What does hard evidence mean

hard and soft factors

1. Term: In corporate management, a distinction is made between hard and soft factors that determine the success of a company. Hard facts can be expressed in economic key figures such as costs, capital turnover or throughput times. One speaks of economic objectification by means of indicators. The soft factors (soft facts) include images, moods, but also knowledge and the resulting behavior (de- / motivation) as well as modes of action (support / resistance). Such factors are called soft because they cannot be represented as key figures at all or only with auxiliary indicators. Their economic relevance to action results from the power of group dynamic processes.

2. Aim: In their analytically exact representation of parameters relevant to action and decision-making, hard factors serve to make the organization measurable and controllable. If a factor is hard and can therefore be objectified, it is considered to be measurable and controllable. If a factor is soft and therefore subjective, it cannot be precisely measured analytically and, at best, influenced due to its general constitution. Since the causes of soft factors are group dynamic processes, their emergence and thus their relevance are not constant. Especially in evolutionary processes (change management, market entry ...) their relevance can be critical to success. Therefore, these factors should be included in such management processes.

3. Aspects: Accordingly, a distinction is made between management approaches and strategies that rely on hard and soft factors. This distinction becomes particularly clear in the development of the change management and change communications debate, but also in the history of ideas in marketing in business administration: The strategy based on hard factors (also referred to as e-strategy [economic value]) is based on Financial key figures (hard approach), which partly with the help of cybernetics of the first order as plan and rule theory (value management cycle) emphasizes key figure-oriented corporate management. Strategies that rely on soft factors (also known as O-strategies [organizational capability / organizational competence]) are about developing a corporate culture with adequate human capital (soft approach). Second-order cybernetics, in addition to first-order cybernetics, is used in system comparative observation theory to search for environmental parameters relevant to action and decision-making, which in the closed system theory of the company leads to the question of control skepticism.

4. Background: The distinction between hard and soft factors can be traced back to classical economics and the value-based management that is based there. She works analytically and stands in the economic theory tradition of rational choice. That is the opposite valuesmanagement of cultural values ​​of certain reference groups of an organization (in thematerial value concept). Strictly speaking, and originally, value and value management are incompatible in terms of model theory. Because originally the market equilibrium is analyzed mathematically and physically, and the model man homo oeconomicus is assumed to be the average decision-maker who obeys the perfect decision-making rationality (perfectly informed, infinitely fast, rational and autonomous decisive). With this physicalized economic theory, the sharp separation of hard and soft factors becomes zcriticized in part and instead discussed their mutual dependency (relational choice). So here is a methodological expansion of individualism to include relationalism, which among other things leads to the additional recognition of social skills (soft skills) as management skills.

4. Instruments: The Balanced Scorecard is a management system that tries to capture hard factors and, with the help of auxiliary indicators, also soft factors, by mapping and controlling the interdependencies between factors and corporate success.