This Focused Performance Weblog started life as a "business management blog" containing links and commentary related primarily to organizational effectiveness with a "Theory of Constraints" perspective, but is in the process of evolving towards primary content on interactive and mobile marketing. Think of it as about Focusing marketing messages for enhanced Performance. If you are on an archive page, current postings are found here.
"What do the financial controls folks have to say about either the lack of understanding between fixed and variable costs or the lack of a "unit cost" assessment of a firm's performance. I get the sense that the words being used here are the same as those found in the GAAP based processes found in publically audited firms."
That is exactly the case. Generally, knowledgeable financial folks appreciate the difference between financial accounting and management accounting. They know that GAAP numbers are for reporting of performance in a consistent manner, where the key numbers of interest are those at the very top and bottom lines. Making day-to-day decisions for the business require a different lens. Even before I was ever exposed to TOC and its T, I, and OE approach to quantitative analysis, the same basic approach was enforced by the Comptroller/CFO of the division of the Fortune 50 consumer goods company I worked for in the 80s. His words, which I remember well (since they are echoed in the video version of The Goal, which I've seen umpteen times) were, "Don't use my cost numbers for decision-making!"
[From the comments again...]
Finally, are there any recommended texts that discuss the "no unit costs" concept?
I mentioned two in my contribution to the aforementioned comment thread... Throughput Accounting, by Corbett, and The Measurement Nightmare, by Smith. In addition, I'm reminded of another book Theory of Constraints and Its Implications for Management Accounting, by Smith, Noreen, and Mackey, as well as one of Goldratt's non-novelized works, The Haystack Syndrome. I would expect any traditional accounting text that discusses the concept of direct costing (as opposed to absorption costing at the heart of GAAP reporting processes), which is really what this is, might also be helpful in understanding the approach. Other related references include:
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