Managing and controlling specialized assets

Article Abstract:

Asset specificity has not been for the most part a major consideration for management accountants. According to the theory of transaction cost economics, asset specificity is one of the most important elements of economic transactions. The tendency to ignore the specificity of assets should be corrected because transaction-specific assets are not flexible enough once they are acquired and thus are subject to unexpected situations that can transform them into non-producing sunk costs. Given the emerging role of these assets in creating a market strategy and ensuring synergistic dynamics among internal and external processes, management accountants should become more aware of the how to invest in and manage these assets. The different forms of asset specificity include site specificity, physical asset specificity, human asset specificity, and dedicated assets.

Management, Accounting and auditing, Capital assets, Assets (Accounting)

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Starting and managing a small business

Article Abstract:

People deciding whether or not to establish a small business should first take a personal inventory, deciding whether they have the necessary capital, business skills, and personal time to invest in a risky endeavor. Rational reasons for wanting to own a small business include: fulfillment; competitive desire; or the desire to implement an idea. The critical factors in establishing a business are: picking the right employees; formulating a business plan with clearly delineated goals; concentrating on the basics of the business; and studying the competition. Owners of new businesses must: establish benchmarks by which to measure performance; maintain a competitive edge; and implement accurate financial reporting systems.

Small business

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