The G20 restores Confidence in the Methods that caused the Economic Crisis
The G20 failed to identify or address the problems that caused the economic crisis
Many government and non-government experts have identified the need for new business practices and management structures to solve the problems within financial institutions and corporations, in order to prevent repeat the losses and failures that led to the economic crisis. The fundamental problems with risk management, capital worth (asset value) measurement, financial management, output result and value management, recording of financial and non-financial business data, consistent and accurate business management information, consolidation of businesses of corporations and institutions, and the many others must be solved in order to prevent future crisis. These 20th century enterprise management problems are identified and described in detail here at the Business Change Forum.
Descriptive white papers on 21st century business management; the only solution to the economic crisis, and on a government business management program to address the crisis were sent to all government agencies and multilateral institutions related to finance, commerce, banking, economy, and business worldwide. The information conflicts with the conventional thinking that limits the possibilities of these agencies, so it is deleted or ignored.
The G20 successfully repeated the mistakes of the past
The G20 meeting is being hailed as a success. The contributions to the IMF and the World Bank should help recovery in some needy countries. But, the biggest success of the G20 was to repeat prior successes in similar government action following earlier financial, economic, and corporate governance problems. One objective of the summit was to restore confidence in the methods, systems, structures, and regulations that caused the economic crisis. Like the response to all previous crises the G20 tweaked a few existing methods and called for expanded regulation of corporations, financial institutions, and tax havens.
Rather than addressing and solving the real problems, the G20 set the stage for repeat of crises in the future. History shows a crisis occurs somewhere in the world every few years, and that a major crisis erupts about every 20 years. Instead of taking action to prevent crisis, the G20 set the stage for corporations and nations again to proceed unaware into future crisis.
20th century accounting and financial management are being “strengthened” rather than abolished
20th century financial management and accounting are by far the biggest contributors to the financial and economic crisis and corporate governance scandals. It is their job to prevent the problems. They are extremely unprofessional allowing problems like intangible assets, unknown costs, unknown asset values or capital worth, unknown business investment amounts, unknown return on business investments, unknown value creation in the business, and other problems under their responsibility to go unsolved. Accountants zealously guard their prerogative to design an arbitrary chart of accounts that is not remotely related to the business and does not record actual business data. They then limit and manipulate the financial and non-financial data that is collected, distort and delay information that is reported in their adjustments and reserves, introduce entries that are not related to the business by adhering to generally-accepted accounting principles like “mark to market”, and select and distort the information reported to management and regulatory authorities. Management from many banks and corporations that incurred sudden losses point to inaccurate and misleading accounting and financial management information as the basic problem.
Many articles in the Business Change Forum discuss the problems with 20th century financial management and accounting. Over the years much information and white papers on actual business management has been sent to every professional accounting body and government standard setting, certification, and financial control agency worldwide. Again the information is ignored.
21st century business management allows the accounting profession and accounting units to go their own way. Business management institutes professional facility records management, outside of accounting, to capture, record, and report actual business data to show the complete and accurate status of the business. The current business structure is maintained as business organization capital, and the strategic business structure is maintained as management strategy capital. Records management is forbidden from interfering with, distorting, or delaying management information. Facility records management provides solutions to consolidate, report, or provide access to information from records for all levels of management. Management receives one set of consistent, complete, and accurate business information to support actual business decisions.
Government regulations are strengthened rather than strengthening the capability to regulate
Another major problem that led to the financial crisis was the ineffectiveness of regulators in enforcing existing regulations. The G20 addressed this problem by agreeing to pass a range of new regulations. The fundamental problems in the erroneous, distorted, and limited information reported to regulators today that prevented effective regulation and allowed the economic crisis were not addressed and were allowed to continue. New regulations will simply result in additional erroneous, distorted, and limited information reported to new regulators, who will be equally ineffective in carrying out their regulatory responsibilities.
The G20 missed the opportunity to address fundamental problems, improve business worldwide, and gain the information to prevent future crisis
The G20 missed the opportunity to endorse business management programs to stimulate economies; solve the problem that caused the crisis; restore real confidence in business; collect business data needed for corporation, industry, financial, market, and economy management; and improve actual businesses to flourish in the eventual recovery. While the G20 is hailed as a success today, the missed opportunity is bound to be its future legacy when the next financial, economic, or corporate governance problem arises.
Result-performance Management (R-pM) provides the knowledge for actual business management
Result-performance Management (R-pM) is the only source of knowledge and expertise on how to manage the actual business. Forward-looking enterprises are now using R-pM guidance to organize and manage their business to gain breakthrough advantages over competitors burdened by unsolvable 20th century management problems. Business management is explained and documented in the Business Management Toolkit. The Toolkit provides procedures for actual business management and maintains emerging 21st century management conventions, definitions, and standards. Management consultants who base 21st century business management services on R-pM knowledge are licensed to help enterprises learn, organize, and manage the actual business. R-pM and business management are supported at result-performance-management.com.
The Solution to the Economic Crisis is explained in free downloads
Three free white papers explain the dead-end 20th century management problems, such as the failure to plan, account for, and manage the actual business, that caused the economic crisis, the way to eliminate the problems, and a government program to address the crisis by stimulating the economy, solving the problems, building a structure 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 solution to eliminate the problems
- Business management; the only Solution to the Economic Crisis explains how to plan and manage the business to capture business data and provide management the information needed for actual business, corporation, industry, and economic management
- A Government Business Management Program to Answer the Economic Crisis outlines a government program to encourage business management, stimulate the economy, restore confidence, organize businesses to flourish in the recovery, 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 address and personal password. Your email address is protected and used only for download problems, product updates, and occasional R-pM Member news and white papers.
