mwylcxca97
New member
Have you ever seen anyone translate Einstein's E=mc[sup]2[/sup] formula into an economic formula?
E = market capitalization = C
m = number of workers = w
c = average worker productivity = p
2 = strategic alignment = s
C = (wp)[sup]s[/sup]
^ just indicates it's a power not a multiplier
So, Microsoft:
C = $1 Trillion (1,000,000M recent market capitalization)
w = 0.1 Million (100,000 employees)
p = 50 (software developers = fifty times the productivity of average workers)
Applying the formula, we get:
$1,000,000M=(0.1M*50=5M)[sup]s[/sup]
Solving for s we get s = 8.6
If s was less than 1, then the strategy would be said to be poor as it is wasting productive workers.
An s that is much larger than 1 indicates strategic alignment and thus effective use of resources.
In this case example, Microsoft is doing very well.
What do you think? Is this trivial?
Note, it also works at the country level.
E = market capitalization = C
m = number of workers = w
c = average worker productivity = p
2 = strategic alignment = s
C = (wp)[sup]s[/sup]
^ just indicates it's a power not a multiplier
So, Microsoft:
C = $1 Trillion (1,000,000M recent market capitalization)
w = 0.1 Million (100,000 employees)
p = 50 (software developers = fifty times the productivity of average workers)
Applying the formula, we get:
$1,000,000M=(0.1M*50=5M)[sup]s[/sup]
Solving for s we get s = 8.6
If s was less than 1, then the strategy would be said to be poor as it is wasting productive workers.
An s that is much larger than 1 indicates strategic alignment and thus effective use of resources.
In this case example, Microsoft is doing very well.
What do you think? Is this trivial?
Note, it also works at the country level.