The only way to manage a Corporation; Manage Corporate Businesses
Corporate losses and failures are caused by failure to manage the businesses
Financial institutions say that they are unable to manage “asset value” as one reason for the current economic crisis. The term “asset value” shows that they do not manage the business of the corporation as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Much capital is not managed and is labeled as “intangible assets”. Other capital is not managed for the return on investment and the worth of the capital is not managed as a specific solution to be utilized and sold or disposed of at the end of its useful life. The term “asset value” shows the failure to manage the business. Assets are specific capital solution investments of positive capital worth. Value is an attribute of output results, such as interest and dividends earned, that provide the return on the solution investment. Result value-added is the value less the full performance costs of the solutions producing the result. Capital asset solution worth is the result value-added planned from the utilization of the solution over its remaining useful life, plus the result value-added from the sale or disposal of the specific solution. Financial institutions are not able to manage result value-added, capital solution investment return, and capital solution worth, and other measures because they fail to manage the business.
Corporations state that they are unable to manage the many parts of the corporation scattered around the world as a reason for their problems. Corporations define their parts as departments, divisions, business units, joint ventures, subsidiary companies, projects, programs, and various other kinds of units. Each unit is organized through an arbitrarily defined organization structure that is laid over the business. The organization structure is not related to the corporate business and does not fit into one consistently defined corporate whole. Different management structures are laid over each part of the corporate business for planning, direction, control, reporting, and governance. Corporations cannot manage value created in the various parts that add up to corporate value, full performance costs from all capital utilized, full investments and returns in specific tangible and intangible capital solutions, full capital solution and corporate worth, and many other important capital measures, performance indicators, and result metrics.
These are just two examples of the hundreds of unsolvable problems caused by the failure to manage the business in 20th century management used by all enterprises today. Now we see governments around the world planning economic revitalization programs, various guises of corporate bailouts, and new corporate regulations with no attempt to understand and solve the fundamental corporate management problem.
20th century corporations manages various structures that are laid over corporate businesses
The fundamental problem that has caused past economic, financial, business management, and corporate governance problems and that will surely cause future problems is failure to manage the business. Corporations conduct organization studies and apply organization theories to lay organization structures over the business. This is the fatal error of 20th century management. The business is not organized and, therefore, the business cannot be managed. Management structures such as corporate plans, charts of accounts, administrative functions, performance management scorecards, quality management, and many more are used to manage and report the corporation.
Overlaid structures conflict with the actual business creating the multitude of unsolvable 20th century management problems. 20th century management is a dead-end, since the problems can never be solved by new or improved structures. Excessive information systems are used to capture and report massive amounts of data and information on overlaid structures, but do not capture basic business data or provide real business management information. The problems must be eliminated by organizing and managing the business as one structure, and leaving all 20th century structures and problems behind.
R-pM manages each part of the corporation as a business
The business organization structure is not a management prerogative, political football, or consultant recommendation. The business organization is business capital that must be professionally-managed and continually-updated to define all the capital investments in specific capital solutions utilized to operate the business or to provide income results in an investment portfolio. The business organization must define all the output results that must be produced across a particular business, including those in the chain leading to customer results and those produced from investment solutions. The business is organized when specific capital solutions are implemented to be utilized in performance to produce specific results.
Result-performance Management (R-pM) organizes the business for 21st Century Management. The professionally-managed business organization structure also is used for all business planning, direction, control, reporting, and governance. 20th century management structures laid over the business are needed no longer, and are cleared away with the intrinsic problems and workloads. R-pM captures and reports actual business data for management information in capital solution capacity, investment amount, unamortized balance, qualification, reliability, return, worth, causes of problems, potential, and other capital measures; performance related to the solution and result in capacity utilization, cost, effectiveness, uncertainty, contributions, problems, expectations, and other performance indicators; and result volume, value, total performance costs, quality, risk, value-added, symptoms, goals, and other result metrics. None of this essential business management information is known as one complete and accurate set in any financial institution or corporation at any level today.
R-pM manages higher level businesses for product group, business unit, capital management, investment management, etc
R-pM utilizes 21st Century Management conventions and standards to define capital solutions, performance, and results consistently in a business, so they can be summarized to a higher-level business. The business can also be summarized by a defined descriptor of a business such as a product group result, businesses with the same objectives, businesses for a particular segment of customers, business interactions with particular markets, capital management results, investment management results, and any special descriptor defined by the corporation. Businesses can also be reported accurately by government-defined industries or economic sectors to support economic management. The business and all sectors and segments of the business are understood in terms of real business management information on capital measures, performance indicators, and result metrics.
R-pM manages the corporation as the sum of corporate businesses
Corporations, financial institutions, and other enterprises may have many parts scattered around the world. These parts are organized with organization structures and not defined as parts of the whole corporate business. There may be a corporate organization structure to relate the various organization units and entities. The corporation uses separate strategic maps and corporate plans to plan, processes and functions to direct, account charts and quality methods to control, and data reconciliation and enterprise information structures to extract inconsistent information from various structures for reporting.
R-pM manages the business for each part of the corporation and eliminates organization and management structures laid over the business. All operations, development, and management focus on utilizing specific solutions in performance to produce specific results to reach result goals by period leading to planned strategic result value. Each business has a current and strategic business structure that can be summarized into any corporate business area, sector, industry, or other corporate business descriptor.
The total business for any corporation is the sum of businesses in the various parts of the corporate business. All subsidiaries, divisions, ventures, headquarters operation, or other business entities that are part of the corporate business are summarized into the corporate business structure to provide a complete and accurate view of the corporate business for all reported capital measures, performance indicators, and result metrics. All project, program, campaign or other business endeavors within a business entity are organized as a result in the entity business structure and supported by subordinate business structures. Any result symptoms, performance problems, or capital causes appearing at any corporate level can be traced down to the specific business to implement a new or improved capital solution. The complete business is simplified, consistent, and transparent at all levels. Both the current and strategic businesses are continuously managed and updated. Information technology, now used to process structures laid over the business, is focused on the corporate business as capital solutions are utilized in performance to produce results around the world.
The R-pM Solution to the Economic Crisis is explained in free downloads
Three free white papers explain the dead-end 20th century management problems, such as investment analysis, that caused the economic crisis, the way R-pM eliminates the problems, and a government program to address the crisis by stimulating the economy, solving the problems, building an architecture for financial and economic management, and organizing local businesses to flourish in the eventual recovery.
- How to Eliminate Problems that caused the Economic Crisis explains the major unsolvable 20th century management problems and the R-pM solution
- The Only Solution to the Economic Crisis explains how R-pM manages the business to capture actual business data and provide management the information needed for actual business management
- A Government Business Management Program to Answer the Economic Crisis outlines a government program to encourage business management and manage economic cycles to prevent future crisis
These three white paper downloads are available to R-pM Community Members at Result-performance Management.com. There is no cost or obligation to join the R-pM Community. Join by entering your email and password. Your email address is protected and used only for download problems and occasional R-pM Member news and white papers.
