Poor corporate governance allows economic crises and large business losses

Many experts rightly point out that one of the main causes of the economic crisis is the lack of corporate governance. But the solutions they advocate are stronger government regulation and stricter reporting requirements. Corporate regulation is not corporate governance.

How much more will corporations spend conforming to corporate regulations, before we realize that the whole approach to corporate governance is wrong? Today corporations measure and report contrived overlaid structures, rather than the actual business. Corporations govern by enforcing policies and rules, instead of governing approved business strategies and plans. Corporations and authorities address the symptoms of the corporate governance problem from the governance side with more rules and regulations, instead of solving the problem from the corporate side, by organizing and managing the business. We are now repeating the same past mistakes in response to the current economic crisis.

Good Corporate Governance manages the transition of the current business to the approved strategic business

Corporate governance is internal so that the corporate management has the capabilities to ensure continuation of a strong and ethical corporate business that is planned and managed to create strategic result value, maintain and manage capital worth, and control on-going performance costs. Rule No. 6 of 21^st century business management: Plan and govern the transition from today’s value to approved strategic value. Business management eliminates contrived 20^th century structures that cause our corporate governance problems and, instead, organizes the business itself as one integrated structure for 21^st century business management and governance. The future business is planned and approved in the strategic business structure to plan the value of strategic results and the result research, capital solution development, and strategic value creation needed. Result goals are set and managed time period by period to the strategic business. [more...]

Enterprises today cannot collaborate in result value and quality chains

Business collaboration is an unsolvable problem of 20^th century enterprise management used today. Organizations, processes, systems, accounts, reporting and other structures laid over collaborating businesses conflict and employ inconsistent definitions and methods. The problem is addressed by laying other structures over the businesses for data reconciliation, information management, or a contrived multi-business process. This does not enable real collaboration, but allows reporting on what is occurring across the collaborating enterprises.

Business collaboration is impossible until businesses are managed

By definition business collaboration requires that first each business that is to collaborate is managed. The business is defined as “investments in capital as solutions of worth utilized for costs and effectiveness of performance to produce value and quality in results”. Each collaborator must manage the results of value and quality produced by the business, the capital of specific investment and operating costs utilized in the business, and the costs and effectivness of performance that produces each specific result.

Business management enables collaboration and management of shared value

When each collaborator manages the economic output results produced, capital investments implemented as solutions, and the performance of each solution to produce a result following 21^st century business management conventions, definitions, and standards, there can be real business collaboration. A result value and quality chain can be linked across businesses to produce each result where the best value and quality can be achieved, eliminate duplicated results, and control capital utilization to produce the maximum value-added in the final customer result from the chain. [more...]

20^th century capital development is ad-hoc and separate from the business

Capital is not acquired, developed, or managed as part of the business today. Capital financial investments are made by a financial unit in isolation from the business or returns needed for the business. Capital development investments are normally ad-hoc projects to produce a new fixed asset or to lay a new structure over the business. The specific solutions involved, the investment cost by solution, or the output results of benefit to be produced by the investment rarely are known.

Capital development must develop specific solutions to utilize in performance to produce measured results

Capital solutions needed by the business must be planned and developed by result to be produced by utilizing the capital. Each result absorbs a portion of the investment cost and provides a value-added to contribute to the return on the solution investment. The full set of solutions needed to produce the result must be planned and integrated to produce results successfully with a high value-added. Capital solutions must be produced as results of a development project to utilize project capital and capture full costs of the solution. The solution is implemented with the investment balance to be amortized against the results produced over the solution life.

21^st century capital development produces result value-added for solution return and worth

Implemented solutions are utilized to produce each volume of output results. The performance costs are captured against each result and reduce the unamortized investment balance and capital worth to pay back the investment. The result value-added over total performance costs should be positive to provide a further gain on the investment. The future solution worth is determined by the continuing absorption of performance costs until paid back and the future result value-added from solution utilization over the remaining life and later sale or disposal. [more...]

Corporations today are not able to manage their businesses as part of a corporation business

All business managers are familiar with such 20^th century management problems as unknown costs, unknown value and quality chains, unknown investment costs, unknown return on investments in specific capital items, unknown capital worth (asset value), intangible assets, inaccurate and missing management information, and on an on. These unsolvable problems are symptoms of the one fundamental corporate management problem the failure to manage the corporate business. Corporations today lay organization and management structures over the businesses at headquarters, division, subsidiary, and other levels that prevent management of corporate businesses. The various corporate businesses cannot be consolidated into one corporation business.

Business management at all levels is the only solution for effective corporation business management

Business management is the only method available to consolidate and manage the corporation business. Each part of the corporation must be organized and managed as a business. Businesses at a lower-level add into the businesses at a higher-level until the corporation is managed as one business with one complete, accurate, and transparent business structure. All 20^th century management structures laid over corporate businesses at all levels and the related unsolvable problems are left behind. [more...]

Management consultants fail to address the unsolvable problems faced by all enterprises today

Most of the financial institutions, corporations, and other enterprises that have management problems retain management consultants for advice and management improvements. No current management consultant has the outlook or capability to help their client eliminate the one problem that holds back all enterprises and causes unsolvable management problems, the failure to manage the business.

All consultants today promote dead-end 20^th century enterprise management

Much change management consulting has been packaged into business services provided by hired staff, rather than professional problem solving for measured improvement. Recent books and media publicity show cases where the enterprise did not receive the professional services expected from management consultants. All consulting services today promote obsolete 20^st century enterprise management to lay new or improved organization, account, system, and other management structures over the business.

A new business management consulting model is available to restore professionalism and prevent business problems

A 21^st century business management consulting model is now available to help enterprises organize and menage the business to eliminate problems by providing:

• Services based on organizing the business for 21^st century management
• A method for the enterprise to lead and participate properly in business change
• A clear framework to manage the scope and participation for both parties
• Methods and tools that both the enterprise and consultant understand and use
• Planned and measured value of the consultant and success of the enterprise

The model builds enterprise capabilities to manage the business and business change, and focuses consultants on high-value professional results the client enterprise cannot achieve on its own.

The business management consulting model organizes services within an enterprise, market, industry, or economy business structure

The 21^st century business management consulting model scopes all services within a business structure, and extends the structure to cover the complete enterprise, enterprise businesses within a corporation business, and businesses within markets, industries, and economies. All services provide a measurable result value-added return to the client enterprise and service users. [more...]

Performance quality is managed today through structures laid over the business

Business process management teaches us to manage "performance quality". Other methods like six sigma lay structures over the business to capture and manage statistics related to quality. Quality is related to the process followed and the actions executed.

Quality is an attribute of the result for each result in a chain

Quality is not an attribute of performance. There is no such thing as performance quality. Quality is an attribute of the output result produced by business performance. Business management replaces business processes with result value-quality chains. Quality is managed for each result in the chain to produce quality in the final result. The business process contains only the business and information system processing solutions utilized to produce each result, result by result, along the chain.

Business management manages capital qualifications and performance effectiveness to produce quality in each result

Each solution implemented to produce a result, must first be qualified to produce a quality result. Solutions are then utilized in performance to produce the result quality. Performance effectiveness is the proper utilization and application of the solution qualifications to produce the planned quality of result. A defective result can be produced by a defective input result, a poorly qualified solution, or lack of performance effectiveness to properly apply solution qualifications to produce a result. All of this is planned, measured, and managed to ensure result quality along a result chain leading to a customer result that has the quality expected by the customer for the money paid that sets the perceived value of the result. [more...]

Business change and change management are major problems faced by enterprises today

Business change today involves major projects to lay new organization, process, account, performance management, or other structures over the business. Business change today is change to structures laid over the business, but does not change the actual business, which lies hidden under overlaid structures. Business change involves significant investment and often requires management consultants and change management services.

Business change problems are eliminated by organizing and managing the actual business

The business must be organized and managed in order for the business to be changed. The business consists of capital investments in the business organized as specific capital solutions, economic outputs produced by the business organized as specific results, and business performance in the utilization of a specific capital solution in a performance domain to produce a specific result. Capital solutions, results, and performance domains are organized as data sets to manage the attributes, determinates, and measures of each. All business decisions and business changes involve results to add, improve, or close in order to improve the business; and capital solutions to acquire, develop, implement, improve, or close in order to produce results.

Business change is routine with 21^st century business management

The actual business organizes results, capital solutions, and performance domains in the current in-operation and strategic business structures. Business change is routine to add, improve, or close results by implementing, improving, or redeploying the capital solutions that produce the result. Business change for improvement involves planning new results needed and the capital solutions that must be acquired and developed and implemented to produce the result. Business change is a routine part of 21^st century business management. 20^th century business change and change management problems are left behind. [more...]

20^th century enterprise management defines performance to include capital, solution utilization, and results

20^th century management used by all enterprises today defines performance to include capital utilized in actions executed and the results accomplished. This definition prevents capital solutions, utilization of a solution to produce a result in performance, and economic output results produced from being managed as separate entities. Key performance indicators mix capital, performance, and results together.

Capital solutions, solution utilization in performance, and results must be defined as separate sets in order to manage the business

The actual business is organized, planned, and managed through three entities; capital solutions invested in the business, utilization of solutions to produce results in performance, and the output results produced. These three entities are not defined as data sets today, so the business cannot be managed. Instead the enterprise is managed by laying organization, account, performance management, and other structures over the business.

21^st century business management optimizes capital solutions, capital solution utilization in performance, and results to optimize the business

Once capital solutions, solution utilization to produce results in performance, and results produced are described, organized, and measured by specific attributes in data sets, the business can be managed. The related attributes in capital measures, performance indicators, and result metrics are managed in capital development and operations for cost-effective performance to produce value-quality results to optimize the business. [more...]

Unreliable and inadequate accounting arises from failure to manage the business

Incomplete and inaccurate accounting is one of the major outgrowths from the failure to manage the business of enterprises today. Since the business is not managed, actual business transactions are not recorded and actual financial and non-financial management information is not reported. Many managers complain about the shortcomings of today's accounting, but the problems and shortcomings continue to be ignored by the accounting profession. Financial statements only report known capital and expenditures in whatever accounts are maintained, and often mislead management, shareholders, and regulators.

Today's accounting does not record the business or provide the information needed for business management

Significant problems arise due to the failure to account for capital invested in the business as specific solution investment balances, capital worth decline in performance costs as solutions are utilized or consumed, business result value and value-added after performance costs, return on solution investments as payback in costs and gain in result value-added, capital solution worth (asset value) in the value of utilization and disposal over the remaining life, and business performance statistics that add meaning to financial and cost records.

The business must be managed in order to account for the business

Since the business is not managed the business cannot be accounted for. The actual business structure in results produced, capital solution investments, and utilization of solutions to produce results provides the only valid business recording (or account) structure. In the absence of a valid structure, a generally-accepted chart of accounts is laid over the business for hit and miss 20^th century accounting to record actual and accrued cash expenditures and known capital. Therefore the first step to complete and accurate 21^st century financial, cost, statistical, and qualitative records management and accounting is to learn and organize the actual business. [more...]

Today, data is collected and information is reported against structures laid over the business

Today, companies and other enterprises collected data against organization, account, activity, process, information system, and other structures laid over every business. Enormous amounts of data is collected against the overlaid structures, but actual business data is never captured and actual business management information is never reported. Enterprise and corporation management is hampered by the overload of conflicting information on enterprise structures and the lack of management information on the actual business.

Business management captures actual business data and reports actual business management information

Business management captures one set of complete, consistent, and accurate data against the actual business structure and reports one set of relevant, complete, and accurate management information. Actual business information is reported at the enterprise business level and consolidated in the corporation business structure at the corporate level. Government business reporting requirements can consolidate consistently defined enterprise business data in government business structures by industry, economic sector, market, or economy.

Management has the complete and accurate information to manage and optimize the business and new investments in the business

Management has information that is not available today to manage the actual business. Capital investments are managed to provide the planned and measured return and to manage the ongoing worth of capital solutions utilization and eventual sale or disposal. This includes the "asset value" of capital investments in securities and other instruments to produce income, dividend, and growth results. Business operations are managed as result value-quality chains to manage result value-added across the business to produce profit and shareholder value results. Management has one set of management information needed for business organization, planning, direction, control, reporting, and governance. [more...]