A Trillion dollars to restore confidence in obsolete 20th century management
Past and current financial crises have been caused by failure to manage the actual business
A recent article in 21st Century Management Magazine explains the real need for investment to prevent future mismanagement that that produces these crises.
All financial crises, corporate governance problems, and other problems due to inadequate corporate or financial institution management have roots in one fundamental problem, the failure to organize and manage the actual business. 20th century management lays many structures for organization, strategies, account charts, processes, scorecards, etc over the business to manage the enterprise. The actual business in the cash expenditures for specific capital investments, performance costs from capital utilization, value created in results, and value added providing profits, capital returns, and capital worth is hidden under overlaid structures and never reported to management.
Enormous sums of money are used to cover up actual problems and restore confidence
No attention is being paid to eliminating the pervasive financial institution and corporate management problems that led to the crisis. The funds are used to pay a higher worth for the currently low-worth and unsellable assets of those who mismanaged corporate and personal funds, and transfer the potential further losses and gains to taxpayers. In effect, we keep covering up the unsolvable problems of 20th century management that have never been solved and can never be solved by more 20th century management.
Governments should help enterprises manage their actual businesses to eliminate 20th century management problems
The big change is the change in thinking required to put aside the lifetimes of misleading teachings and experience and visualize and understand the business as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Managing the business is common sense used by all to manage their personal businesses. The investment in managing the actual business is very small and recovered quickly the added value-added of a managed business.
The cost of a government investment program to assist local enterprises to organize their businesses for 21st Century Management is insignificant compared with the cost of bailing out companies and covering up the failures of 20th century management. The program will provide transparent reporting of the business for management, shareholders, and regulatory authorities. The program will provide real economic boost in the new value created by organized and managed businesses.
Learn more in the full article in 21st Century Management Magazine.
