creating value for stakeholders Flashcards
value
conveys benefit to an entity
value creation
- through business model
- inputs from capitals –> transformed through business activities/ interactions –> produces outputs/ outcomes –> create/destroy value
role of business
- satisfy needs/wants with products
- jobs and income
- pay taxes to fund gov spending
- innovation, efficiency, progress
principles of value
- created within context, enviro, time
- financial/non-financial
- from tangible/intangible assets
- from private/public resources
- requires innovation
key principle
corporate values, beliefs, culture influence how, whether and what type of value is created
shareholder primacy
- main goal to maximise shareholder value
- ceo agent for shareholders
- role of government to tackle social issues
- pie-splitting mentality
corporate social responsibility
management concept where companies integrate social/ environmental concerns in business operations/interactions with stakeholders
grow the pie
ingrained in business where ultimate goal is to create value for society and not take any away from other stakeholders
dimensions of gtp
- multiplication in social benefits; $1 spent = $1 value?
- comparative advantage; $1 spent create more value than spent by others?
- materiality; benefit for material stakeholders?
primary activities
directly concerned with the creation/delivery of a product
5 primary activities
- inbound logistics
- operations
- outbound logistics
- marketing/sales
- service
inbound logistics
- receiving, storing, distributing inputs of product
- material handling, stock control, transport etc
operations
- transforms inputs into final product
- machining, packaging, assembly, testing etc
outbound logistics
- collecting, storing, distributing product to customers
- warehousing, material handling, distribution etc
marketing/sales
- how consumers are made aware of product and are able to purchase it
- sales administration, advertising, selling
service
activities that enhance/maintain value of product
- installation, repair, training etc
support activities
necessary for/improve effectiveness/efficiency of primary activities
4 support activities
- procurement
- technology development
- HR management
- firm infrastructure
procurement
- acquiring various resource inputs to primary activities
- negotiating prices, machinery, buildings, purchasing inputs
tech development
- concerned directly with product (R&D, product design)
- or processes (process development)
- or particular resource (raw material improvements)
HR management
- recruiting, managing, training, developing, and rewarding people within organisation
firm infrastructure
- formal systems of planning, finance, quality control, info management, and structure of organisation
value system
- wider value system of different interacting organisations and their individual value chains
- outsourcing to specialise
