not talking about the upcoming season of American Idol. I'm talking...

How the three Fs-facts, faith, and fortitude-can create a persuasive business case as well as a roadmap for new initiatives.

Three strategies for boards.

Valuation used to be the province of finance specialists. That’s no longer true.

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 […]

Four years ago, Diane Ashton and Sundeep Lal were working together at MIT on a titanium extraction project. Durable and highly heat resistant, titanium...

Buybacks provide flexibility and push funding toward younger firms.

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 […]

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

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 […]

With the stock market down, many pension funds are in trouble, and employees and fund managers are scared. Companies should have realized—and had better learn—that they can never get ahead by putting retirement funds in stocks.

The FDIC is bust. The group began 2009 with $30 billion in its insurance fund, but after covering losses at almost 100 insolvent banks so far this year,...