Above and Beyond: Certain Business Issues Are Simply Too Complex to Be Decided by Sticking to Economic Principles. David Allen Ponders the Need to Take the Financial Management Profession to a Higher Level

By Allen, David | Financial Management (UK), December 2003 | Go to article overview

Above and Beyond: Certain Business Issues Are Simply Too Complex to Be Decided by Sticking to Economic Principles. David Allen Ponders the Need to Take the Financial Management Profession to a Higher Level


Allen, David, Financial Management (UK)


In terms of its place in the overall scheme of things, management accountancy is a subset of economics. For those of us on the financial management side in particular, it has been a practical manifestation of microeconomics--ie, helping to maximise the value of individual businesses by way of disciplines such as investment appraisal and cost control. For those on the accounting side, it has been about macroeconomics--ie, putting information about businesses into the public domain in order (in the words of the accounting standards literature) to help investors make economic decisions.

Both aspects have therefore been crucial strands of society's approach to solving "the economic problem": how to allocate scarce resources in the face of infinite demand. In our work, most of us will have been influenced by Adam Smith's concept of the invisible hand of the market and taken it for granted that whatever is good for the individual business is also good for society as a whole. But, in keeping with the observation that any powerful concept is pregnant with its counter-argument, the tremendous progress that has been made in the economic sphere has heightened the relevance of John Keynes's warning about the obsessive pursuit of productivity and competitiveness. "Let us not overestimate the importance of the economic problem or sacrifice to its supposed necessities other matters of greater importance and more permanent significance," he wrote.

In short, greater affluence makes it possible to act in a way that is, apparently, uneconomic. A growing proportion of the population is prepared to think beyond the economic frontier. There are many examples of this, but four are enough to make the point.

First, consider the extent to which the topic of sustainability now appears in management literature. Its advocates argue that the price mechanism does not allow for the destruction of forests, the exhaustion of fossil-fuel reserves and so on. Some consumers are prepared to suspend the normal rules of economics and pay a premium for products that are certified as having been produced in a sustainable way.

Second, think about the quality of the environment, which globalisation has pushed closer to the top of the sociopolitical agenda--one country's waste being another's water, air or land pollution. The European Union is in the vanguard with regard to the need for much more recycling, but who bears the costs?

Third, we have concern for the rights and welfare of other people. We have had pressure to end sweatshop conditions in countries supplying well-known brands and we have also seen the rise of the "fair trade" movement. Some consumers are prepared to pay a premium for, say, coffee if they are assured that the benefits will be passed all the way back to the farmer. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Above and Beyond: Certain Business Issues Are Simply Too Complex to Be Decided by Sticking to Economic Principles. David Allen Ponders the Need to Take the Financial Management Profession to a Higher Level
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.