Value Creation (value + creation)

Distribution by Scientific Domains
Distribution within Business, Economics, Finance and Accounting

Kinds of Value Creation

  • shareholder value creation


  • Selected Abstracts


    STRATEGY AND SHAREHOLDER VALUE CREATION: THE REAL OPTIONS FRONTIER

    JOURNAL OF APPLIED CORPORATE FINANCE, Issue 2 2000
    Martha Amram
    The current interest in real options reflects the dramatic increase in the uncertainty of the business environment. Viewed narrowly, the real options approach is the extension of financial option pricing models to the valuation of options on real (that is, nonfinancial) assets. More broadly, the real options approach is a way of thinking that helps managers formulate their strategic options,the future opportunities that are created by today's investments,while considering their likely effect on shareholder value. But if the real options framework promises to link strategy more closely to shareholder value creation, there are some major challenges on the frontier of application. In the first part of this paper, the authors tackle the question, "What is really new about real options, and how does the approach differ from other wellestablished ways to make strategic decisions under uncertainty?" This article provides a specific definition of real options that relies on the ability to track marketpriced risk. Using examples from oil exploration and pharmaceutical drug development, the authors also show how specific features of the industry and the application itself determine the usefulness of the real options approach. The second part of the paper addresses the question: Given the many differences between real and financial options, how should a real options application be framed? The authors examine the use of real options in the valuation of Internet companies to demonstrate the required judgment and tradeoffs in the framing of real options applications. The case of Webvan, an online grocer, is used to illustrate the inter-action between strategy, execution, and valuation. [source]


    Operational Improvement: The Key to Value Creation in Private Equity

    JOURNAL OF APPLIED CORPORATE FINANCE, Issue 3 2009
    Gary Matthews
    With credit tightening having reduced the availability of leverage and intensified the competition for new deals, the economic recession has caused many companies in private equity firm portfolios to under-perform. These changes are forcing the private equity firms to depend even more on their ability to improve operating performance to achieve their investment goals and generate attractive returns. But few PE firms have proved capable of achieving such improvements in portfolio companies consistently over time. In this paper, the authors discuss several ways that private equity firms use their operating expertise to drive value in their portfolio companies. They also examine the analytical framework used by some PE firms when assessing and prioritizing the many operational initiatives that could be undertaken within a newly acquired company. Part of that examination involves a detailed look at how private equity firms assemble an attractive mix of operational improvement projects in their initial 100-day plans. Finally, the authors explore one of the challenges faced by private equity firms when attempting to implement operational enhancements in newly acquired companies: bringing about change without alienating company management. The real-world application of this approach is demonstrated with a case study that shows how one private equity buyer put its operational skills into practice to help create value within a mid-sized portfolio company. [source]


    Role of Knowledge in Value Creation in Business Nets*

    JOURNAL OF MANAGEMENT STUDIES, Issue 5 2006
    Kristian Möller
    abstract This paper focuses on the role of knowledge in intentionally created business networks called nets. Nets are seen to offer firms collective benefits beyond those of a single firm or market transaction. We propose that the types of knowledge and learning required in the management of different types of business net are dependent on the value creation characteristics of the net types. Based on this we suggest a classification of three generic net types ,,current business nets', ,business renewal nets', and ,emerging new business nets', and argue that they pose different conditions for management in nets. Using this framework and integrating notions from the industrial network approach, strategic management and dynamic capabilities view, and organizational learning we make a number of observations and propositions about the role of knowledge and learning in the three types of business net. The paper contributes to the emerging theory of network management. [source]


    Superstar Effects in Deluxe Gastronomy , An Empirical Analysis of Value Creation in German Quality Restaurants

    KYKLOS INTERNATIONAL REVIEW OF SOCIAL SCIENCES, Issue 4 2009
    Thomas Ehrmann
    Summary We analyze whether superstar effects (disproportionate income effects) exist in the deep-pocket market for quality gastronomy in Germany, and what factors determine the stars' rents. In quality gastronomy, the stars can be the restaurant chefs. Building on Rosen's (1981) and Adler's (1985) central theories on star effects, we explore two potential sources of stardom. Following Rosen (1981), we test if quality differences between the chefs' performances have a direct effect on financial rewards ("direct superstar effect"). Following Adler (1985), we assess the income effect of a media presence of chefs ("classical Superstar effect"). Through this, we deal with an economic issue of general interest: does it pay more to develop your skills in your core business to perfection, or to maintain the current level of skills and invest in self-marketing? Analyzing a sample of 288 restaurants, for potential star effects by differences in quality, we find that higher quality increases chefs' revenues. Yet, revenues do not increase disproportionately, and achieving higher quality requires substantial investments in exquisite ingredients, excellent staff and prime ambience. This problem, also called the "agony of the stars", has manifested itself in the bankruptcies of European three-star restaurants in recent years. As regards potential star effects by differences in media presence, we observe a positive impact of TV appearances on financial rewards. Yet, these income effects are moderate as well, so there is neither a direct, nor a classical superstar effect in quality gastronomy. We argue that although both perfection of skills and self-marketing have similarly positive income effects, self-marketing seems both the less risky and the less stressful way to enhance income. [source]


    Value Creation Versus Value Capture: Towards a Coherent Definition of Value in Strategy

    BRITISH JOURNAL OF MANAGEMENT, Issue 1 2000
    Cliff Bowman
    Resource-based theory has tended to focus on the development and protection of valuable resources. What determines a valuable resource has received less attention. This paper addresses three related issues concerning value and valuable resources: what is value? how is it created? and who captures it? We have tried here to integrate different strands of the literature to address these questions. First, we argue that a distinction needs to be made between use value, which is subjectively assessed by customers, and exchange value, which is only realized at the point of sale. Second, we argue that the source of new use values is the labour performed by organizational members, and that firm profits can be attributed to this labour. Profit differences between competing firms derive from labour performing heterogeneously across firms. Finally, we argue that value capture is determined by the perceived power relationships between buyers and sellers. [source]


    Revisiting Shareholder Value Creation via International Joint Ventures: Examining Interactions Among Firm- and Context-Specific Variables

    CANADIAN JOURNAL OF ADMINISTRATIVE SCIENCES, Issue 2 2004
    Hemant Merchant
    This study attempts to empirically reconcile the prevalent mixed findings regarding reactions of capital markets to announcements of American firms' participation in international joint ventures (IJVs). It does so by first admitting salient contextual variables into the portfolio of firm-specific variables,heretofore mostly considered in isolation,and then modeling their collective impact on these parents' shareholder value. A cluster analysis of more than 700 equity IJVs yields findings that highlight important interactions between the two sets of variables, which better inform creation and destruction of shareholder value for IJV parents. These findings facilitate development of a conceptual framework for assessing how parents can exploit the inter-connectedness between their firm-specific and contextual domains. Thus, this study lays a foundation for generating more refined predictions about shareholder value creation via IJVs. Résumé La présente étude essaie de concilier, de façon empirique, les conclusions contradictoires, révélées par l'étude des réactions des marchés de capitaux aux annonces par les firmes américaines de leur participation aux coentreprises internationales. Elle y parvient en deux temps: premièrement, par la reconnaissance des variables contextuelles fondamentales, jusque-là surtout considérées de façon isolée, dans le portfolio des variables spécifiques aux firmes; deuxièmement, par la modélisation de leur impact collectif sur la création des valeurs pour les actionnaires des firmes impliquées dans ces coentreprises. Les conclusions tirées de l'analyse par segments de plus de 700 coentreprises boursières internationales mettent en évidence d'importantes interactions (entre les deux groupes de variables) dans la création et la destruction des valeurs pour les actionnaires des coentreprises internationales. De façon incidente, les conclusions de l'étude tracent les contours d'un cadre conceptuel permettant de montrer comment les partenaires peuvent exploiter l'interrelation entre leurs secteurs spécifiques et les domaines contextuels. En somme, l'étude jette les bases d'une meilleure capacité de prédiction dans la création des valeurs par les actionnaires, via les coentreprises internationales. [source]


    Redesigning Corporate Governance Structures and Systems for the Twenty First Century

    CORPORATE GOVERNANCE, Issue 3 2001
    Robert A.G. Monks
    How a corporation is governed has become in recent years an increasingly important element in how it is valued by the market place. McKinsey & Company in June 2000 published the results of an Investor Opinion Survey of attitudes about the corporate governance of portfolio companies. The survey gathered responses about investment intentions from over 200 institutions who together manage approximately $3.25 trillion in assets. Ranging from 17 per cent in the US and Britain to over 27 per cent in Venezuela, investors placed a specific premium on what was called "Board Governance". To put this into perspective, consider how greatly sales would have to increase, expenses be cut and margins improved to achieve a comparable impact on value. "For purposes of the survey, a well governed company is defined as having a majority of outside directors on the board with no management ties; holding formal evaluations of directors; and being responsive to investor requests for information on governance issues. In addition, directors hold significant stockholdings in the company, and a large proportion of directors' pay is in the form of stock options." This correlation of governance with market value by one of the most respected consulting companies in the world creates the foundations of a new language for management accountability. McKinsey has great credibility as a value-adding advisor to corporate managements. Governance is not a cause or a theology for McKinsey; it is an important element in the value of an enterprise. By getting the opinion of what we call Global Investors with portfolios of holdings on every continent, McKinsey has importantly impacted the cost of capital for all corporations henceforth. Admittedly, McKinsey's criteria of "board governance" are blunt. "Every organization attempting to accomplish something has to ask and answer the following question," writes Harvard Business School professor Michael C. Jensen in the introduction to his recent working paper: "What are we trying to accomplish? Or, put even more simply: When all is said and done, how do we measure better versus worse? Even more simply: How do we keep score... . I say long-term market value to recognize that it is possible for markets not to know the full implications of a firm's policies until they begin to show up.... Value creation does not mean succumbing to the vagaries of the movements in a firm's values from day to day. The market is inevitably ignorant of many of our actions and opportunities, at least in the short run...". Surprisingly little attention is paid to what we all intuitively know, that talented people are not entirely motivated by financial compensation. Directors therefore must pay special attention to creating an appropriate environment for stimulating optimum management performance. [source]


    Tailoring visual images to fit: Value creation in persuasive messages

    EUROPEAN JOURNAL OF SOCIAL PSYCHOLOGY, Issue 2 2010
    Lucia Mannetti
    The present studies aimed to extend Regulatory Fit Theory in the domain of persuasive communication by (a) using printed advertisement images without any verbal claim, instead of purely or mostly verbal messages; (b) selecting the images to fit the distinct orientations of regulatory mode rather than regulatory focus; and (c) priming regulatory mode orientation instead of relying on chronic prevalence of either locomotion or assessment orientation. We found that recipients primed with a locomotion orientation experienced fit, and were more persuaded, when exposed to "dynamic" versus "static" visual images; conversely, recipients primed with an assessment orientation experienced fit and were more persuaded when exposed to "static" versus "dynamic" images. Our findings show that the experience of fit can be induced by visual messages, resulting in positive effects in terms of attitude toward product advertisement and estimated price of advertised products. Copyright © 2010 John Wiley & Sons, Ltd. [source]


    Value creation through spin-offs: A review of the empirical evidence

    INTERNATIONAL JOURNAL OF MANAGEMENT REVIEWS, Issue 4 2009
    Chris Veld
    This paper reviews the literature on the factors that influence the wealth effects associated with the announcements of corporate spin-offs (also known as demergers). Meta-analysis is used to summarize the findings of 26 event studies on spin-off announcements. A significantly positive average abnormal return of 3.02% is found during the event window. Returns are higher for larger spin-offs, for divestments that are tax or regulatory friendly and for spin-offs that lead to an improvement of industrial focus. It is also found that spin-offs that are later completed are associated with lower abnormal returns than non-completed spin-offs. The second part of the paper overviews studies on the long-run stock price performance of spin-offs. Even though early studies find a long-run superior performance, this effect is no longer found in later studies that use more refined statistical tests. [source]


    Value creation by building an intraorganizational common frame of reference concerning project management

    PROJECT MANAGEMENT JOURNAL, Issue 3 2009
    Pernille Eskerod
    Abstract In this article, we suggest that organizations should not focus on selecting between various project management approaches, tools, or behaviors. Instead, we claim that the real benefit from project management implementations comes from the mere creation of a common frame of reference. Based on four case studies, we identify elements that enhance such a common frame of reference: (1) a common project management model, (2) common project management training, (3) common project management examinations/certifications, and (4) activities for knowledge sharing. Values created, especially when the application of the elements was mandatory, were better communication, better customer satisfaction, and easier knowledge sharing. [source]


    Corporate social responsibility in Dutch industry

    CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL MANAGEMENT, Issue 4 2004
    Jacqueline Cramer
    This article addresses the experiences gained by 19 Dutch companies with corporate social responsibility (CSR). These companies joined the programme ,From financial to sustainable profit' of the National Initiative for Sustainable Development (NIDO), which ran from May 2000 until December 2002. They focused on two issues: assessing the added value of corporate social responsibility and implementing a structured approach. The Dutch experiment showed that the companies involved were able to specify the added value of CSR by elaborating the economic performance and/or parenting advantage. Unfortunately, a third type of value creation, viz. through protecting the company's reputation, was not elaborated. Moreover, the experiment revealed that among the 19 participating companies experiences were limited in implementing a structured approach towards CSR. By exchanging experiences the companies learned from each other. Such interactive learning turned out to be a helpful support, complementary to the general CSR literature on guidelines, indicators and best practice guides. Although this literature is rapidly growing, knowledge is still lacking in structuring CSR. Copyright © 2004 John Wiley & Sons, Ltd and ERP Environment. [source]


    The Physical Context of Creativity

    CREATIVITY AND INNOVATION MANAGEMENT, Issue 2 2004
    Tore Kristensen
    Creative processes are complex and consist of sub-processes, e.g. value creation, scaffolding, imagination and materialization. Creativity takes place in a physical context, i.e. in a confined space. Such space restricts and enables the free flow of sensory experiences and proximity of other people. The confinements may make certain sensory experiences available, e.g. vision of source material, sight and sound (including noise). This framing allows certain cognitive processes and restricts others. This may induce emotions that, in turn, facilitate or reduce the enhancement of creativity. Physical space affects the well-being of people, the channels of information, the availability of knowledge tools and sets the stage for coherence and continuity, which may contribute to competitive advantages. [source]


    Creating and Justifying Research and Development Value: Scope, Scale, Skill and Social Networking of R&D

    CREATIVITY AND INNOVATION MANAGEMENT, Issue 1 2002
    Aard J. Groen
    In this paper we describe a framework for analysing the creation and justification of Research & Development. The 4S framework is developed for analysing the scope, scale, skills and social network aspects of Research & Development value. The framework is based on social system theory, a process contingency model, and recent Research & Development metrics. We present a first empirical assessment based on a workshop using the 4S framework for leveraging Research & Development. Results that assist in the assessment of value creation utilising R & D within networks are very relevant in high tech industries. The multi,dimensional process approach of this framework seems promising for understanding and managing R&D value creation, but needs further operationalisation. Case studies are described and a Dutch network on leveraging R&D has been initiated. [source]


    How Opportunities Develop in Social Entrepreneurship

    ENTREPRENEURSHIP THEORY AND PRACTICE, Issue 4 2010
    Patricia Doyle Corner
    The purpose of this article was to extend existing research on opportunity identification in the social entrepreneurship literature through empirically examining this phenomenon. We used an inductive, theory-building design that surfaced patterns in social value creation across multiple case studies. The patterns showed actors seeing a social need and prospecting ideas that could address it. Data also revealed multiple, not individual, actors, dynamically engaged in interactions that nudged an opportunity into manifestation. Also, data suggested complementarities to effectuation and rational/economic processes that are divergent theoretical approaches to the study of entrepreneurship to date. [source]


    A new direction in M&A integration: How companies find solutions to value destruction in people-based activity

    GLOBAL BUSINESS AND ORGANIZATIONAL EXCELLENCE, Issue 4 2009
    Ben de Haldevang
    We've all heard merger-and-acquisition (M&A) horror stories in which ignoring the complex human element in integration led to problems that leached away some,or much,of the deal's hoped-for value. The success stories presented here point to effective strategies for smoothly merging organizations without compromising productivity, talent and customer retention, innovation, and other sources of value creation. The author argues that integration planning and management, which too often focus narrowly on process, should also explicitly address the people-intensive aspects of planning, speed, communication, innovation, culture, and HR issues. For each of these areas, he presents actual cases in which preparation or intervention kept a postdeal integration on track and shares specific solutions and tools that can be adapted to other M&As. © 2009 Wiley Periodicals, Inc. [source]


    Technologies for value creation: an exploration of remote diagnostics systems in the manufacturing industry

    INFORMATION SYSTEMS JOURNAL, Issue 3 2008
    Katrin Jonsson
    Abstract., With firms increasingly relying on ubiquitous computing to implement major business initiatives, it is becoming ever more necessary to understand the technological aspects of business developments. This paper analyzes the use of remote diagnostics systems in the manufacturing industry and discusses the opportunities and challenges for the early adopters. It pays specific attention to the impact on business aspects such as the value creation process consisting of relationships, roles, and architecture and the value proposal consisting of a business offer and customer value. The study shows how ubiquitous computing allows manufacturers to become remote service providers while customers can either become co-creators of value or passive receivers of created value. Ubiquitous computing also creates possibilities for the manufacturing industry to design new kinds of business offers based on remote presence. Studying remote diagnostics systems shows that ubiquitous computing creates value when deployed in products, and not just in relation to individuals. Moreover, the design of the value-creation process should not be limited to the single supplier or customer organization, as ubiquitous computing applications take no notice of organizational boundaries. [source]


    Whose job is it anyway?: organizational information competencies for value creation

    INFORMATION SYSTEMS JOURNAL, Issue 4 2000
    Joe Peppard
    Abstract. Research highlights that most business managers continue to be dissatisfied with the value they perceive they are deriving from their organization's information systems investments. On examining the literature, the dominant perspective is that creating value through information systems is primarily the responsibility of the IS function. Accordingly, to address this chronic malaise, attention generally focuses on the IS function with proposed prescriptions ranging from re-skilling the IS professional through re-engineering the IS function to the ultimate sanction of outsourcing. This paper examines the problem of value creation from IS investments from an organizational as opposed to an IS functional perspective. Drawing on resource-based theory, the paper argues that the effective deployment and exploitation of information should be viewed as a ,strategic asset'. To leverage value from IS, the paper proposes that organizations must recognize and develop information competencies and that the elements of these competencies are distributed throughout the organization and not solely resident in the IS function. Through a multimethodological approach these information competencies are identified and described. The resultant competencies are then studied in an organizational context. The paper ends by drawing conclusions and articulating further research directions and opportunities [source]


    SIX CHALLENGES IN DESIGNING EQUITY-BASED PAY

    JOURNAL OF APPLIED CORPORATE FINANCE, Issue 3 2003
    Brian J. Hall
    The past two decades have seen a dramatic increase in the equitybased pay of U.S. corporate executives, an increase that has been driven almost entirely by the explosion of stock option grants. When properly designed, equity-based pay can raise corporate productivity and shareholder value by helping companies attract, motivate, and retain talented managers. But there are good reasons to question whether the current forms of U.S. equity pay are optimal. In many cases, substantial stock and option payoffs to top executives,particularly those who cashed out much of their holdings near the top of the market,appear to have come at the expense of their shareholders, generating considerable skepticism about not just executive pay practices, but the overall quality of U.S. corporate governance. At the same time, many companies that have experienced sharp stock price declines are now struggling with the problem of retaining employees holding lots of deep-underwater options. This article discusses the design of equity-based pay plans that aim to motivate sustainable, or long-run, value creation. As a first step, the author recommends the use of longer vesting periods and other requirements on executive stock and option holdings, both to limit managers' ability to "time" the market and to reduce their incentives to take shortsighted actions that increase near-term earnings at the expense of longer-term cash flow. Besides requiring "more permanent" holdings, the author also proposes a change in how stock options are issued. In place of popular "fixed value" plans that adjust the number of options awarded each year to reflect changes in the share price (and that effectively reward management for poor performance by granting more options when the price falls, and fewer when it rises), the author recommends the use of "fixed number" plans that avoid this unintended distortion of incentives. As the author also notes, there is considerable confusion about the real economic cost of options relative to stock. Part of the confusion stems, of course, from current GAAP accounting, which allows companies to report the issuance of at-the-money options as costless and so creates a bias against stock and other forms of compensation. But, coming on top of the "opportunity cost" of executive stock options to the company's shareholders, there is another, potentially significant cost of options (and, to a lesser extent, stock) that arises from the propensity of executives and employees to place a lower value on company stock and options than well-diversified outside investors. The author's conclusion is that grants of (slow-vesting) stock are likely to have at least three significant advantages over employee stock options: ,they are more highly valued by executives and employees (per dollar of cost to shareholders); ,they continue to provide reasonably strong ownership incentives and retention power, regardless of whether the stock price rises or falls, because they don't go underwater; and ,the value of such grants is much more transparent to stockholders, employees, and the press. [source]


    STRATEGY AND SHAREHOLDER VALUE CREATION: THE REAL OPTIONS FRONTIER

    JOURNAL OF APPLIED CORPORATE FINANCE, Issue 2 2000
    Martha Amram
    The current interest in real options reflects the dramatic increase in the uncertainty of the business environment. Viewed narrowly, the real options approach is the extension of financial option pricing models to the valuation of options on real (that is, nonfinancial) assets. More broadly, the real options approach is a way of thinking that helps managers formulate their strategic options,the future opportunities that are created by today's investments,while considering their likely effect on shareholder value. But if the real options framework promises to link strategy more closely to shareholder value creation, there are some major challenges on the frontier of application. In the first part of this paper, the authors tackle the question, "What is really new about real options, and how does the approach differ from other wellestablished ways to make strategic decisions under uncertainty?" This article provides a specific definition of real options that relies on the ability to track marketpriced risk. Using examples from oil exploration and pharmaceutical drug development, the authors also show how specific features of the industry and the application itself determine the usefulness of the real options approach. The second part of the paper addresses the question: Given the many differences between real and financial options, how should a real options application be framed? The authors examine the use of real options in the valuation of Internet companies to demonstrate the required judgment and tradeoffs in the framing of real options applications. The case of Webvan, an online grocer, is used to illustrate the inter-action between strategy, execution, and valuation. [source]


    Does service failure influence customer loyalty?

    JOURNAL OF CONSUMER BEHAVIOUR, Issue 3 2002
    Francis Buttle
    Abstract There is a general consensus that customer loyalty to service providers is not solely dependent upon their level of satisfaction or dissatisfaction. However, the identified antecedents of loyalty remain, at best, highly speculative. The aim of this extensive literature review is to give some understanding of the nature of customer loyalty and the antecedent effects of service dissatisfaction. The research reviewed suggests that customer loyalty is an attitudinal state, reflecting value, trust and commitment within supplier,customer relationships. Satisfaction is one of several antecedents of loyalty. A key influence on loyalty is the offer of unique value-delivering advantages not provided by competitors. Thus firms need to develop positive value-based exit barriers to achieve loyalty. When service failures occur, the recovery process is likely to have a greater impact on loyalty than the original service failure. The key to successful recoveries was found to be the customer's perception of ,fairness'. Recovery programmes must get it right first time. Customers who remain dissatisfied after a complaint has been handled are more dissatisfied than if no recovery attempt had been made. Dissatisfaction and customer satiation are major causes of a customer's exit. The solution to customer satiation is dynamic value creation. Collection and monitoring of customer data is needed for success and two-way communication is vital. Copyright © 2002 Henry Stewart Publications. [source]


    Large mergers and acquisitions of European brewing groups,event study evidence on value creation

    AGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 3 2007
    Oliver Ebneth
    Acquisitions have been the growing trend in recent years, giving brewers the opportunity to enhance their degree of internationalization and market share remarkably through diverse one-off deals. Larger brewers are faced with low prospects for volume growth in developed markets leading them to seek growth either via acquisition of other brewers or by aggressive participation in developing markets or both. This study employs event study analysis to examine 31 mergers and acquisitions among leading European brewing groups. Differences regarding the brewers' corporate success can be determined within the European peer group. The results are discussed by additionally comparing the performance of companies that experienced M&As and companies that did not. Managerial implications as well as future research propositions conclude this article. © 2007 Wiley Periodicals, Inc. Agribusiness 23: 377,406, 2007. [source]


    How Critical is Employee Orientation for Customer Relationship Management?

    JOURNAL OF MANAGEMENT STUDIES, Issue 2 2008
    Insights from a Case Study
    abstract This paper explores the interface of employee orientation and the Customer Relationship Management (CRM) process based on an in-depth case study of a leading firm in the UK automotive services sector. Employee orientation is embedded in the Organizational Culture (OC) of the firm and manifested through its key elements, notably assumptions, values, behaviours and artefacts. CRM consists of four organizational activities: strategic planning, information, value creation, and performance measurement sub-processes. Based on the case study evidence, the widely postulated link between CRM success and employee orientation is empirically supported and the mechanisms underlying this association elucidated. [source]


    Flexible design-planning of supply chain networks

    AICHE JOURNAL, Issue 7 2009
    José Miguel Laínez
    Abstract Nowadays market competition is essentially associated to supply chain (SC) improvement. Therefore, the locus of value creation has shifted to the chain network. The strategic decision of determining the optimal SC network structure plays a vital role in the later optimization of SC operations. This work focuses on the design and retrofit of SCs. Traditional approaches available in literature addressing this problem usually utilize as departing point a rigid predefined network structure which may restrict the opportunities of adding business value. Instead, a novel flexible formulation approach which translates a recipe representation to the SC environment is proposed to solve the challenging design-planning problem of SC networks. The resulting mixed integer linear programming model is aimed to achieve the best NPV as key performance metric. The potential of the presented approach is highlighted through illustrative examples of increasing complexity, where results of traditional rigid approaches and those offered by the flexible framework are compared. The implications of exploiting this potential flexibility to improve the SC performance are highlighted and are the subject of our further research work. © 2009 American Institute of Chemical Engineers AIChE J, 2009 [source]


    Strategic management of intangible assets and value drivers in R&D organizations

    R & D MANAGEMENT, Issue 2 2005
    Stephen Pike
    This paper takes a resource-based view of the R&D process. Based on the literature, we forward a theory that allows us to predict the dynamic interaction and transformation of five key resources, namely human, relational, organizational, monetary, and physical. Utilizing visualization tools allows us to test this theory on various levels in order to draw insights from the data. The output of the analysis improves the strategic understanding of an organization. In particular, it improves the understanding of how intangible resources drive the value creation in an R&D organization. Further analysis of the data allows us to identify resources that are either under utilized or over utilized, which might indicate inefficiencies in the organizational performance. [source]


    The Puzzle of Financial Reporting and Corporate Short-Termism: A Universal Ownership Perspective

    AUSTRALIAN ACCOUNTING REVIEW, Issue 4 2009
    Michael E. Drew
    This study considers the controversy surrounding financial reporting and corporate short-termism as a puzzle. The question remains as to why corporate managers and investors persist in exhibiting behaviours that trade off long-term value creation for meeting short-term financial targets. Using inter-temporal choice theory, the myopia characterising decision-making is entirely rational, given the set of incentives faced. This study views the puzzle through the prism of universal owners (pension and superannuation funds), arguing that the investment policies or ,mandates' implemented by these financial behemoths is the source of the myopic behaviour. The paper explores a range of policies that universal owners may consider implementing to ensure that the payoffs to corporate managers and investors are optimised through the pursuit of long-termism. [source]


    The Role of Short-Termism in Financial Market Crises

    AUSTRALIAN ACCOUNTING REVIEW, Issue 4 2009
    John Nesbitt
    The purpose of this paper is to examine the contribution short-termist behaviours have had in various financial market crises. The early warning signs and drivers of short-termism are investigated, as well as ways to mitigate short-termist behaviour and consequences in the future. Short-termism as defined for the purposes of this paper is the excessive focus on short-term performance, earnings and other metrics at the expense of attention being given to the development of a long-term strategy that promotes sustainable long-term value creation. [source]


    Are Friendly Acquisitions Too Bad for Shareholders and Managers?

    BRITISH JOURNAL OF MANAGEMENT, Issue S1 2006
    Friendly Acquirers, Long-Term Value Creation, Top Management Turnover in Hostile
    The well-documented failure of the majority of acquisitions to create value is often identified in popular discussion with hostile acquisitions, whereas friendly acquirers seem to get a friendly press. The relative performance of friendly and hostile acquirers therefore warrants a rigorous empirical investigation. Clear evidence of superior value creation in hostile over friendly acquisitions allows us to judge the efficacy of the market for corporate control. In this article we examine the long-term shareholder wealth performance of four types of acquirers , friendly bidder, hostile bidder, white knight and hostile bidder facing a white knight or another hostile bidder. For a sample of 519 acquisitions of UK target firms during 1983,1995, we estimated the three-year post-acquisition gains to acquirer shareholders and found that hostile acquirers deliver significantly higher shareholder value than friendly acquirers. We found that friendly acquirers with high stock-market ratings destroyed more value than hostile acquirers with a similar rating. Friendly acquirer top managers suffered greater job losses than those of hostile acquirers, perhaps paying the price for their inferior value-creation performance. Our study provides evidence of the superior value-creation performance of hostile acquirers and makes the case against takeover regulatory rules that may impede hostile takeovers. [source]


    How the Resource-based and the Dynamic Capability Views of the Firm Inform Corporate-level Strategy

    BRITISH JOURNAL OF MANAGEMENT, Issue 4 2003
    Cliff Bowman
    Summary This paper explains that the resource-based view essentially addresses issues of competitive strategy, but by integrating some arguments from its evolutionary version, the dynamic capability view, it can be extended to inform our understanding of corporate-level strategy. We concentrate on the issue of value creation from corporate centres and ask how the centre can possess or provide resources. The primary dynamic capabilities identified by Teece, Pisano and Shuen (1997) are elaborated into six distinct modes of resource creation. Each mode is considered in relation to a set of organizational design parameters. We then propose resource-creating configurations that are congruent with respect to the modes and the required states of the design parameters. We point out areas of tension that are likely to arise if corporations try to combine different modes of resource creation. We conclude that corporate centres may possess resources but must display dynamic capabilities otherwise they will destroy shareholder value. [source]


    Values that create value: socially responsible business practices in SMEs , empirical evidence from German companies

    BUSINESS ETHICS: A EUROPEAN REVIEW, Issue 1 2009
    Eva-Maria Hammann
    Socially responsible business and ethical behaviour of companies have been of interest to academia and practice for decades. But the focus has almost exclusively been on large corporations while small- and medium-sized enterprises (SME) have not received as much attention. Thus, this paper focuses on socially responsible business practices of SME entrepreneurs or owner,managers in Germany. Based on the assumption that decision-makers in SMEs are the central point where all business activities start, members of a German entrepreneurs association were approached in the course of a qualitative and quantitative survey. They were asked to assess in what way their social responsibility is expressed in specific management practices towards selected stakeholder groups. These practices in turn were assumed to result in perceived positive reactions of the respective stakeholders and subsequently to positively influence the firm's financial performance, i.e. cost reductions and increase in profits. In the paper, a research model is presented that elaborates the relationship between an SME executive's social responsibility and the value creation of a firm, i.e. whether (personal) values create (economic) value. It was found that socially responsible management practices towards employees, customers and to a lesser extent society have a positive impact on the firm and its performance. As such, values can create additional value. [source]


    Greening from the front to the back door?

    BUSINESS STRATEGY AND THE ENVIRONMENT, Issue 3 2010
    A typology of chemical, resource management services
    Abstract Though services and product,service systems have been promoted as a promising way towards more eco-efficient and sustainable societies, they have not turned into reality as expected. Chemical and resource management services are among the few operational examples. They aim to align the service provider's and customer's actions to reduce chemical usage and waste, improve supply chain management and increase resource efficiency. Arguably, they also create new business and higher profit margins compared with merely selling chemicals or handling industrial waste. Thus far they have been viewed as a single business model. In contrast, this study shows through the construction of five ideal types that the actual services and their focus vary. They range from the management of the chemical supply to operations, waste reduction, combined logistics services, process management, IT and other technologies. Consequently this affects the value creation, organization and environmental efficiencies of these services. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment. [source]