Finance is a Liar Sometimes

There are numerous ways to measure success for a specific company. Whether it is pure revenue based, maximizing capacity, or providing the best quality, each company has its own specific way of measuring its success. The article from industry week discussed the dangers a company has when they use financial-based planning. One example the article gave when discussing a poor financial measurement was inventory. In the world of accounting inventory is considered a current asset. A current asset relies on liquidity and more specifically so being able to convert into cash within a year. The problem with that definition is that it relies on the fact the inventory will eventually be sold. The article stated that, “High inventories therefore mean longer cycle times, longer lead times and less responsiveness to customer needs.” That quote essentially means that the more inventories a company has the ability to change becomes weaker. 

Cheap offshore labor as a method as cost savings was also mentioned as being expensive. In the books, cheap labor looks attractive as costs are being minimized and more products are being able to be made. However, with off shoring come defective goods. In my own experience, anytime I order something through Amazon which I know is coming from China I am taking a risk. 50% of the time my order will be completely defective. If not defective, the quality will be sub-par. That level of quality cannot be measured by a financial metric and as a result is not taken into account with valuating success on a revenue based level.

 henry ford image

The measures to which a company should measure their success as the article states (and I agree as well) are the three KPIs: Time, Material, and Energy. Henry Ford was a strong component of these measurements as he believed, “time, material, and energy are worth more than money because they cannot be purchased by money.” Taking into account that belief, there then becomes four major points consulted when making decisions and improvements.
1. Waste of the time of people
2. Waste of the time of things
3. Waste of materials
4. Waste of energy
All four of those points touch on the certifications we have been talking about in class. While the six sigma is not discussed in the article, concepts of lean manufacturing are present throughout. In addition, ISO 14001 certification is mentioned. An example is given that it is not only wasting raw materials it is also wasting the scrap materials. Ford specifically showed this method that even though back in his time he could have thrown scraps in the river he instead decided to use it to make something else. This allowed him to maximize raw and scrap materials which led to cost savings. In accounting, and financial reporting that is never take into account. Through this article I really understood that while financials are important that should not be the only measurement used to determine a company’s success.


1.) What do you think is the best way for a company to measure success?

2.) Are resources such as time, energy, and materials equally important? Or does one stand out from the rest?

3.) What are some of your own personal experiences when  ordering goods from overseas?

The Key To Success: Planet, People, Profit

There are questions that people ask about the route a company should take in order to be successful. The main question is, what does it mean to be successful? Is it always about the money? Configuring a company’s operations of benefiting the community may bring out the answer.


Corporate Social Responsibility has become a huge impact on the image companies portray. One way to look at this would be future investments. I’m not only talking about assets we may gain, but also maintaining a healthy environment we all wish to live in. There are so many products and services that emit toxic chemicals that damage the planet we live in. Now if you don’t support or care about the health of our planet, I’m sure you care about the reputation of the company you work for. In today’s society, consumers prefer to purchase green products and services over others. From my own experience, when I saw two identical products where one promoted “going green”, you can bet I chose the product that supports the health of our environment. Choosing the “going green” route will label your company in the ecofriendly category that will support its marketing campaign.

Addition to helping our planet, Corporate Social Responsibility improves businesses’ public relations. As mentioned, consumers prefer products that do not harm our environment. Representing an ecofriendly company can also have an opportunity to connect with potential suppliers. Going green includes conserving energy and using recycled products. These acts will reduce costs of businesses and attract suppliers. Think yourself as a supplier. Would you rather partner with a business with low costs and responsible actions, or one that does not have these attributes? I don’t think I need a response.

Let’s get into the most desirable component that derives from Corporate Social Responsibility. Profit. To put it out there, thousands of businesses are profitable who aren’t socially responsible. They may even be more profitable than businesses that are socially responsible. However, looking at a long-term perspective, businesses that are socially responsible are more likely to stay profitable. There are numerous options of cost savings such as recycling and reducing energy consumption. Maintaining an appropriate level of social responsibility will look more appealing to the community, allowing businesses to expand.

Benefiting both the consumer and the supplier will result in a successful company and a happier community. I personally took a class on Corporate Social Responsibility where I learned how much of an impact this trait could do for a business. The best method for a business to succeed and maximize their revenue is to benefit the community and establish a reputation. Taking these steps will open new opportunities and accomplish the desired goals. With this in mind, LET’S GO GREEN!


Do you believe that Corporate Social Responsibility can determine how well a business will operate?

Other than “going green” what other ways do you believe Corporate Social Responsibility can be portrayed?

What do you think is the most important aspect of Corporate Social Responsibility? Is it the reputation of a business or actually improving our environment?