Accounting, today, does not maintain accurate business records

20^th century management does not organize or manage the business. This makes it impossible to keep records on output results of value produced by the business and the consumption of capital in costs to produce each result. Instead of recording the actual business, a chart of accounts is laid over the business to record income and expenses and the worth of certain known assets. 20^th century accounting records the cash generated and spent by the business, rather than recording the complete development and utilization of capital and the complete economic output results produced by the business.

Accounting, today, contains many unsolvable 20^th century problems

Accounting is one of the main unsolvable problems of 20^th century management. Accounting is separate from the actual business, records only a small sub-set of needed financial and non-financial business records, sees it role as control rather than capital management and business support, allows financial management problems such as intangible assets and unknown costs to persist, does not provide accurate business information needed for corporate management and governance, and on and on.

R-pM accurately records and accounts for the actual business for 21^st Century Management

21^st century management uses Result-performance Management (R-pM) to organize the actual business as one integrated business structure. The business structure replaces all organization, accounting, planning, performance, costing, reporting, and administration structures laid over the business. R-pM employs professional records management to manage facility records as capital, to maintain complete and accurate financial and non-financial records on the actual business, and to provide information performance solutions from records for good corporate management and governance. Records management is integrated within the business to be utilized to make decisions at all levels and to record accurately actual business decisions made [more...]

Knowing and managing costs has been a major management concern, since the beginning of business. We have faced two major problems in managing costs:

• We do not have one entity that incurs costs and includes all costs
• We do not have one entity that meaningfully absorbs costs for good management

Many methods have been contrived for costing and cost accounting. The methods try to gather "known" costs for separate entities like employees, fixed assets, cash, and supplies. The other capital utilized has never been defined or is labeled "intangible assets" with "unknown costs". All costs come from consumption of tangible and intangible capital. This is performance and all capital utilized must be organized and defined as one entity "performance solution".

Costing methods charge costs against contrived entities like center, station, activity, and product. Product is the only entity actually produced by the cost. However, many other outputs also are produced by costs. Products and other outputs produced by costs are part of one entity "result". The result is the entity that contains the value created by the costs and is the only entity that can absorb costs to show the value added by performance.

The only way to know all of our costs and to charge costs properly to manage value added is Result-performance Costing. By establishing result value-quality chains, we can know the cost and value of each result in the chain leading to the final product or service result that leaves the enterprise to produce our revenue and profit results. [more...]

Human capital is integrated with the business through human capability capital, which is the capability rather than the human personnel solution that possesses the capability. Human capabilities are defined and designed into the business process to utilize and execute the process to produce the specific result. Capability specifications and utilization of the capability are described as human knowledge solutions to support human capability development and capability utilization.

Human capability is the performance solution that most determines result quality and value. 21^st Century human capital development plans and projects primarily are directed to human capability development needed by the business to produce higher-value results and to develop higher-worth human capital. [more...]

The organization structure is the fatal error of 20^th century management

How was your enterprise organized? Was there an organization study, which produced one of the many ways an enterprise can be organized. People think that the enterprise organization structure is business organization. But, in fact, the structure does not organize the business. The enterprise organization structure is laid over the business, causing the reorganization problem when the actual business changes while the organization structure remains fixed. The enterprise organization structure is the fatal error of 20^th century management. Once an organization structure is laid over the business the business can never be managed.

The only valid organization is the actual business organization

The enterprise business is defined commonly as "the activity of providing goods and services". Organize the business means organize "the activity of providing goods and services" to produce actual business data on the cost-effectiveness of capital utilized in business activity or performance to provide value and quality in goods and services and other results for direct business management.

R-pM organizes the actual business to eliminate structures laid over the business

Result-performance Management organizes the actual business through the three components; business results including goods and services, capital investments that must be utilized by the business, and performance in the utilization of specific solutions in business activity to produce specific results. The one business structure is used for 21^st Century Management to eliminate reorganizations and other unsolvable 20^th century management problem [more...]

20^th century management lays a monolithic business process over the business. Results are mixed with performance and defined as "performance" preventing actual business management. The objective is to manage "performance quality", but costs, value, effectiveness, and quality are hidden in the process.

Rule No. 2 of 21^st Century Management is to "Generate profits from a chain of managed value and quality". Result-performance Management (R-pM) replaces business processes with result value-quality chains to organize and manage the actual business to manage performance capacity to produce a result volume, performance effectiveness producing result quality, and performance costs creating result value. Result value-added is the result value less the total result cost. The actual business is managed to generate profits from a chain of managed result value-added. Contrived overlaid business processes are abolished. [more...]

20^th century management does not manage capital. Certain capital is administered and other capital is neglected. Facility capital includes all reusable and consumable assets and business records. But, the stress is on administering financial capital at the expense of other capital of increasing importance and worth. Financial management and accounting have developed their own principles and practices that isolate financial management from the business and often conflict with the needs of general business management.

R-pM manages all financial and non-financial facility capital as one category containing three classes in facility equipment reused to produce a set of results, facility supply consumed in producing specific results, and facility records for complete documentation of the business in solutions utilized and results produced. This enables integrated planning of the solutions needed to produce results, integrated utilization of solutions that produce the specific result, and integrated record-keeping and record extracts as performance solutions to produce new results. [more...]

20^th century management does not capture actual business data and does not provide the information to manage the actual business. 20^th century management gathers mountains of information, which are mostly irrelevant to the business, related to structures laid over the business. This creates the enormous IT overheads and information complexity problems. 20^th century management provides management information to manage structures laid over the business, rather than managing the actual business.

21^st Century Management manages the actual business through two integrating entities, capital utilized as performance solutions and economic output results produced. This enables data to be gathered on all actual business activity. Actual business management information solutions can be delivered to utilize any specific performance solution to produce any specific result, anywhere in the business. Information capital is managed professionally by those with the capability to provide information performance solutions needed to create value in results. [more...]

The 20^th century definition of performance used in business management defines not only the activity of performance but also the output results produced as performance.

The impact of this definition is that the actions of performance and the results produced by performance are mixed together in business performance management methods. The definition of performance prevents the 20^th century enterprise from organizing the business. Organization structures are laid over the business and require periodic reorganizations to align with the business.

The generally accepted definition of business is "the activity of providing goods and services". The definition shows that the business has two components:

1. "The activity of providing", which is performance in the utilization of human and other capital, such as equipment, supplies, processes, and tactics
2. "The goods and services provided", which are the outputs or results produced from performance that can be counted and measured

The definition of business shows that results must be separated from performance in order to organize directly the only two entities that describe the business:

1. The performance solutions that provide the capital utilized by the business to incur costs and produce the results
2. The results produced as economic outputs to create value from the business

R-pM organizes results produced and performance that produces results into one integrated business structure to gain advantages not possible with 20^th century organization structures laid over the business that prevent actual business management. [more...]

20^th century management manages the enterprise by laying organization and management structures over the business. We are familiar with the organization structure that is reorganized periodically, and management structures in the business processes, information systems, accounting entries, and reporting methods used every day. These structures record a multitude of data entities and can report mountains of information, but do not record actual business data or report actual business management information.

21^st century management organizes and manages the enterprise business as one integrated business structure. Business is "the utilization of capital in performance to produce value in results", so 21^st century management manages two entities, performance capital utilized and results produced, to organize and manage the business. Result-performance Management (R-pM) is the conventional method for 21^st century business organization and management. Your 21^st Century Management Manual is contained in the R-pM Toolkit, the continually expanding guide to 21^st century management [more...]

The 20^th Century Corporation has a problem defining value and managing value creation. Value is not organized and managed within the corporation as part of the routine. Methods and formulas are contrived to calculate numbers called "value". Business collaboration for shared value remains an elusive goal.

Result-performance Management (R-pM) organizes the business as results, the economic outputs that contain value, and as performance solutions, the capital consumed to incur the cost of producing the value. Value is an attribute of each result and is determined and utilized as a routine management metric.

R-pM is the only to way to redefine monolithic business processes as manageable result value-quality chains. R-pM enables value-quality chains, value and value-added management, strategic value creation, business collaboration for shared value, and integration with supplier and customer value-quality chains. [more...]