Some people search for the equations that can relate the different natural forces (gravity, electromagnetic, etc…) I have long been searching for the connection between business and engineering. Last night I was in my Thermodynamics class and I came up with an interesting way to link the two.
Accounting, and perhaps Economics in general, is a monetary (single/multi variable?) version of Thermodynamics.
Think about it! Both are based off of obtaining equilibrium, and both obey general laws.
The first law of Thermodynamics states dU=dQ + dW
Basically, that there is a delicate balance of Energy, work, and Heat.
The second law of Thermodynamics, as I understand it, states that energy types within a system will naturally balance themselves.
Thermodynamics is all about balance.
Accounting is also about balance. But instead of balancing Heat, Energy, and Work, we’re balancing Liabilities, Assets, and Productivity.
Economics brings in supply and demand, micro and macro markets, and opportunity costs. Thermodynamics has energy supply and demand between phase transitions, closed and open systems, and phase diagrams that allow for individual variable changes to obtain changes of state.
I think someday a direct correlation could exist. Just like between Mechanical and Electrical (F=ma…. V=IR) I think that there might be a perfect crossover between accounting (ultimately economics) and thermodynamics. The goal? perfect quantification of managerial decisions using equations from engineering.
I’m going to work on this some more. If anyone is willing to help me do some research, I’d greatly appreciate it. I really think I have something here.