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Market growth: Think before lowering the prices to grow

Price Elasticity of demand measures the responsiveness of demand to a change in the price of the product. Alfred Marshall first developed it. From our point of view this is one of the most believed fallacies in economic knowledge, because there is no direct dependence between these variables.

The price elasticity of demand is calculated by considering the percentage change in demand and dividing it by the percentage change in price.

But this relation is real only if there is no change in the perceived value of the product.

We consider the traditional theory an explanation of a particular situation which can not be considered a law.

Considering the Unicist Logical Approach the elasticity of demand, analyzed from the point of view of the supplier, depends on the price and the perceived value of products.

The sole fact of a product being used changes its value. Therefore it is necessary to understand that the “price elasticity of demand” depends on the price and the subjective value that sustains the price. The price elasticity occurs only within the fuzzy set described and defined by the value-price relation.

Unicist Press Committee

NOTE: The Unicist Research Institute was the pioneer in using the unicist logical approach in complexity science research and became a private global decentralized leading research organization in the field of human adaptive systems. It has an academic arm and a business arm.
https://www.unicist.net/financials/wp-content/uploads/2016/03/turi.pdf


Discovery of the Nature of Decision Making

The discovery of the Concept of Decision Making opened the possibilities for increasing the accuracy of this process by introducing the essential aspects that drive decision making processes: the objective aspects, the subjective aspects, the reasonable groundings and the ethical justifications.

About Foundations

Foundations are reasonable, understandable and provable arguments. Fallacy avoidance is ensured when foundations are included in a decision making process. That is why foundations are basic in decision making.

Decision MakingFoundations avoid decisions when the end justifies the means. Foundations establish the reasonable limits of what can be decided.

There are several conditions that have to be given when making a grounded decision.

Foundations must be reasonable: that means that the nature of a reality needs to be described in a reasonable way.

Foundations must be provable: which means that they have to be able to be proven directly or through their materialistic aspects. The nature of a reality can only be proven through forecasting its materialistic evolution.

Foundations must be understandable: which means that an individual can only participate in a decision process if s/he understands the nature of the decision.

Decision Making Segments

Empiric decisions

It is the decision that is basically based on provable groundings. Empiric decision making uses all the empirical tools to sustain the validity of what is being decided (Statistics, experiences, pilot tests, etc). Empiric decisions are put into action based on economic justifications with the limits of subjective justifications.

Logical decisions

Logical decision making is based on the capacity of understanding and reasoning the arguments that sustain the decision making process.

Logical decision making processes use explicit or implicit models to analyze reality in order to make things happen. Logical decision making processes are put into action based on subjective justifications and are sustained by the economic justification of what is being decided.

Subjective decisions

Subjective decision making is based on the ethical and subjective justification of the individual who is deciding. Although the materialistic decision making is included, it is limited by the subjective boundaries of the individual.

Subjective decisions dominantly use feelings, intuition, beliefs, convictions and personal goals as drivers. Subjective decision making processes are put into action based on logical groundings and are sustained by empiric validation.

Materialistic decisions

Materialistic decision making is based on the ethical and materialistic justifications driven by the needs of deciders. Materialistic decisions have a high level of objectivity in order to build a bridge between the objective needs of the environment and the individual.

Objective decisions are based on measurable facts, objective relations between values, benefits and costs and the need to grow of all participants. They are put into action based on empirical groundings and sustained by logical validation.

Diana Belohlavek

NOTE: The Unicist Research Institute was the pioneer in using the unicist logical approach in complexity science research and became a private global decentralized leading research organization in the field of human adaptive systems. It has an academic arm and a business arm.
https://www.unicist.net/financials/wp-content/uploads/2015/11/turi.pdf


Unicist Theory: The Fundamental Analysis is back in the Banking Business

The past and the future are symmetric when nothing changes in an environment. But the speed of technological evolution increased the speed of changes in the market making evident that the past and the future are essentially asymmetric. In this scenario, fundamental analysis is the way to deal with business knowledge when a market evolves.

Fundamental analysis applied to financial decisions was born as a conceptual approach to businesses but was transformed into a meaningless operational approach.

The Unicist Theory made the development of the fundamentals of businesses possible that allowed managing their concepts. This made the integration of fundamental knowledge and technical knowledge possible, which allowed building reliable knowledge for decision making.

The Basics: Fundamental Analysis & Technical Analysis

Complex problem solving requires having the concept that describes the nature of the solution, the actions that need to be implemented to expand the existing boundaries of the problem and the technical knowledge to develop the minimum strategy to produce results. Concepts can be apprehended when the fundamentals of the solution have been integrated.

Knowledge Acquisition

Fundamental knowledge without technical knowledge fosters “movement fallacies”. Technical knowledge without fundamental knowledge fosters “inaction fallacies”.

It has to be considered that the intrinsic structures of fundamental knowledge and of technical knowledge are opposite to each other, but their effects are complementary to build a solution.

That is why only people who can deal with the integration of these oppositions can apprehend concepts. This is the case of the universal apparent dichotomy of yin and yang.

The Unicist Theory, based on the discovery of the ontogenetic intelligence of nature, allowed developing the unicist ontological structure of fundamentals, which made fundamental analysis “resurrect from the ashes”.

Fundamental analysis is supposed to deal with the drivers of the nature of any entity but was transformed, probably influenced by technical analysis, into an analytic approach to standardized indicators.

The Unicist Theory provided the framework to research and discover the fundamentals of an entity and defined the structure of their integration.

The symbol of Yin and Yang, representing the TAO, necessarily emulates the structure of the ontogenetic intelligence of nature and is homologous with the Unicist Logic. If you are not aware of the scientific use of the TAO, we recommend reading the book “Tao of Physics” by Fritjof Capra.

Fundamentals are the elements that define the functionality of an entity.

They define the structure of an entity´s unicist ontology and allow building its ontogenetic map.

Fundamental analysis is the approach that defines the limits of the possibilities of the evolution of a given reality.

Fundamentals define the boundaries implicit in the functionality of a given reality.

Technical analysis deals with the cause-effect relation between “variables” that have been identified making a systemic compromise.

The discovery of the unicist ontology of evolution and the structure of concepts that regulate the evolution of living beings and their deeds established the structure for fundamental analysis integrating it with technical analysis in order to develop reliable knowledge.

Knowledge of Adaptive Systems

Technical knowledge is popular because it is based on dualistic logic which is functional to the use of “binary neurons”. Fundamental knowledge requires accessing a double dialectical logic which requires an action-reflection-action process. That is why fundamental knowledge is associated with wisdom.

The purpose of a knowledge acquisition process is to obtain reliable knowledge.

Reliable knowledge is necessary when individuals are willing to ensure a minimum strategy or are exposed to uncertain or risky environments.

In everyday activities only operational knowledge is required.

This ontology is a final synthesis of the use of fundamental and technical analysis in the world of economic, social and business behavior.

Fundamentals describe the ontology of a given reality considered as a unified field. Technical analysis describes the cause-effect relations of a reality considered as a systemic object.

When working in a known context there is only need for feedback (operational analysis), an analytic approach and intuitive / rational decision making.

Knowledge Acquisition

Technical Analysis and Fundamental Analysis are intrinsically opposite approaches for knowledge acquisition, but they are operational complements when reliable knowledge needs to be acquired. The natural pathway to knowledge acquisition begins by accessing the fundamentals, that define “what” is being done, and continues with the technical knowledge that defines “how” the operational solution will be achieved.

Technical analysis provides sufficient information and the necessary cause-effect groundings to make decisions.

When the context is uncertain the understanding of fundamentals is necessary.

Fundamentals are defined by the concepts that regulate the evolution of a fact.

Validation processes naturally degrade into fallacies when they do not include falsification processes.

Validation implies a non-destructive test and falsification is a destructive test measuring the accuracy and limits of a knowledge.

When a reliable knowledge is required to deal with minimum strategies, risks or uncertainty, the integration of technical and fundamental analysis is required.

The Business Intelligence Strategy

The driver of knowledge acquisition is the need for groundings in order to achieve a reliable knowledge to make decisions. Groundings are necessary when dealing with complexity (i.e. minimum strategies), risk or uncertainty.

The minimum strategy is given by technical analysis to provide the necessary cause-effect knowledge. The maximal strategy to influence the environment is given by the knowledge of the fundamentals.

The catalyst to accelerate the building of reliable knowledge with a minimum strategy is conceptual knowledge. Conceptual knowledge establishes the secure limits of cause-effect knowledge.

Fundamental analysis and technical analysis provide the operational structure to achieve the objective of having reliable knowledge to make decisions.

When technical analysis is not integrated with fundamental analysis it naturally derives into analogical/hypothetical knowledge. When reliable knowledge is needed both approaches must be integrated.

Synthesis

Fundamental Analysis

Fundamental analysis is the approach that defines the limits of the possibilities of the evolution of a given reality. Fundamentals define the boundaries implicit in the functionality of that given reality.

Although adaptive systems and complex systems have open boundaries, they can only be managed when limits have been defined.

Defining limits based on the fundamentals of a given reality implies dealing with its nature and accepting its evolution laws. In the short or the long run the evolution of a given reality will drive towards its nature.

Fundamental analysis provides the tools to describe the nature of a reality in order to forecast its evolution. Evolution can be inhibited and catalyzed by human actions; but it cannot be changed.

Technical Analysis

Technical analysis deals with the cause-effect relation between “variables” that have been identified by making a systemic compromise.

In order to be able to manage a reality in everyday actions it is necessary to define it with systemic tools.

Systemic tools are based on cause-effect relations and therefore the result of transforming a complex reality into a simple system downgrades the possibilities of success. In technical analysis success becomes probabilistic.

Fundamental analysis defines the possibilities (0 or 1) and technical analysis defines the probabilities (from 0 to 1).

Fundamental analysis has been downgraded during the last 30 years. As there were no objective tools to approach it, it was considered as the “subjective” aspects of technical analysis.

The discovery of the unicist ontology of evolution and the structure of the concept that regulate the evolution of living beings and their deeds, established the structure for fundamental analysis integrating it with technical analysis in order to develop reliable knowledge.

Peter Belohlavek

NOTE: The Unicist Research Institute was the pioneer in using the unicist logical approach in complexity science research and became a private global decentralized leading research organization in the field of human adaptive systems. It has an academic arm and a business arm.
https://www.unicist.net/financials/wp-content/uploads/2015/09/turi.pdf


Pilot testing: The core of a pragmatic approach to business

Doers are natural users of pilot tests because they provide the security that what they are doing will work.

Pilot testing implies testing a functionality and requires a precise design of the tests. The “trial and error” applications are not pilot tests. Pilot tests must include both destructive and non destructive tests.

Pilot tests are the drivers of the unicist reflection processes. Pilot tests have two objectives:

  1. Destructive Testing
  2. Non-destructive Testing

1) Destructive Testing

Falsification, in the field of complex problems, implies finding the limits of the validity of a given knowledge. To do so, it is necessary to develop experiences in homologous fields until the limits of validity are found.

Two elements are homologous when they have the same “nature”. A whale and a dog (an extreme example) are homologous if they are considered as mammals. A dollar and a yen are homologous considering that they are both money.

2) Non-destructive testing

Validation implies the factual confirmation of the validity of knowledge. Validation is achieved when knowledge suffices to exert influence on a reality in a predictable way.

The validation process is homologous to a non-destructive test in the field of material research. Validation implies cause-effect relations. Therefore, validation can only be applied to a simplified field of a complex reality.

Conclusion

Pilot tests must include both non-destructive and destructive tests. The application of destructive tests requires being aware of the concepts of the realities where this test is applied.

Knowledge is secure when its validity and its limits were found. Exceptions to this rule are universal natural laws which are “universally homologous”.

Diego Belohlavek

NOTE: The Unicist Research Institute was the pioneer in complexity science research and became a private global decentralized world-class research organization in the field of human adaptive systems. http://www.unicist.org


Unicist Logical Approach: Survival guerrilla confrontation

The survival guerrilla confrontation happens between most of the small organizations, entrepreneurs and professionals who have not developed a brand or a stable space in a market.

Survival Guerrilla ConfrontationThe survival guerrilla confrontation occurs beyond the ethics of a market. Materialistic survival is all what counts in this strategy.

The survival guerrilla confrontation occurs beyond the ethics of a market. Materialistic survival is all what counts in this strategy.

Since what counts are only material things, to be able to survive is the most important feature in this confrontation.

In this case, the marginal participants have two different ways to survive:

  1. Attacking innovators
  2. Attacking “retarded” competitors

There are no rules in these confrontations and they are common in the marginal small business segment.  Those who are able to survive having a competitive product or service become competitors of the market.

In underdeveloped countries, survival guerrilla confrontations prevail in the market and they legitimate market uncertainty. In developed countries they represent the marginal sectors of the economy.

The losers of this survival guerrilla confrontation disappear.

Unicist Press Committee

NOTE: The Unicist Research Institute was the pioneer in complexity science research and became a private global decentralized leading research organization in the field of human adaptive systems. http://www.unicist.org


Unicist Fundamental Analysis applied to Businesses

Unicist fundamental analysis is an approach to diagnose business situations and possible evolutions. Dealing with businesses as unified fields is extremely abstract and requires defining their fundamentals based on secondary information.

There is no possibility to measure most of the fundamentals in a direct way.

The unicist business strategy scorecard

The unicist scorecard is an objective strategy validation system. Its purpose is to validate the functionality of business action plans. It is integrated by a Business Marketplace Index (BMI), a Business Credibility Index (BCI) and a Business Growth Index (BGI).

The integration of these indexes defines the possibility and probability to achieve the goals proposed in a strategy.

These indexes are built on objective information. Based on their origin, the information included can be classified in:

  1. Quantitative (hard) information
  2. Quantitative perceptions
  3. Quantified opinions

The Unicist Scorecard is a complementary concept to the Balanced Scorecard. While the Balanced Scorecard is a bottom-up tool to approach the execution of strategies, the Unicist Scorecard is a top-down tool to sustain the building of strategies.

Unicist Press Committee

NOTE: The Unicist Research Institute was the pioneer in complexity science research and became a private global decentralized world-class research organization in the field of human adaptive systems. http://www.unicist.org


Context for Business Virus Multiplication – Part V

Anticoncept of the Object Driven Organization

The objective of viruses is to multiply in order to facilitate the achievement of the personal goals. Virus multiplication needs a context.

The context of virus multiplication is the existence of all or some aspects of the anti-concept of object driven organization.

It implies that there has to be an organization with a weak immune system.

Organizations with weak immune systems have the following characteristics:

  1. They are task driven
  2. They have analogical and common sense procedures
  3. They have verbal and subjective action guides
  4. They are based on experience driven activities

The Anti-concept of the Unicist Object Driven Organization

There are people who need to approach reality based on their subjective experience. The object driven organization cannot be used when the minimum strategy of the users is based on experience based intuitive common sense procedures and subjective (personal) action guides.

In this case processes are based on task orientation which is guided by the previously mentioned subjective experience.

In the following lines you will find a short description of the organizations in which the object driven organization cannot work.

Goodwill dependant

The object driven organization is a threat when the goodwill of the members of an organization is the driver for work.

Directive dependant

The object driven organization exceeds the acceptable responsibility level when people prefer to follow personal instructions instead assuming the responsibility of processes.

Leadership dependant

The object driven organization diminishes the image of leaders when those who lead need to exert power within the organization.

Benchmarks dependant

The object driven organization is a utopia when the members of organizations are used to “copying and pasting” the organizational processes of others.

Diego Belohlavek

NOTE: The Unicist Research Institute was the pioneer in using the unicist logical approach in complexity science research and became a private global decentralized leading research organization in the field of human adaptive systems. It has an academic arm and a business arm. https://www.unicist.net/financials/wp-content/uploads/2013/11/turi-1.pdf


How do Business Viruses Work? – Part II

Businesses are killed by business viruses that cannot be neutralized by the immune system because the company has not been institutionalized.

Institutional VirusesInstitutionalization implies, among other aspects, the building of an immune system to neutralize and eliminate business viruses.

Viruses are installed in organizations when the personal goals of their members prevail over the goals of the group in the case of entrepreneurs and of the mission and vision of institutions.

Viruses can be cured or palliated. When they are cured they strengthen the company and the immune system of the company.

When they are palliated but not cured they generate a chronic syndrome in the company.

Chronic syndromes of companies are considered as characteristics by butterfly companies and by those members of institutions that despite the fact that they are working in such institutions, they do not “belong” to them.

Diego Belohlavek

NOTE: The Unicist Research Institute was the pioneer in using the unicist logical approach in complexity science research and became a private global decentralized leading research organization in the field of human adaptive systems. It has an academic arm and a business arm. https://www.unicist.net/financials/wp-content/uploads/2013/08/turi.pdf


The Unicist Approach to Business Modeling

Business models were hypothetical structures that defined a business before the Unicist Approach was applied to Corporate Finances. The probability of success of this approach was uncertain and produced too many failures in start-up businesses.

The Unicist Approach provided a structural approach to business modeling using the ontogenetic maps of businesses and their markets in order to design secure business models including the strategies and the architectures to make them happen.

“This research was triggered by the need of defining the necessary structure to introduce reliable simplicity in business management. Business decisions become simple when their elements are emulated in the mind of the decider.

Simplicity implies that what is being done is necessary, evidently possible and the cause-effect relations are manageable. The unicist hyperrealist model allows developing the business models that simplify the business world.

Business Models are developed to deal with the future of businesses. The future does not exist today, but it can be “built” making inferences based on the knowledge of the ontological structure of the unified field of the business.

Unicist Hyperrealism provides a logical, reasonable, understandable and provable structure and the necessary business objects to develop the processes to transform the hyperreality that is implicit in any business model into results.

The emulation of reality is a hyperrealistic construction. A business model is, by definition, a hyperreality. Unicist hyperrealism becomes functional when the unified field of a business has been envisioned in its oneness, including the operational aspects that allow achieving the established goals.” 

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NOTE: The Unicist Research Institute was the pioneer in complexity science research and became a global decentralized world-class research organization in the field of human adaptive systems. https://www.unicist.net/financials/wp-content/uploads/2012/04/turi.pdf