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Each research project has to start with an analysis part that illuminates the environment in which one wants to move. You can compare the companies with vehicles. There are trucks, tractors, vans, cars and motorcycles. There are also mobile machines in which locomotion is only a secondary purpose. On the other hand, one can distinguish between production companies, trade and services. All vehicles have wheels, a chassis, an engine, a transmission and a steering. All businesses buy up inputs, create value and sell their services. They combine capital goods, consumables and labour. As with the performance of a vehicle, there are big differences in operational performance, but also many similarities.


The task of the enterprises is the generation of profits over the value creation process. It consists of the sequence of

Purchase   =>   Production   =>   Sale.

The sale is designed to meet the needs of customers and to generate sales from them. In production different factors of production are combined. When purchasing potentials (durable goods) and repetitive factors (consumer goods) and labor can be distinguished. The processes can thus be simplified as follows:

Fig. 1: Value creation process

(Source: own illustration)

The companies offer the markets a problem solution as a product. Thus needs of customers have to be satisfied. Customers need to be prepared to spend enough money to make the service cost-effective and profitable.

In order to realize the problem solution, a start-up financing of the added value ① must be organized. As a result, capital goods and production inputs are purchased and personnel ② are paid. These three operational production factors are combined in the production to the operating performance ③. This also generates waste and emissions ④ that must be disposed of or cleaned.

Operational performance does not have to be a physical product. The product in trade is the link between producer and consumer. Also services are products. Depending on the industry, investment, material and personnel have a different weight, but the basic structure is the same. The product is delivered to the customer via the sale ⑤. The revenues will then be used to finance further value creation ⑥, and the start-up funding should also be able to be slowly repaid. Feedback from customers ⑦ should also be used to continuously improve the products.

Subsequently, the procedures ② to ⑦ repeat.


The purchase of labor can not be clearly assigned to the use or consumption. Formally, the worker sells a volume of working time. Then the work would be a commodity. However, the employer also cares about the education and training and the motivation of his workforce. In terms of content, they are more of an achievement potential. Then labor would be a commodity. The employer wants to use this commodity as intensively as possible, so exploit the work. Without work, the worker can not use his work force meaningfully. The exploited worker is thus better off than the income-free unemployed person.

The use of the production factor labor does not only take place in the immediate creation of the company's performance. This immediate value-added process is accompanied by many supporting activities. The deployment of personnel, as well as the use of money and the organization, thus accompanies the entire operational performance.


Because of the special nature of the production factor work and its widespread use, the graphic could be modified or extended as follows:


Fig. 2: operational processes

(Source: own illustration)


At the end of the 18th century, Adam Smith defined the factors of production, land, capital and labor. The capital is then exchanged for tools and materials. This distinction rather describes agricultural production. In the 19th century Karl Marx also understood the soil as part of the capital investment. At the end of the 20th century, there was a growing awareness that the role of soil should be taken by natural resources, which can not be increased. Especially in industrial production, raw materials are consumed and environmental pollution occurs. Also with this production factor must be handled so very sparingly.

In the 21st century, the realization is growing that organizational and technical knowledge is a fourth factor of production. This factor can also be increased easily. As in the nineteenth century manpower was replaced by machinery, today the use of capital and labor can be reduced with a smarter organization of production, and one can also conserve natural resources. For this, the processes and sub-processes must first be analyzed precisely and later simplified.

The identification of the individual processes and sub-processes is necessary in order to be able to constantly assess and improve them. All conscious processes are planned more or less intensively and then carried out according to this plan.

The processes of planning, the implementation of the planning and the evaluation of the results are surrounded by a control loop. The planning results in a preliminary coupling, that is an assumption about the future. After that, information systems are designed to collect actual data for comparison with the assumptions. These information systems enable sound evaluation and feedback. Successfully implemented plans, which have led to positive results, are repeated. Failures should not be repeated and mistakes should be learned to organize a success in the next attempt. These learning processes lead to a new feed forward and improve the planning.


Fig. 3: continuous improvement process

(Source: W. Müller, Investment Accounting, Financial Planning, Financial Instruments, Norderstedt 2011, page 3)

According to this philosophy, the task of business administration is the optimization of value creation via the action levels, planning-implementation-evaluation and the support with information systems and learning processes. In addition to capital and labor, the factor information can be regarded as an important component in the generation of the company's performance. Accounting has been the company's central information system for more than 500 years. With the technical possibilities of the 21st century, the database for corporate management can be greatly expanded. In addition, information gathering can be accelerated and organized cost-effectively.


If you return to the comparison with the vehicles, then accounting is the cockpit. There is a speedometer, rev counter, fuel gauge and many indicator lights. This includes the cables that report the data from the different parts of the vehicle to the cockpit. The speedometer indicates the current speed and the driver decides whether to maintain the speed, to drive faster or slower. A big coach needs more ads than a small moped. But the moped driver must get the most important information. The target group of this project are the moped riders, not the large corporations but the small entrepreneurs!