Managing Performance / Setting Goals

What if Management & Accounting Procreated?

zack saeger asked:

Zack Saeger

Dr. A.J. Cataldo II, Ph.D., CPA, CMA

ACC 303

July 22, 2008


What if Management & Accounting Procreated?

            While in pursuit of a bachelor’s degree in business, one is faced with the obstacle of learning and comprehending many disciplines in the business world. Course work in Accounting, Economics, Finance, Statistics, Marketing, and Management are required before entering into your discipline of choice. The following will attempt to prove that this is advantageous since many topics can be interwoven to help better understand one another.

            In Accounting, the concepts of fixed cost, expenses that do not change in with the amount of activity of a business, variable costs, expenses that change in with the amount of activity of a business, and total revenue, the total number of dollars collected by a firm from sale of a product, are heavily analyzed and must be understood. These are often graphed with dollars on the vertical axis and number of units on the horizontal axis. In addition to fixed and variable cost and total revenue, the concepts of releveant range, capacity at which one can produce, and  breakeven, the point in which costs equals revenue are graphed as well.             

             This same graphical representation can be used to decribe the stages of teamwork, a common management concept. These stages, first presented by Bruce Tuckman in 1965, are forming, storming, norming, and performing. The first two, forming: the stage in which the team meets and learns about the opportunity and challenges, and then agrees on goals and begins to tackle the tasks, and storming: the stage in which the team addresses issues like what problem(s) the group is going to solve and begin to present different ideas to solve the problem(s) which then compete for consideration, are easily paralelled with the idea of a fixed cost. Like a fixed cost, these stages must happen. If the group suceeds or not, the group is sure to meet, learn their objectives, and present ideas to complete their team goals.

            Variable costs therefor become the norming stage. The norming stage is the stage in which the team members alter and/or adjust behaviors as they develop work habits that make teamwork more natural and effective and efficient. “Team members often work through this stage by agreeing on rules, values, professional behavior, shared methods, working tools and even taboos”[1]. These are variable because not all teams experience this stage. Poorly matched teams may never be able to produce quality storming and never agree upon a method to complete their task. So like a factory that is not producing product experiences no variable costs, a team may not leave the storming phase and therfore does not have the norming phase.

            Finally, total revenue paralells to the performing stage. Performing is the stage at which teams are able to function as a unit as they find ways to get the job done smoothly and without inappropriate conflict. Performing is really a measure of productivity of the group. It is during this stage that a team begins meeting and exceeding their goals. Like total revenue, it increases steadly from zero with a positive correlation.

            These management terms can also be expressed graphically. This time, the vertical axis represents productivity while the horizontal axis represents time. Additionally, the concepts of relevent range and breakeven are comparable to the time allowed to complete the task and the point at which goal begin to be acheived. The breakeven point in accounting is very similar to that of teamwork. It is at that point that the team begins to suceed. While the stages of forming, storming, and norming are needed to get to performing, at these stages the team is not meeting its goals. This is just like for a company, before breakeven is met, revenue is being created but the company is opperating at a loss in profit.

            Success! The foundations of business can be interwoven together as similar concepts to help one better understand a topic. As shown, with a little analysis, costs and revenue were easily paralelled to teamwork. Two concepts that naturally have no coorelation but do relate conceptually if one so needed to do so.





Tuckman, Bruce. (1965). Developmental sequence in small groups. Psychological bulletin, 63,            384-399

“Forming-Storming-Norming-Performing.” 29 May 2008. 23 July 2008             .

[1] “Forming-Storming-Norming-Performing.” 29 May 2008. 23 July 2008          

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