Production orientation is where too many rest.
Let’s look at the different focuses or orientations that firms can take toward managing and running their practices and see which ones the traditional pricing methods encourage. Any organization, whether an accounting firm or not, usually tends to have one of four focuses.
They are either selling-oriented, product-oriented, production-oriented or marketing-oriented.
MORE: When Hourly Billing Hurts Profits
Exclusively for PRO Members. Log in here or upgrade to PRO today.
Each focus will have a direct impact on how a firm looks at servicing clients and pricing its services. The predominant focus is often dictated by the value system of the founders of the organization or its current management team. Perhaps when the firm was first started, the predominant focus was appropriate. However, a danger exists when the external environment changes and the internal environment of the firm stays the same. In the ’70s and early ’80s firms did quite well by following a production orientation focus. In the late ’80s and the ’90s, this strategy did not work as well. And it certainly does not work today.
TO READ THE FULL ARTICLE
