Seeing Innovative Enterprise as an Energy Dissipating System
During a Consumer Product Interaction (CPI) it is the relationship of perceived value with the price of goods that determines whether a sale event will occur. We can now propose a means to interpret the behaviour an innovative enterprise based upon on an equivalence of enterprise activity with the mechanics of the viscoelastic material.
|Typically, models of viscoelastic behaviour are constructed from elemental elastic springs and viscous dashpots and their configuration and individual properties of stiffness and viscosity are set to simulate a specific balance of energy storage and dissipation. The figure here shows the combination of springs and dashpots in the Standard Linear Viscoelastic Solid.|
|A stochastic model of a viscoelastic material can replicate precisely the mechanical behaviour of the above standard linear viscoelastic solid. In this stochastic alternative the yellow bound elements fail when the energy in the connected spring reaches a critical threshold. In the standard viscoelastic solid, energy dissipation is a continuous process. The stochastic alternative is therefore better suited for use in the commercial domain to simulate the sale events that comprise the discrete transactions of an enterprise (see the CPI page for further background).|
In the innovative enterprise, investment is considered as the equivalent source of the energy that creates value, which is conserved in the products, services and systems of the organisation. Quintessentially, enterprise investment in innovation is dedicated to the creation of favourable CPIs, raising the Value Surface whereupon a sale-event will occur and income will be remunerated to the enterprise in exchange for the newly purchased products.
If the innovative endeavours of the enterprise are deployed and “stored” as a potential in value created, then the equivalent of energy dissipation is assumed to occur through the sale of the company products. In this way, the viscoelastic analysis provides a means to uncouple the Innovative and Replicative activities that are the two fundamental components of the Labour Theory of Value Creation.
In this way we are able to develop an analogy with the deformation of a viscoelastic material and the elevation of a product Value Surface by an innovative enterprise. This enables the analysis of the enterprise performance as an energy dissipating physical system.