Search
Related Links
Immaterial Values in Business Management
Author: Stephan Szugat
Word Count: 915
Article URL: http://www.abenetis.com/encyclopedia.html
Format: 65 Characters per Line
------------------ ARTICLE START ------------------
Immaterial Values in Business Management
Maybe you have already heard that in some ways immaterial values
are important for business management. But you might not found
how to bring them into your management processes or into your
reporting packages. However, first of all we should be clear,
what immaterial values are? Well, this includes the balance sheet
information about intangible assets, but is going far behind it.
As we all know, decisions are mostly based on feelings or
emotions, than on logical judgement. A feeling is an energy.
Energy is not material, it is immaterial. The overall emotions or
motivation of employees in a business is a immaterial value, it
could have positive and negative impact on the business
development. Does sound very esoterical for you? Might be, but
today we know that our emotions drive a lot of our life.
Not only the feelings of the emplyoees have an impact on the
business development, also the feelings of potenial customers
have it. These customer feelings could be measured as customer
satisfaction, as how customers see the company or it's products
and services and so on. There is more energy, which is
immaterial, included in our business life as we are aware of.
Until today we might know about these energies or have read that
businesses have to be more aware of them. But to find Solutions
which are able to measure these energies are not very common and
hard to find. Business Management still uses hard figures such as
ratios based on financial values and just forgets that there has
been more than only the numbers from the accounting and the money
in the pocket.
If you only look to the accounting figures of a business, you
only look to this company as if you were looking at an iceberg.
You only see a fraction of the iceberg, only what is above the
surface. Everything below the surface is out of your view. While
the iceberg is melting away, it still brings up new parts of it
self. But you only see this new parts, when the iceberg is
melting. It's just the same with the accounting figures as soon
as you see them they are gone. That means they are old, it's nice
to knew them, but they relate to business already accomplished.
The accounting figures are just like to iceberg when it comes
above the surface while it is melting away. Now, wouldn't it be
great to see the whole iceberg, even if a big part is below the
surface? Yes, it would be great. The immaterial values of your
business are just below surface. If you bring them up, you could
see the whole picture of your business.
Running a business only focusing on profit could lead to running
into a collapse. It might take time, but soon customers and
employees will find out that just the profit counts to a specific
company. Well, it's correct, no business could survive without
profit, but first of all every business has to make profit on
immaterial items, such as image, motivation of employees and
customers faith.
One day from these immaterial profits the financial profit
arises. That's the theory. Propably you already read about this,
but have you found a way to measure immaterial values of your
business? It's not that difficult, but it needs some thoughts.
First of all it is important to make a list of immaterial values
which have the most impact on the business development. When this
has been finished, methods to measure and valuate the immaterial
values have to be found.
And at last, the values for all the selected immaterial items
have to be analysed regularly. Setting up such a Reporting System
for immaterial values could be a long lasting task. You might try
to do it with a spreadsheet program or with a database, but
either way will take it's time. Using ready made Standard
Software might be another option, but there are not much choices.
In case you use the Balance Scorecard, you might think having all
the data mentioned above and you might think having a good
solution for analysation.
The Balance Scorecard has it's advantages, but for a short, fast
and regular analysis of immaterial values it is far to complex
and much to slow. There is just the need to measure, store and
analyse some data. About 30 items will be enough to have an
overview of immaterial values and some material values as well.
Most of the necessary data are usually already stored in every
business. They only need to be concentrated into one table and
have to be analysed.
Are immaterial values important for every business? Yes. This
includes big businesses as well as the one-man-business, retail
stores, mechanics, freelancer and so on. You may find more
information on immaterial values in business management, when
searching for Early-Warning-System, Early-Recognition-Sytems and
something similar. You are able to find one or the other
immaterial value included in Management Methods, Ratio Systems
and Financial Analysis. But still, most Reports and Measurement
System are based on financial data.
A Solution which every business, no matter of size, could use, is
the abenetis ERS (Early-Recognition-System). It is called Early-
Recognition-System, because with the used immaterial values every
business could be aware of tendencies in it's business
development soon. At the moment the abenetis ERS is available
only as Online-Service, but could soon be delivered as Intranet-
Version, too. More details are available at our ERS-Subscription Page.
------------------ ARTICLE END ------------------
About the Author
Stephan Szugat is founder of abenetis a web-based service about Business Management Solutions focusing on the core needs of business management. He has approx. 15 years experience in the Finance and Accounting Area from companies of different size and from various industries. http://www.abenetis.com