Title: Delimitations of the Overall Performance of the Enterprises That Are Quoted on the Capital Market
Abstract: ABSTRACT. Each enterprise, regardless of its type, activity profile and location, faces a multitude of factors which constitute the business environment. Managers cannot successfully administer these enterprises without taking into account the interactions with the technical, technological, economic, social, political, legal, psychological, demographic, other factors. mutual interactions between an enterprise and society are extremely complex. They are perceived differently depending on the position of the individuals and the social groups.JEL Classification: M11, M31Keywords: measuring the performance, operating models regarding the relationship between enterprise and its business environment, social partnersINTRODUCTIONOver time, performance was measured either by company size, or by profitability and profit or by treasury.The development of the financial markets and the requirements of the financial communication regarding the prediction of enterprises' future performance (demanded by investors) both need to measure performance in a dynamic manner. In order to achieve this goal, there are two currents which dispute their supremacy in the world of accounting, the current operating and the inclusive regarding the operations that are included in determining the outcome.According to the current operating concept, in the profit and loss account we need to include only the consequences of normal transactions, of exploitation of the financial year, and those that do not concern the operation are to be carried forward to the reserves. In this sense, only operating transactions allow the company's performance forecast.The advocates of this concept dismiss all the irrelevant elements revealing performance in the balance sheet of the profit and loss account. This way managerial performance is measured by restrictively retaining only the elements which can be controlled by them.In contrast, the inclusive means inclusion in the profit and loss account of the elements involving an increase or a decrease of the equity during the financial year, except for distributions of dividends or reduction of capital by distribution to shareholders, respectively the contributions made by shareholders.This dual approach aims to provide the users with a response to two categories of needs: to measure activity performance (current operating concept) and to measure the enrichment (all inclusive concept).CLASSICAL MODELS OF THE CORRELATION BETWEEN THE ENTERPRISE AND THE OUTDOOR ENVIRONMENTThe conception regarding the relationship between enterprise and its business environment has evolved over time, resulting in the following models: dominance model, market capitalism model and environmental model.2The domination model is a pyramid model and it reflects a certain hierarchy of society. Advocates of this model believed that the business environment and the enterprise dominate the mass of population. According to this model the following conclusions can be drawn:* society is hierarchized and dominated by a small number of people with influence and / or by certain institutions;* power is moving from the top of society down towards the masses, contrary to the democratic theory which states that leaders meet the requirements and wishes of the ordinary people;* policy-making process is dominated by the economic interests of certain persons or groups;* role of the private sector in solving local social problems such as unemployment and lack of housing, pollution, etc. is fictional;The political system meets the economic one, adversity between state and the private sector is very low or almost non-existent.The basic idea of this domination model was also advocated in 1956 by sociologist C. Wright Mils in his Political Elite Theory presented in his book The Power Elite. …
Publication Year: 2012
Publication Date: 2012-12-01
Language: en
Type: article
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Cited By Count: 2
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