Organizations now have the technological capabilities to easily expand data collection activities to satisfy both external and internal information requirements. Accounting information is often a primary basis for making strategic decisions and for measuring and evaluating managerial efficiency and effectiveness. To provide the correct management incentives, accounting measurements should be tied to the established mission. Stated another way, in making long-term commitments of resources, managers must consider how those commitments affect short-term management of resources. Information is the key to successfully analyzing and resolving all of these decision situations—and much of that information is provided by an organization’s accounting system.
In large organizations, an individual segment (or division) may pursue one of three generic organizational missions: build, hold, or harvest. Segments with a build mission require the most strategic planning because they are to be operated for the long run. Segments with a harvest mission require little strategic planning; their role is to generate cash, and at some point, they will probably be sold or spun off as other company segments begin to mature. Segment mission is directly related to the product life cycle or the sequential stages that a product passes through from idea conception until discontinuation of the product. The five stages of the product life cycle are design and development, introduction, growth, maturity, and decline. The build mission is appropriate for products that are in the early stages of the product life cycle, and the harvest mission is appropriate for products in the final stages of the life cycle.