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The Value Creation Model
The value creation paradigm, VCP complements the profit and loss paradigm, PLP.
Rather than focus on the production functions and their effects on the financials, the
VCP focuses on the personnel, who operate these functions to create the financials.
This paradigm recognises the following three, 3 value types:
People Value, C
Organisational Value, ROI
The Value of the Business Environment, EB
The people value, C and the organisational value, ROI are linked by the following
relationship:
This is inclusive of the value of the business environment, EB. Given the
factor-C therefore, the factor-EB is automatically determined. Formally:
ROI = 2X – 1,
1
X =
1 – 1/C,
RES = RGT,
Po→1
Rgt = (%Nd/100)/S
Res = (1 – S)/(%Wk/100)
%Wk = 100(CWk/C’)
%Nd = 100(CNd/C’)
C’ = CWk + CNd
CNd = LogC/Log(1/S)
CWk = 1 – 1/3 S
RES = Index of the Response to Phenomena
RGT = Index of the Appropriateness of Response
Nd = Need Index
Wk = Index of Work
S = Index of Soul
C’ Index of Consciousness
C = Character Index
C = Character of Consistency
ROI = Return on Investment
The index of work, Wk measures the capacity to reconstruct the standard procedure
for the performance at task. The need index, Nd measures the obstacles in the path
of the reconstruction. These obstacles are environmental, deriving from entropy
contributions. In general, there are two, 2 sources of entropy as follows:
The second, 2nd
law of thermodynamics, which is natural: ±1
The paradox of society, which is cultural: F
Recall that by the second, 2nd
law of thermodynamics, nature is depreciating; from
greater order, to greater disorder. And the paradox of society is summarised in the
dictum below:
Society is the product of the activities of humans in nature
But in time, society became a monster that makes humans
According to the values, norms, mores, and traditions
When the culture of any society, as represented by the values, norms, mores, and
traditions for instance; deviates from the natural order, N-O then entropy is
contributed, according to the extent of the deviation. This entropy contribution is
therefore cultural, but adds, to increase the natural entropy. This makes the
environment more toxic, and therefore verminous.
The factor-C is optimised, according to the personality model of society, PMS
presented below:
Rn = F√n,
(1.00 ≤ F ≤ 2.00)
Rn = Rationality Index
√n = The Index of the Standard Procedure
F = Personality Index of Entropy contribution
The optimisation is achieved from both ends of the model. Character, C begins to
form at home, where the basis for rationality, Rn is established. It is accomplished at
work, where reward is based on the standard procedure for the performance at task,
√n. Recall the following dictum:
As the bit to the horse,
So is the pocket to the person
It is evaluated on the following differentials of the PMS, derived according to
the relationships established on the character model:
The factors Rn, √n, and Pc are measured on their various kits as follows:
The Rn-Kit
The √n-Kit
The Pc-Kit
When only the factor-Pc is given, the factor-√n is evaluated from the
following transforms:
The factor-C also has to be transformed on the following models:
Rn = 2√n – C2,
C1 = (3Pc + 1) / 4
Then: C = √ (C1 x C2)
√n’’ = 1 / C Pc2,
√n’ = (3√n’’ + 1) / 3
Then: Rn’ = 2√n’ – C2
C2’ = (3Pc + 2) / 5
C2 = (5 C2’ + 1) / 4