Resources have a special characteristic: They fill and drain over time, like water in a bathtub. This chapter explains this behavior, shows why it is so important, and also does the following:
- explains how to work out what the numbers do when resources fill and drain
- shows where management control lies
- outlines how managers can develop resources through time
- 3.1: Bathtubs Rule! Resources Fill and Drain
- Since a firm’s performance at any time directly reflects the resources available, it is essential that we understand how these resources develop over time and how we can control the process.