Hermeneutics of Business Management Constructs

Hermeneutics of Business Management Constructs
Information Content of Operational and Financial Performance

Abstract

This article introduces a theoretical-empirical discussion on the hermeneutics of modeling constructs and terminologies used in operational performance and financial performance analysis, in the business context. The literature documents that hermeneutics was initially used in religious texts and later embraced by areas of knowledge such as philosophy, sociology, law, and more recently economics to assist in the understanding of informational content in a technical domain. 

The constructs are specified by equations with quantitative content to calculate the quanta of the degree of operational leverage (DOL) and liquidity indicators that measure nominal and effective payment capacities, using sample data from companies listed on B3, from the periods 2000 to 2015 and 2007 to 2017. The results obtained are relevant to assist researchers, managers, and users of information content on operational and financial performance, as well as for business management literature.

Key words: Operational performance, Financial performance, Performance hermeneutics, Degree of operational leverage, Operational break-even point.