Управленческое консультирование (Jun 2018)
Recommendations on Implementing the Model of Business Reputation (Goodwill) Management at the Industrial Enterprises
Abstract
The problem of effective management of the intangible assets is quite serious in the circumstances when the rapid information flow about the functioning of any company (industrial enterprise) may alter its market value quite fast. Chief among the intangible assets is business entity’s reputation that is manifested as goodwill in various cases on the entity’s balance sheet. The system of managing business reputation created by the author must be transpired into the mission, tasks and KPIs of the management team in order to both improve the reputation and increase the market value of the entity. Materials & Methods: the holistic model of the quantitative management of the enterprise’s reputation (goodwill) developed by the author includes: 1) managing of the reputation by influencing the structure of value added (profit, amortization and salary); 2) managing of the enterprise’s business reputation via influencing the structure of capital (whereas π1 — is the ratio of current assets to total assets and π2 — the indicator of the enterprise’s cover with the own and long term credits and 3) managing of goodwill based on the rating valuation utilizing the financial coefficients. This model of the quantitative valuation of goodwill carries scientific value and is the product of author’s long term research. In the work the author also presents the organizational chart of carrying out calculations to manage business reputation of the enterprise with the detailed description of five steps for management in the public company (from collection and preparation of data about market value of the company and its goodwill to confirmation of the action plan with the participants of the process and enterprise’s top officials to manage goodwill in the long-term).Results: the author describes in detail management actions targeted at enhancing the business reputation depending on the value added characteristics and on the capital structure, namely decreasing or increasing of salaries; increasing or decreasing the value of amortization; increasing or decreasing the size of current assets or short term debt). The author also highlights potential conflicts among various departments of the enterprise while managing the business reputation and outlines potential solutions to these conflicts through the creation of the formalized internal system of mitigation and reaching the agreement.Discussion & Conclusions: the result of the conducted research is the adaptation of a unique model of its quantitative valuation of business reputation with its subsequent management to enhance market value of the whole company via increase in value added and improvement of the capital sctructure.
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