Finance:Perfect Box Theory

Perfect Box Theory is a framework that designs the organisation according to cooperative culture and assesses the business idea or plan based on the involved stakeholder's requirements and benefits. It focuses on conducting an assessment from the perspective of affected or influential stakeholders and the response of other directly connected stakeholders. The theory expects cooperation amongst the stakeholders at all times. Hence it provides the roadmap to align the benefits and contribution of each stakeholder with others. Here, the assessment practice is linked to dynamic criteria and an open-ended questionnaire. The term, Sound and More Successful Business, is coined by the theory – which talks about business with an interactive idea, a continuous improvement, a consistent relationship with the right stakeholders, an emphasised growth and a clear vision.

In short, this theory primarily addresses the importance of the involvement of every person, organisation and aspect of business at all levels. In addition, the framework also provides the phased process for alignment of cooperation through Role and Goal Synergy.

However, it is a long term approach framework based on the cooperative relationship that may require some time to create trust and invoke everyone's participation.  

Perfect Box Theory is specially developed for business management. However, it equally provides meaningful guidance to the layman for maintaining active participation in their relationship with others. For example, a goal is constituted by four structural aspects – which influence and strengthen each person's goal achievement.

Approach

Perfect Box Theory is specifically inspired by “The Stakeholders Theory” (Freeman, 1984). It is based on the Stakeholders Approach. This approach emphasises the stakeholder's involvement, which focuses on participation for all circumstances – whether they are controllable or uncontrollable. Active participation of stakeholders increases communication between each participant, and conflict resolves at an earlier stage of the problem.

Business Box (Perfect Box Theory)

Business Box

In Perfect Box Theory, four primary stakeholders are considered that are determined, responsive and influential to the business. The theory has illustrated business in the form of a box, termed as "Business Box", which is based on the importance and contribution of stakeholders in the business.

The theory explains the business and its stakeholders using the analogy of a box of fragile objects. Depending upon their requirements and placement in the business box, the respective stakeholder secures the internally dependent stakeholders and provides stability in the business by reducing the impact and damages.

Elements of Sound and More Successful Business

• An interactive idea: An idea that connects with every part of business and provides relevant benefits to everyone involved.

• A continuous improvement: An uninterrupted process that focuses on on-going upgradation and enhancement of different aspects of business without any undue effect on others.
• A consistent relationship with right stakeholders: It includes – a right selection of a concerned stakeholder for relevant activities and a consistent relationship with them at all times.
• An emphasised growth: A process which is necessary for any business to survive competition, but must be conducted in a controlled manner. Here, growth is managed to avoid unrealistic and vague expectations.
• A clear vision: A defined goal that assists in making sound, adequate and consistent decisions for the business.

Contents

Theory includes –

• Failure, which talks about Cycle of Failure and Structure of Idea
• Customer Fragility Model, which provides the benchmark for Customer Management
• Cooperation within Stakeholders, which talks about Role and Goal Synergy
• Assessment Framework, which provides the criteria and dependent variables

Cycle of Failure

The cycle of failure depicts the different aspects and their cyclical occurrence towards causing the failure.

Structure of Idea

Structure of Idea defines the process of idea designing and cultivation, which precisely provides the different components of idea formation. The components are – Belief, Impression, Intention, Plan and Thought. Few components are inactive or may not depict their direct influence on an idea. But their inexistence can affect the structure and undoubtedly execution of an idea.

Role and Goal Synergy

Every person, who is looking for benefits or satisfaction, requires to exert the same amount of contribution in the form of money, action, acceptance, ability, or inputs to do something. Unacceptance or Non-involvement is one of the main reasons behind the Role and Goal conflict. The theory provides the action plan to establish positive synergy between these two terms. Without synergy between benefits and contribution, there can be a misunderstanding about a person’s own involvement and other’s participation in achieving such benefits.

Four different stages of synergy setting, namely – Derivation, Combination, Correlativity and Complementarity, were provided in theory to maintain the balance between the role and goal of each stakeholder.

Customer Fragility Model

The Customer Fragility Model provides the fragileness of customers. The fragility of a customer is based on their needs, approach for expected solutions and relevant contribution to fulfil expectations. Needs, approach and contribution equally resemble the “Role and Goal” of a person. Theory pronounces that there is interlinking between the goal of the customer and the customer’s role to support the fulfilment of need. Additionally, customer fragility is structured by various elements of the person. A qualitative measurement approach is used for determining customer fragility.

Theory elucidates the different dimensions of needs, which are categorised as General Needs, Unidentifiable needs, and Unusual Needs.

The benchmark under the Customer Fragility Model, or Customer Fragility Benchmark, is customer persona segmentation which considers the customer fragility and qualitative weightage for different elements of fragility.

Limitation of cooperation

Sometimes, cooperation poses various risks to the involved parties. Availability of inside information and knowledge about the internal process of other involved parties is one of the main reasons behind the cooperation risk. Additionally, each party is dependent on the other, which leads to resistance for actual commitment in some cases.