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Meaningful Metrics for a Smart Society
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Date: 2017-07-27 Page is: DBtxt001.php L0700-RE-ORGANIZATIONS


REPORTING ENTITIES ... ORGANIZATIONS
HOW ONE THING AND EVERYTHING IMPACTS ON EVERYTHING ELSE ... FOR GOOD OR BAD ... TRIPLE BOTTOM LINE
CONVENTIONAL FINANCIAL REPORTING IS EVERYWHERE / MORE AND MORE IMPACT REPORTING IS BECOMING A NEW NORMAL
ORGANIZATIONS: Banks / E-Business / Big retail / Franchise chains / Small business

Organizations report more than any other part of the socio-enviro-economic system, but the focus is all about financial performance and the impact for owners / investors. External impacts are ignored in conventional accounting and financial reporting. TVIA builds on the existing conventional accounting making it possible to also report on material externalities that impact people, society and the environment.

NAVIGATION VIA DIFFERENT GROUPS OF ORGANIZATIONS
There are many types of organizations, and many individual organizations. All of them have different characteristics. Some are making profit and doing good. Others are making profit and doing immense damage to society and / or the environment. We need to know a lot more about these characteristics in a way that is efficient, timely and relevant.
NAVIGATION TO SPECIFIC ORGANIZATIONS
The following are some of the many types of organizations. Organizations have been sorted by these types of organization. There is navigation to the individual organization via organization type.
Banking and Financial Services
Essential ... and at the same time a root cause of some of the socio enviro economic dysfunction
Open L0200-ORGS-BANKS-FINANCIAL-SERVICES
Companies ...
in manufacturing, resource extraction, distribution, etc. (not banking)
Open L0200-ORGS-COMPANIES
Cooperatives / Collectives
an old and important idea that has been sidelined in favor of investor owned and investor benefit organizations
Open L0200-ORGS-COOPERATIVES
Government Agencies
an old and important idea that has been sidelined in favor of investor owned and investor benefit organizations
Open L0200-ORGS-GOVT-AGENCIES
Healthcare
a big part of the modern economy but badly managed and badly served by prevailing management metrics and politics
Open L0200-ORGS-HEALTHCARE
International Development Assistance / Humanitarian Assistance
a part of the organizational ecosystem that should not be needed
Open L0200-ORGS-IDA-HR
Initiatives ...
The critical first step in implementing an idea
Open L0200-ORGS-INITIATIVES
Markets
an important part of the economic system, but increasingly gamed to create financial wealth while doing nothing for the real economy
Open L0200-ORGS-MARKETS
Multilaterial Organizations (MLOs)
International Development Banks / Intergovernmental Agencies / etc.
Open L0200-ORGS-MLOs
Non-Government Organizations (NGOs) / Not for Profits
a part of the organizational ecosystem that draws attention to problems but can do little to fix them
Open L0200-ORGS-NGOs-NPOs
Professional Firms
professional firms serve to advise in areas such as law, accountancy and consultancy
Open L0200-ORGS-PROFESSIONAL-FIRMS
Small and Medium Sized Enterprises (SMEs)
an important part of the economic ecosystem, but only a part and in many ways a constraint on progress
Open L0200-ORGS-SMEs
Think Tanks / Policy Analysis Organizations
sometimes very useful, but often merely a way to promote political ideology without addressing underlying ctitical issues
Open L0200-ORGS-THINK-TANKS

Brands
increasingly the consumer facing identity of a corporate organization ... often used to hide reality
Open L0200-ORGS-BRANDS
Networks / Platforms
enabled by technology, but ability to grow does not correlate well with ability to do worthwhile things
Open L0200-ORGS-NETWORKS

THE PURPOSE OF AN ORGANIZATION
THE ROLE OF ORGANIZATIONS
ORGANIZATIONS ARE ESSENTIAL TO MANAGING AT SCALE

Organizations have been a very important part of economic and financial performance for several hundred years. The metrics used in for-profit organizations to manage profit improvement have been very effective, but insufficient because they have ignored externalities up until now.
There are many types of organizations, and many individual organizations. All of them have different characteristics. Some are making profit and doing good. Others are making profit and doing immense damage to society and / or the environment. We need to know a lot more about these characteristics in a way that is efficient, timely and relevant.
No organization can be successful 'on its own' ... a successful organizations understands the context where it is working and acts accordingly.
The most successful organizations are those that have a meaningful social purpose as well as being able to give a decent return to the investors that fund the organization.
The idea that the main purpose of an organization is merely to make the maximum return for the owners is a legal construct that originated in the USA in the 1920s when Henry Ford and the Dodge Brothers were engaging in very unfriendly litigation ... rather the main purpose of many great organizations has been to do good for society as, for example, the manufacture of Sunlight Soap in the 1880s in order to improve health by a company that went on to become Unilever
ORGANIZATIONS - a critical component of the socio-enviro-economic system that enables efficiency
ESSENTIAL TO GETTING ANYTHING DONE
ORGANIZATION provide a framework for getting things done and achieving operational efficiency
ORGANIZATIONS ... Many different ways to organize ... different approaches ... different stakeholders ... different ownership ... but essential for performance efficiency
INITIATIVES ... THE FIRST STEP IN GETTING FROM AN IDEA TO IMPLEMENTATION AT SCALE ... PUTTING IDEAS INTO PRACTICE ... BUT VERY FEW ACHIEVE THE SCALE THAT NEEDED TO MAKE A SIGNIFICANT DIFFERENCE
PRIVATE SECTOR ORGANIZATIONS ... THE BEST CONTRIBUTE SIGNIFICANTLY TO QUALITY OF LIFE ... THE WORST DO IMMENSE DAMAGE TO SOCIETY AND THE ENVIRONMENT
FOR PROFIT ORGANIZATIONS ARE EFFICIENT FOR MONEY CAPITAL FORMATION BUT NOT SO MUCH FOR SOCIETY AND ENVIRONMENT
MainNav


Open MAIN-NAV-#11

Open L07-TVIA#CCICOO

GO #INITIATIVES

SlideNav


GO #OCN

GO #INITIATIVES
THE ROLE OF ORGANIZATIONS
ORGANIZATIONS ARE USED TO IMPLEMENT IDEAS.

Organizations have been a very important part of economic and financial performance for several hundred years. The metrics used in for-profit organizations to manage profit improvement have been very effective, but insufficient because they have ignored externalities up until now.

INITIATIVES
INITIATIVES
A KEY STEP BETWEEN IDEA AND IMPLEMENTATION AT SCALE

PUTTING IDEAS INTO PRACTICE ... IDEAS BECOME INITIATIVES ... AND THEN GRADUATE FROM THERE.
Most ideas do not become initiatives ... most initiatives have a short life before they fail. There are huge number of INITIATIVES, but many do not have durable impact. There are many reasons for this. Among the reasons are inexperience, inadequate knowledge of the issues and problems, and not enough funding.
Many good ideas fail. Few initiatives eventually become major organizations. Some of the problems and ineffectiveness would be avoided if there were better metrics and an efficient knowledge base.
NAVIGATION to thousands of INITIATIVES organized by initiative name (alphabetical)
Open L0200-ORGS-INITIATIVES

GO n1-SlideNav-for-TVA #INITIATIVES


ORGANIZATIONS - PRIVATE SECTOR
PRIVATE SECTOR ORGANIZATIONS
MANY DIFFERENT FORMS TO SUIT DIFFERENT PURPOSES AND SITUATIONS

A successful society needs ORGANIZATION and ORGANIZATIONS. There are many different forms of organization with very different socio-enviro-economic imnpact. Metrics about organizational performance have been goood for investors but less good for society and the environment. The purpose of TVA is to even this playing field.
Open L0200-ORGS-MAIN
COMPANIES ... BIG DOMINANT MULTISTATE COMPANIES
BIG COMPANIES DOMINATE THE MODERN SOCIO-ENVIRO-ECONOMIC SYSTEM ... THEIR EFFICIENCY IS A KEY DRIVER OF PROGRESS
Because of their scale they have an outsize impact on the system as a whole. The performance of companies has been a key to major change in the past and will continue into the future. The profit measure served well in the past, but this has changed and a more refined set of measures is required for an efficient future ... that is True Value Accounting
Open L0200-ORGS-COMPANIES GO SlideNav-for-TVA #OCN
BANKS AND FINANCIAL SERVICE ORGANIZATIONS
PROVIDE A VITAL SERVICE FOR SOCIETY BUT DO NOT GENERATE VALUE ADD ... THERE PROFITS ARE A BIG COST TO SOCIETY
Money, banking and financial services are a critical lubricant for the socio-enviro-economic system, but are neither the engine nor the essential fuel!
Open L0200-ORGS-BANKS-FINANCIAL-SERVICES
SMALL BUSINESS / SMEs
AN IMPORTANT PART OF THE SOCIO-ENVIRO-ECONOMIC SYSTEM BUT OFTEN INEFFICIENT AND DISADVANTAGED
Small business is an important part of a community, but seriously disadvantaged relative to the efficienty of the very large corporate organizations
Open L0200-ORGS-SMEs
COOPERATIVES
A FORM OF ORGANIZATION THAT PUTS STAKEHOLDERS OTHER THAN THE INVESTORS AT THE CENTER
Cooperatives have proved to be an effective form of organization for society, but less popular with the investment community
Open L0200-ORGS-COOPERATIVES
THINK TANKS / POLICY RESEARCH
A USEFUL PART OF A DEMOCRATIC SOCIETY UNLESS THEY ARE DRIVEN BY IDEOLOGY RATHER THAN RESEARCH AND FACTS
These institutions have an important role in providing politicians with talking points and a basis for legislation
Open L0200-ORGS-THINK-TANKS
NON GOVERNMENTAL ORGANIZATIONS (NGOs) / NOT FOR PROFIT ORGANIZATIONS (NPOs)
AN IMPORTANT PART OF THE SOCIO-ENVIRO-ECONOMIC SYSTEM BUT WEAK BECAUSE OF INADEQUATE ACCESS TO RESOURCES
These institutions have an important role in the delivery of humanitarian assistance and development aid.
Open L0200-ORGS-NGOs-NPOs
INTERNATIONAL DEVELOPMENT ASSISTANCE / HUMANITARIAN RELIEF
AN IMPORTANT PART OF THE SOCIO-ENVIRO-ECONOMIC SYSTEM BUT WEAK BECAUSE OF INADEQUATE ACCESS TO RESOURCES
These institutions have an important role in the delivery of humanitarian assistance and development aid.
Open L0200-ORGS-IDA-HR

MARKETS
Markets are central to the idea of a free economy, but the way markets work in the modern enviro-socio-ecomomic system is not the way free markets really work. Understanding the way modern markets are working is an important part of understanding how the modern enviro-soci-economic system works and how things need to be changed.
Open L0200-ORGS-MARKETS

ORGANIZATIONS - PUBLIC SECTOR
PUBLIC SECTOR ORGANIZATIONS
MULTIPLE LEVELS OF GOVERNMENT, STATE OWNED ENTERPRISES, PROGRAMS AND PROJECTS

A successful society needs ORGANIZATION and ORGANIZATIONS. There are many different forms of organization with very different socio-enviro-economic imnpact. Metrics about organizational performance have been goood for investors but less good for society and the environment. The purpose of TVA is to even this playing field.
MULTILATERAL and INTERGOVERNMENTAL ORGANIZATIONS
like the WORLD BANK, the UNITED NATIONS, REGIONAL GROUPINGS
These institutions have an important role in providing a framework of governance that goes beyond national boundaries
Open L0200-ORGS-MLOs
GOVERNMENT INSTITUTIONS, AGENCIES AND PROGRAMS
Many things are best done by government, but these things should be done efficiently. Low efficiency, poor accounting, accountability and transparency are big issues in government. Government has a poor track record in handling corruption at all levels.
Open L0200-ORGS-GOVT-AGENCIES
THE MILITARY
The MILITARY and the MILITARY INDUSTRIAL COMPLEX have become very large and very powerful. They absorb a huge amount of wealth, and it is not clear whether the value fo the military establishment justifies these costs.
Open L0700-SI-MILITARY-INDUSTRY-COMPLEX
POLICE, COURTS AND PRISONS
The JUSTICE SYSTEM comprising POLICE, COURTS AND PRISONS needs to deter crime, to punish and to rehabilitate. Some police capabilities and performance are exceptional while some police behavior is reprehensible. These are important elements of a just and civilized society.
Open L0700-SI-POLICE


BRANDS
In many case the BRAND is more important to the consumer than the product. Brand reputation is one of the main connections that a seller has with the customer, and this is enabled and maintained by the advertising industry. Loss of brand reputation is a major risk for every organization that sells using brand identity.
Open L0200-ORGS-BRANDS

INDUSTRIES ... THIS SHOULD PROBABLY BE MOVED !!!!!!!!!!!!!
Industries are similar to sectors. Compared to a sector, an industry has more focus. There may be several industries within a sector. Companies identify with an industry.
Open list0300-INDUSTRIES

FUNCTIONS
FUNCTIONS ... as in accountancy, law, architecture, music, engineering, health, teachers, etc.

Corporate Governance for a Changing World
Purpose of the Corporation Project, an initiative of Frank Bold with the support of the Modern Corporation Project at Cass Business School, launched the Corporate Governance for a Changing World Roundtable Series on corporate governance
Open PDF ... Corporate-Purpose

ORGANIZATION
THE IDEA OF ORGANIZATION / BIG PROJECTS TAKE ORGANIZATION / THINK THE PYRAMIDS IN EGYPT
Without organization there is chaos. One of the things that has made modern productivity possible

Many Forms of Organization
ORGANIZATION
THE IDEA OF ORGANIZATION / BIG PROJECTS TAKE ORGANIZATION / THINK THE PYRAMIDS IN EGYPT

WITHOUT ORGANIZATION THERE IS CHAOS. There are many ways to organize, but the primary goal of organization is to do something with efficiency. Measurement is an essential part of effective organization.



B Corp -vs- Benefit Corporation







Overview of the ORGANIZATION Perspective
The purpose of economic activity is for people to improve and maintain their quality of life and standard of living. The business ORGANIZATION can be a very efficient way of implementing economic activity. The assumption that what is good for business is good for people and society is however not supported by recent experience, though it was reasonably valid for most of the industrial revolution until around the 1970s.
There are very powerful metrics around the accounting and reporting of business organization performance. These are based on what may be referred to as conventional accounting whcih tracks all money based transactions related to the organization and organizes the information into accounts that facilitate reporting of the balance sheet ('state') of the organization and the profit and loss account ('flow' or profit) of the organization. This system of metrics is powerful because it allows for easy summarization of the data for reporting and in addition allows for 'drill down' to detailed levels all the way down to the individual transaction.
Conventional metrics do not, however, incorporate the impact the activities of the organization are having on the external world. Everything is focused on the performance of the organization and all the impacts on people, planet (environment), society, etc. are ignored. To a great extent, it is only legislation and regulation by government that gets the attention of the business organization to these externalities. MDIA is a system of accounting that incorporates conventional money accounting, but also includes all the transactions that have impact on all the capitals, not just the money capital or financial capital.
Navigation within this page
Go to Output / Products
Go to Materials / Supply Chain
Go to Energy
Go to Payroll
Go to Plant
Go to Process
Go to Philanthopy
Go to Taxation
Go to Enabling Environment

Outputs / Products
The revenues are a function of the output and the price. To the buyer this price becomes a cost. For the seller, the profit is the amount the revenues exceed the costs. The impact of the product is a function of the early supply chains, the latest process, the use stage and the post use waste stage. For a full understanding of the product, the whole life cycle needs to be taken into consideration. Modern technology is enabling more information about the price of a product and what others think about the product, but the technology has not yet been applied to providing information about the impact the product is having on the complete enviro-socio-economic system.
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Input Materials / Supply Chain
All materials that are inputs into a production process have purchase price which becomes the cost of the input. But this is not just a single simple number, it is also a number that reflects the whole history of the supply chain. In order for the material to get to the point of purchase it has already gone through a chain of processes all with a full range of elements of cost and impacts on everything. Each material going through a process has cost along these lines: materials, energy, labot payroll, labor benefits, taxes on labor, plant and equipment costs, advertising, financial costs, pro-good expenditures, government taxation, distributions to owners and retained profit. All of these are money costs to the business, but these costs also have impact on the people and place where the process is located.
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Open list0300-MDIA-Economic-Activity

Energy
The financial and impact accounting for energy is similar to that of materials in that there is a supply chain, and the use of energy in a process results in both benefits for the process, but also impacts on the environment. The accounting logic is the same, but the computation of impact is based on a different set of standard impact values. There are standard impact values for each type of energy: electricity from hydro is different from electricity from coal, for example. Electricity from wind or solar has a different standard.
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Open list0300--MDIA-Energy

Payroll
Payroll costs include the labor payroll, the labor benefits and maybe also taxes assessed on labor. These are all costs to the business (economic activity / process). However, these expenditures are also very important benefits to the individuals concerned and their families and the broader society in which they live. In economic analysis there is the impact of the 'multiplier' which associates the money earned in one activity with the money that subsequently flows through the economy in other activities. This has been computed recently in the Local Multiplier 3 (LM3) initiative for different locations in the UK, but is widely understood in economics. In the end it is payroll that funds aggregate demand. There is however, the perverse problem of more payroll is good for the broader economy but a lower payroll is good for the profit of the organization and the wealth of the owners. Productivity enables a lower payroll and more profit, but this sam productivity can end up destroying aggregate demand. In the short run the business does well. In the long term the business fails.
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Open list0300--MDIA-Payroll

Plant and Equipment
An economic activity usually has some plant and equipment that is needed for efficient production. This plant and equipment has a capital cost. It also needs maintenance. The cost of using plant and equipment should be factored in using depreciation and accruals for maintenance that is being deferred.
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Open list0300--MDIA-People

Process
The process transforms products that are inputs into the products that are outputs. The technology and efficiency of the process determines both money costs and environmental and social impacts.The cost and impact of process may be represented by standard costs for the various aspects of the process.
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Open list0300-MDIA-Product

Philanthropy
Philanthropy or 'Pro-Good-Expenditures' have a cost that is a charge against the profit or surplus of the organization, but the activities that are funded with this money may have an important impact on the environment and on society depending on the activities. In some situations the cost of philantrhopy reduces the cost of taxation which increases surplus but reduces the impacts associated with the payment of taxes.
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Open list0300--MDIA-People

Taxation ... payments to Government
Taxation and other payments to government have a cost that reduces the profit or surplus available for distribition to investors, but the funds that flow into government are essential for the funding of government and the services that government has to provide in a modern society. The idea that less government is always better is wrong. The issue is the efficiency of government and the quality of the programs that are implemented.
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Open list0300--MDIA-Taxation

Enabling Environment
The enviro-socio-economic system is very complex. Value adding economic activity is essential in order to support quality of life and standard of living, and for this activity to thrive there must be an efficient enabling environment. This means that there must be a system of laws and justice so that economic transactions can take place with a minimum of risk, that investments may be made, and so forth. In many places around the world setting up a business is a very difficult process that costs in both time and money, and in many places economic transactions are constrained in all sorts of ways. Business flows most easily with an enabling environment that has the least rules, but at the same time, too little of rules and regulation also may result in a range of abuses like inadequate workplace conditions, inappropriate exploitation of labor and pollution of the environment. Getting the balance right between ease of operation and good practice that has favorable impact for society and the environment is important and not easy.
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Open list0300--MDIA-People




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