Managing Business Value-creating Organizations

By Piero Mella.

Published by The Organization Collection

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Article: Print $US10.00
Article: Electronic $US5.00

My study aims to present a coherent framework regarding the formal logic of value production in, or through, organizations. The subject matter is developed along the following guidelines:
1. the processes for the production of value are carried out by permanent production organizations, in particular Business Value-Creating Organizations (BVCO) or “capitalistic firms”;
2. from an internal point of view, BVOCs are operationally-closed systems that are at the same time structurally and behaviourally coupled to the environment; they perceive disturbances such as external stimuli, process these, and act (react or pro-act) to balance the network of vital processes;
3. in BVOCs the internal cognition is carried out by the management, which produces the thought of the organization (data gathering processes, rational calculations for decision-making, strategies, programmes and controls) from which the organization’s actions derive;
4. in this sense, BVCOs can be conceived as “conscious cognitive systems” that link themselves to the environment through a system of processed, up-dated, and evaluated information which we can define as the representation of the external world;
5. from an external point of view BVCOs are teleonomic systems that can continue to exist only as long as their performance as systems for the production of value is appreciated by the environment, according to a coherent system of performance indicators for the production of value (productivity, quality, economic efficiency, returns, Economic Value Added and Economic Value of the Firm).
6. the culture of value is diffused, and BVCOs not only have the maximization of value as their objective but must translate this into an operative approach to management problems.

Keywords: Value Creation, Organizations as Autopoietic Systems, Organizations as Teleonomic Systems, Organizations as Conscious Cognitive Systems, Structural and Behavioural Coupling, Shareholder Value, Performance Indicators

International Journal of Knowledge, Culture and Change Management, Volume 10, Issue 9, pp.1-18. Article: Print (Spiral Bound). Article: Electronic (PDF File; 1.017MB).

Prof. Piero Mella

Chair of Business Administration, Department of Management Research, Faculty of Economics, University of Pavia, Pavia, Italy

Born in Pavia, graduated in March 1969 with a first class degree in Industrial administration, in 1985 I won a chair as a full professor and lectured in Business Economics and Administration at the Faculty of Economics of Pavia. In 1986 I was elected Head of the Department of Business Research at the University of Pavia. From 1987-88 to 1992-93 I was Dean of the Economics Faculty at the University of Pavia. Since it was founded in 1990 I have been the scientific Director of the Masters in Accounting, Budget and Financial Control in profit organizations, set up by the University of Pavia. In 1997 I became Co-ordinator of the Doctorate in Business Research at the University of Pavia. In 2000 I created the scientific web site www.ea2000.it. My interests also deal in the fields of Complex and Holonic Systems and of Networks. In 1997 I have proposed the Combinatory System Theory, described at the web site: www.ea2000.it/cst.

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