Table of Contents....

PREFACE: What Issues Does This Book Address? 1

SUMMARY: The Contents in a Nutshell 5

THE CONCEPT

1. Market Economics Inside Organizations 9

2. Scope: Resource-governance Processes 11

PROBLEM STATEMENT

3. The Traditional Approach, and the Problems It Causes 15

THE VISION

4. Basic Principles of Internal Market Economics 49

5. How Money Flows: Revenues Distinct from Expenses 57

6. How Budget Planning Works: 75
Investment-based Budgeting

7. How Prices are Set 81

8. How Enterprise Costs Are Funded: 92
Subsidies and Ventures

IMPLICATIONS: HOW THINGS WORK DIFFERENTLY

9. Cost Control 105

10. Downsizing 111

11. Shared Services, Mergers, and Acquisitions 121

12. Expert Stewardship 127

13. Outsourcing 131

14. Unfunded Mandates 141

15. Management Metrics and Internal Controls 143

16. The Executive Bottleneck 149

17. Summary of Differences 155

THE BENEFITS

18. Financial Benefits 161

19. Relationship Benefits 178

20. Transformational Effects 191

THE MECHANICS: IMPLEMENTATION

21. Two Subsystems, and the Components Within Each 205

22. Planning Subsystem: Investment-based Budgeting 215
and Rates

23. Actuals Subsystem: Client-driven Governance 230

LEADERSHIP STRATEGIES

24. Implementing Internal Market Economics 249

25. Internal Market Economics Within a 258
Larger Transformation Strategy

APPENDIX 1: Limits to Market Economics 261

APPENDIX 2: The History of Internal Market Economics 263

APPENDIX 3: The Cost Model 269

APPENDIX 4: Beyond Activity-based Costing: 281
Second-generation Cost Models

APPENDIX 5: Systems and Tools 295

APPENDIX 6: Benefits by Component 305

APPENDIX 7: Steps in the Planning Process 315

APPENDIX 8: Actuals Subsystem Gap Analysis 321

Glossary 325

Footnotes 349

Index 357