Performance Indicators in Business Value-Creating Organizations
Year: 2012
Type: article
Abstract: In this paper I propose a general model to understand (not merely describe) the operating logic of Busi-ness Value-Creating Organizations and, in particular of the capitalistic firm - that is, the business for-profit organization.When viewed as autopoietic and teleologic organizations, firms can be interpreted as operating systems for efficient transformation that carry out five parallel transformations,a. a productive transformation of factors into production; this is a transformation of utility, gov-erned by productivity and by quality;b. an economic transformation of costs and revenues into operating income; this is a transforma-tion of value, governed by prices and therefore by the market; c. a financial transformation of risks, which transforms capital into returns and guarantees the maintenance of its financial integrity;d. an entrepreneurial transformation of information into strategies, which leads to a continual re-adjustment of the firm's strategic position;e. a managerial (organizational) transformation of strategies into actions of management control.The model allows us to propose a system of performance indices and measures and to highlight the mu-tual relationships among these indices and measures.
Author: Mella, Piero
Institution: University of Pavia
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1509349048