Modern Industrial Management

Preface 9

Preface to the second edition 11

About the authors 13

 1 Introduction 17

1.1 Industrial Management as an academic field 17

1.2 Industrial Management – yesterday, today, tomorrow … 20

1.3 The economic cycle of the company 25

1.4 The structure of the book 29

References 30

 2 Swedish trade and industry 31

2.1 Swedish industry is dependent on technology and exports  31

2.2 The economic structure of Sweden  33

2.3 The companies in Sweden 35

2.4 The structure of the business sector 37

2.5 An industrial structure in transformation 47

Summary 49

References 49

 3 business operations as point of departure 51

3.1 The value proposition: goods and services 51

3.2 The value creation 58

3.3 Value capture  68

3.4 The business operations in the value chain 70

3.5 Efficiency, effectiveness, productivity, and profitability  76

Summary 77

References 78

 4 Technology-driven development 81

4.1 Sources of innovation and technological development 81

4.2 The S-curves of technological development 83

4.3 How innovations diffuse  85

4.4 From product innovation to process innovation 89

4.5 Technology shifts 92

4.6 Service innovations and new business models 95

4.7 The challenge: balancing short-term efficiency and long-term innovation  97

Summary 98

References 99

 5 Marketing 103

5.1 Marketing on different markets 103

5.2 Strategic marketing 106

5.3 Tactical marketing 111

5.4 Operational marketing and sales 117

5.5 Rules and regulations for doing business 121

Summary 124

References 125

 6 Production 127

6.1 Production under different conditions 127

6.2 Production strategy  130

6.3 Tactical production management 145

6.4 Operational production management 151

Summary 164

References 166

 7 Product development 167

7.1 Product development in different types of businesses 167

7.2 The innovation strategy of the company 169

7.3 The tactical level of product development 179

7.4 Operational level: methods and techniques 189

Summary 195

References 196

 8 Product costing and analysis 199

8.1 The basic concepts of accounting and costing 199

8.2 Contribution costing 207

8.3 Step costing 208

8.4 Full costing  210

8.5 Activity-based costing (ABC) 216

8.6 Operations determine the costing methods 219

8.7 Calculations – before and after 221

Summary 222

References 223

 9 Capital investments and investment evaluation 225

9.1 What is a capital investment? 225

9.2 How are investments evaluated? 228

9.3 Investment calculations 229

9.4 How is the required rate of return calculated? 245

9.5 Capital investment evaluation in practice 248

Summary 249

References 250

 10 Accounting 251

10.1 What is bookkeeping? 251

10.2 T-accounts and double-entry bookkeeping 256

10.3 Systematic order of the accounts 263

10.4 Bookkeeping for VAT 265

10.5 Accurate bookkeeping is not easy in practice 267

Summary 267

References 268

 11 Financial accounting 269

11.1 Financial accounting 269

11.2 The annual financial statements – balance sheet and income statement 271

11.3 Administration report, sustainabilty report, cash flow analysis, interim report, notes and the auditor’s report 280

11.4 Preparation of the financial statements 282

11.5 Taxed profit compared with accounting profit 292

11.6 What do the financial statements tell us? 293

11.7 Consolidated financial statements 300

Summary 303

References 304

 12 Corporate finance 305

12.1 Capital requirements 305

12.2 Capital structure 313

12.3 Financing the operations 316

12.4 Cash flow analysis 321

12.5 Financial risks 323

12.6 Two sides of financing 330

Summary 331

References 332

 13 Management Accounting and financial Control 333

13.1 Financial control 333

13.2 Distributing responsibilities and measuring performance 334

13.3 Management accounting  335

13.4 The balanced scorecard – a performance measurement tool 339

13.5 Budgeting 341

13.6 The effects of financial control 347

Summary 348

References 348

 14 Business strategy and strategy models 351

14.1 There needs to be a business idea 351

14.2 The strategy realizes the business idea 353

14.3 Models for strategic analysis  361

14.4 After the development of the strategy: the implementation 371

Summary  375

References 376

 15 Leadership and human resource management (HRM) 377

15.1 A company and its employees 377

15.2 The employee and the work 384

15.3 Working groups 392

15.4 Management and leadership 396

15.5 A company’s HRM and its HR department  399

Summary 400

References 401

 16 Organizing the business operations 403

16.1 The juridical form 403

16.2 The company as an organization 407

16.3 Organizing an organization 411

16.4 Organizational structure 413

16.5 Various organizational forms  415

16.6 To coordinate operations 420

Summary 426

References 427

 17 Project management 429

17.1 What is a project? 429

17.2 The goal – the very core of the project assignment 430

17.3 The project process 434

17.4 Project organization 438

17.5 Project management methods 441

17.6 Projects – short-term and flexible  448

Summary 448

References 449

 18 CSR and sustainable operations 451

18.1 A company’s social responsibility 451

18.2 The environmental issue and climate change 457

18.3 Ethical responsibility 461

18.4 Standards, systems, and guidelines 466

Summary 471

References 471

Glossary: English–Swedish 475

Glossary: Swedish–English 481

Interest tables 487

Index 491