What is the value of looking at the past?
Perhaps it is to recall fond memories you’ve had or help you
understand historical events. Maybe your return to the past
enables you to better understand and predict the future. When an
organization looks at the past, it typically does so to analyze its
results, so that the best decisions can be made for the company’s
future. This activity requires gathering information about costs and
how they behave so that managers can predict what they will be
“down the road.” Gaining a deeper understanding of cost
behavior can also spur a firm to reorganize its operations in
innovative ways and tackle important challenges, as the following
article shows.