IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2020i1p183-d469028.html
   My bibliography  Save this article

A Model for the Sustainable Management of Enterprise Capital

Author

Listed:
  • Dariusz Klimek

    (Faculty of Management and Production Engineering, Lodz University of Technology, 90-924 Lodz, Poland)

  • Elżbieta Jędrych

    (Faculty of Business and International Relations, Vistula University, 02-787 Warsaw, Poland)

Abstract

This paper attempts to develop the concept of sustainable management of enterprise capital presented, e.g., in Economies at the beginning of the year 2020. After an introduction and presentation of the theoretical grounds for the construction of the model, the authors attempt at describing its characteristics in a few points, determining the relationship between the objectives of an enterprise and the capitals that constitute the elements of that enterprise. The main assumption in the model is that the management of an enterprise is a constant process of striving to achieve a goal or goals, and balancing the level of the capitals within the enterprise. The point of balance between six capitals of an enterprise entails, at the same time, the maximum effectiveness of this enterprise. The more effective an enterprise, the quicker the managers will reach the point of balance between the capitals, and the longer the managers will maintain the values of the capitals near the balance point. As a measure of effectiveness, the authors propose a coefficient of a mean percentage-rated difference between the capitals, which reflects the mean non-adjustment of the capitals, and the weighed capital differences coefficient, which reflects the effectiveness of an enterprise as a whole. In the second part, the authors prove that, simultaneously, both management based on the presented model, which is based on the effectiveness of achieving objectives, as well as the effectiveness of the capitals of the enterprise, with the use of the new economic ratios as indicated, may be an alternative to globally prevalent revenue as an economic measurement.

Suggested Citation

  • Dariusz Klimek & Elżbieta Jędrych, 2020. "A Model for the Sustainable Management of Enterprise Capital," Sustainability, MDPI, vol. 13(1), pages 1-13, December.
    • Handle: RePEc:gam:jsusta:v:13:y:2020:i:1:p:183-:d:469028
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/1/183/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/1/183/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    2. repec:dau:papers:123456789/1373 is not listed on IDEAS
    3. Timothy Besley & Maitreesh Ghatak, 2017. "Profit with Purpose? A Theory of Social Enterprise," American Economic Journal: Economic Policy, American Economic Association, vol. 9(3), pages 19-58, August.
    4. Dariusz Klimek, 2020. "Sustainable Enterprise Capital Management," Economies, MDPI, vol. 8(1), pages 1-10, February.
    5. Caroline Lambert & Samuel Sponem, 2005. "Corporate governance and profit manipulation: a French field study," Post-Print halshs-00170340, HAL.
    6. Evgenidis, Anastasios & Tsagkanos, Athanasios, 2017. "Asymmetric effects of the international transmission of US financial stress. A threshold-VAR approach," International Review of Financial Analysis, Elsevier, vol. 51(C), pages 69-81.
    7. Keen, Steve & Standish, Russell, 2006. "Profit maximization, industry structure, and competition: A critique of neoclassical theory," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 370(1), pages 81-85.
    8. Fisher, Franklin M & McGowan, John J, 1983. "On the Misuse of Accounting Rates of Return to Infer Monopoly Profits," American Economic Review, American Economic Association, vol. 73(1), pages 82-97, March.
    9. Frederick B. Hawley, 1908. "The Controversy about the Capital Concept," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 22(3), pages 467-475.
    10. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    11. Kenny Crossan & Thomas Lange, 2006. "Business as Usual? Ambitions of Profit Maximization and the Theory of the Firm," Journal of Interdisciplinary Economics, , vol. 17(3), pages 313-326, April.
    12. Simon, Herbert A, 1979. "Rational Decision Making in Business Organizations," American Economic Review, American Economic Association, vol. 69(4), pages 493-513, September.
    13. Ilídio Barreto, 2012. "A Behavioral Theory of Market Expansion Based on the Opportunity Prospects Rule," Organization Science, INFORMS, vol. 23(4), pages 1008-1023, August.
    14. Linda Argote & Henrich R. Greve, 2007. "A Behavioral Theory of the Firm ---40 Years and Counting: Introduction and Impact," Organization Science, INFORMS, vol. 18(3), pages 337-349, June.
    15. Penrose, Edith T., 1960. "The Growth of the Firm—A Case Study: The Hercules Powder Company," Business History Review, Cambridge University Press, vol. 34(1), pages 1-23, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Agnieszka Laskowska & Jan Franciszek Laskowski, 2022. "“Silver” Generation at Work—Implications for Sustainable Human Capital Management in the Industry 5.0 Era," Sustainability, MDPI, vol. 15(1), pages 1-25, December.
    2. Phina Njideka Onyekwelu & Godwin Imo Ibe & Francis Ezieshi Monyei & Joseph Ikechukwu Attamah & Wilfred Isioma Ukpere, 2023. "The Impact of Entrepreneurship Institutions on Access to Micro-Financing for Sustainable Enterprise in an Emerging Economy," Sustainability, MDPI, vol. 15(9), pages 1-15, April.
    3. Zhiying Ji & Tingyu Zhou & Qian Zhang, 2023. "The Impact of Digital Transformation on Corporate Sustainability: Evidence from Listed Companies in China," Sustainability, MDPI, vol. 15(3), pages 1-19, January.
    4. Unai Apaolaza & Aitor Orue & Aitor Lizarralde & Aitor Oyarbide-Zubillaga, 2022. "Competitive Improvement through Integrated Management of Sales and Operations," Sustainability, MDPI, vol. 14(5), pages 1-18, February.
    5. Wunhong Su & Xingxing Hu & Liuzhen Zhang, 2023. "Association Between Directors With Foreign Experience and Firms’ Environmental Disclosure," SAGE Open, , vol. 13(4), pages 21582440231, December.
    6. Taimin Li & Afzal Izzaz Zahari & Soliha Sanusi, 2023. "The Sustainability of Technological Innovation in China: From the Perspective of Network Relationships," Sustainability, MDPI, vol. 15(5), pages 1-26, February.
    7. Sigitas Vaitkevicius & Ojaras Purvinis & Leonidas Sakalauskas & Palmira Papsiene, 2023. "Rethinking the Role of Organizational Reflex in Maintaining a Company’s Sustainability," Mathematics, MDPI, vol. 11(10), pages 1-13, May.
    8. Lukman Raimi & Mirela Panait & Adriana Grigorescu & Valentina Vasile, 2022. "Corporate Social Responsibility in the Telecommunication Industry—Driver of Entrepreneurship," Resources, MDPI, vol. 11(9), pages 1-23, September.
    9. Elżbieta Jędrych & Dariusz Klimek & Agnieszka Rzepka, 2021. "Principles of Sustainable Management of Energy Companies: The Case of Poland," Energies, MDPI, vol. 14(8), pages 1-18, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elżbieta Jędrych & Dariusz Klimek & Agnieszka Rzepka, 2021. "Principles of Sustainable Management of Energy Companies: The Case of Poland," Energies, MDPI, vol. 14(8), pages 1-18, April.
    2. Bart Leten & Rene Belderbos & Bart Van Looy, 2016. "Entry and Technological Performance in New Technology Domains: Technological Opportunities, Technology Competition and Technological Relatedness," Journal of Management Studies, Wiley Blackwell, vol. 53(8), pages 1257-1291, December.
    3. Ilídio Barreto, 2012. "A Behavioral Theory of Market Expansion Based on the Opportunity Prospects Rule," Organization Science, INFORMS, vol. 23(4), pages 1008-1023, August.
    4. Jae Wook Yoo & Richard Reed & Shung Jae Shin & David J. Lemak, 2009. "Strategic Choice and Performance in Late Movers: Influence of the Top Management Team's External Ties," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 308-335, March.
    5. DeCanio, Stephen J. & Watkins, William E., 1998. "Information processing and organizational structure," Journal of Economic Behavior & Organization, Elsevier, vol. 36(3), pages 275-294, August.
    6. Siegfried Berninghaus & Werner Güth & M. Vittoria Levati & Jianying Qiu, 2006. "Satisficing in sales competition: experimental evidence," Papers on Strategic Interaction 2006-32, Max Planck Institute of Economics, Strategic Interaction Group.
    7. Schilirò, Daniele & Graziano, Mario, 2011. "Scelte e razionalità nei modelli economici: un'analisi multidisciplinare [Choices and rationality in economic models: a multidisciplinary analysis]," MPRA Paper 31910, University Library of Munich, Germany.
    8. Michaël Lainé, 2014. "Vers une alternative au paradigme de la rationalité ? Victoires et déboires du programme spinoziste en économie," Post-Print hal-01335618, HAL.
    9. Sent, Esther-Mirjam, 2004. "The legacy of Herbert Simon in game theory," Journal of Economic Behavior & Organization, Elsevier, vol. 53(3), pages 303-317, March.
    10. Sadok Mansour, 2007. "Modelisation Du Risque Dans Les Methodologies D'Audit : Apport Des De La Psychometrie," Post-Print halshs-00543217, HAL.
    11. Hosseini, Hamid, 2003. "The arrival of behavioral economics: from Michigan, or the Carnegie School in the 1950s and the early 1960s?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 32(4), pages 391-409, September.
    12. Schippers, M.C., 2017. "IKIGAI: Reflection on Life Goals Optimizes Performance and Happiness," ERIM Inaugural Address Series Research in Management EIA-2017-070-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam..
    13. Carolin V. Zorell, 2020. "Nudges, Norms, or Just Contagion? A Theory on Influences on the Practice of (Non-)Sustainable Behavior," Sustainability, MDPI, vol. 12(24), pages 1-21, December.
    14. Marvin B. Lieberman & Natarajan Balasubramanian & Roberto Garcia‐Castro, 2018. "Toward a dynamic notion of value creation and appropriation in firms: The concept and measurement of economic gain," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1546-1572, June.
    15. Elisa Giuliani & Federica Nieri & Andrea Vezzulli, 2019. "BEST IN CLASS BUT BIG WRONGDOERS: Exploring the financial performance and human rights infringe ments nexus in large emerging country companies," Discussion Papers 2019/250, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    16. Horaguchi, Haruo, 1996. "The role of information processing cost as the foundation of bounded rationality in game theory," Economics Letters, Elsevier, vol. 51(3), pages 287-294, June.
    17. Pavel Pelikán, 2010. "The Government Economic Agenda in a Society of Unequally Rational Individuals," Kyklos, Wiley Blackwell, vol. 63(2), pages 231-255, May.
    18. Sovacool, Benjamin K., 2009. "Rejecting renewables: The socio-technical impediments to renewable electricity in the United States," Energy Policy, Elsevier, vol. 37(11), pages 4500-4513, November.
    19. Luigi Cantone & Pierpaolo Testa & Svend Hollensen & Giuseppe Fabio Cantone, 2019. "Outsourcing New Product Development Fostered By Disruptive Technological Innovation: A Decision-Making Model," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(01), pages 1-45, January.
    20. Christina Fang & Jeho Lee & Melissa A. Schilling, 2010. "Balancing Exploration and Exploitation Through Structural Design: The Isolation of Subgroups and Organizational Learning," Organization Science, INFORMS, vol. 21(3), pages 625-642, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2020:i:1:p:183-:d:469028. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.