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14Casalegno C. – Cerruti E. – Pellicelli M. / Economia Aziendale Online 2000 Web 4 (2009) 1-35Replacing "return on investment" with its equivalent "earnings divided by investedcapital" we obtain:Using algebra the equation becomes:⎡⎢⎣EIC⎤− COC⎥IC⎦[ COC IC]E − ×Replacing "earnings" with its equivalent "revenue minus personnel costs minussupplier costs minus depreciation" we obtain:R − PC ( personel cos ts)− SC − D − [ COC × IC]Using algebra to factor in a key people-oriented element, the number of people employed,and introducing two metrics, namely, employee productivity and average personnelcost per employee, we obtain:⎛⎜⎜ R − SC − D −[COC × IC]= ⎜−P⎜ 14444244443Employee⎝Pr oductivityPC{ PAvg.Cost / Person⎞⎟ ⎟⎟⎟⎟ ⎠PPeople employedECONOMIC PROFIT = [ EPR − ACP]PEPR is the employee productivity and ACP the average cost per person.Intangibles are embedded in the value chain, so it is not so clear what kind of intangibleis the source of profit or what specific balance of intangible and tangible assetsshould get the credit (or blame) for the results; the computation is always difficult.Having considered all these items, it is important to understand which drivers areable to engage higher potential human capital. According to The 2007 Watson WyattWorkEurope survey findings, we can talk about three top drivers: strategic decisionand leadership, communication and customer focus. Maximizing business performanceis one key element in retaining top talent, which is an important issue that challengestoday’s senior executives. This issue is strongly related to employee engagement. Programmesthat increase trust, empowerment and customer focus increase engagementand therefore confer a competitive advantage.Moreover, we also need to underscore that today the complexity of managing peopleis increasing because of the strong competition in every market, the effects of globalizationand deregulation, and the speed at which invested capital is moved around. Inthis context of worldwide economic difficulty, strategic workforce planning can help
Casalegno C. – Cerruti E. – Pellicelli M. / Economia Aziendale Online 2000 Web 4 (2009) 1-35 15organizations reduce the negative impact of workforce complexities on their businessperformance.The top management team has available, in general, a lot of choices to encouragemanagers and other employees to invest their own efforts to achieve company goals andimplement strategies; leadership, power and company culture are the three best resources– tied together – to manage and to take into account in every organization.When you want to talk about the essence of leadership, you talk about somethingtied to change; change can reshape every organizational system. Leadership is the bestmotivational lever in every organization, and companies can achieve results when leadershipprinciples are present at every organizational level.But, first of all, what is leadership? Some commentators link leadership closely withthe idea of management. Some regard the two as synonymous, others consider managementa subset of leadership. According to Burns (1978), leadership is a particularpower management approach. Being a leader is a way of behaviour aimed at achievingparticular goals; we are not speaking about personal goals, but common goals for thewhole company. Thus, leaders are particular types of power holders, though not everyholder reveals himself as a leader.Moreover, a leader can take on different behaviour; it depends on the way he wantsto achieve the company's strategic results. Leadership style can be transformational ortransactional, both of which are types of behaviour with the greatest effect on overallcompany management. Burns (1978) has studied these styles for a huge part of his carreerand Wright et. al. (1998) have given an exhaustive definition of them. When wetalk about a transactional leader we are referring (Burns, 1978) to a manager who haschosen to lead his/her followers (single person or team groups) to final results usingbenefits and reward management, or – if the work done does not satisfy him/her – punishmentfor mistakes made. People with this way of managing have followers just becauseof benefits they can gain from their own job accomplishments. In this case leadershippower not only entails valuating, correcting and training followers when their productivitydoes not hit the mark, but also planning benefits and rewards once goals areachieved.According to Wright et. al. (1998), a transformational leader is somebody who canmotivate people and team groups to achieve greater efficiency and effectiveness. Transformationalleaders focus their entire communication on planned organizational goals,whose achievement is possible only when the efforts of followers are focused on finalresults. In this way, every company member is “transformed” and becomes more engagedin achieving results because of shared goals.
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