Have you forgotten Dell and Gateway?
I chose my words carefully. I realised that you are enamoured of the DELL model - as you have a right to be, but that is not the model I described. I think the problem that DELL afficiandos have is their almost missionary belief that all other companies should adopt its model. They think the tail should wag the dog.
So that investors who have put their money at risk can understand the financial situation and performance of the business. That is the function of accounting.
That is your value laden definition of the function of accounting. Accounting is just one of the tools, and a clumsy one at that, for reporting the performance of an investment. Stripping your definition of its covert insinuations about COMPAQ, it is not objectionable, in itself. But you have made an illogical leap. There is nothing in the accounting principles used by COMPAQ and most of the other companies that rely on distributors which prevents investors knowing the peformance of their investment. There is no moral law which says science has to be simple.
Compaq's PC problems stem from the fact...
No they don't.
Yours is yet another assertion of the supremacy of the DELL model and its universal applicability to all other companies. It is an assertion of belief.
COMPAQ sells more PC's than DELL and a greater variety of other products and services. COMPAQ leads DELL in every category. I don't think COMPAQ's "problems", which are problems of profit and not of units or revenues, have anything to do with its accounting principles. And following you away from the basis of your original remarks, I don't think it has very much to do with inventory management. That is a bread and butter management issue and one which can be fine-tuned in a number of ways, including greater reliance on direct sales in the overall mix. |
