Capturing and Delivering Value - Coursework Example

Capturing and Delivering Value Student Name: Institution Affiliation: 20th April, 2017 Introduction The perceived worth of a product that a company makes translates into what in strict terms is seen as a value. More often than not, and to a company, the value of a product is measured regarding an equivalent monetary value that was used to produce the product, plus what can measure as profit to the business. However, after creating this value in a product so that it can be used by a second person, usually, the consumer, a company has to find the appropriate buyers and sell to them this product which has a value attached to it, at the right price, so that both the buyer and producer achieve some worth out of the transaction. Business has a goal to deliver products – goods or services – to its esteemed customers, with the sole intention to satiate their needs. While this is so, the main reason for a company’s existence, besides delivering valued products to customers, is to live up to some goals as envisioned in its vision and mission statement. These goals include making profits to sustain the business, and probably help it grow beyond its size to deliver better products and capture an even bigger market in a wider area – probably, globally. While offering products to consumers, there is the need to offer a certain value to customers, which translates to profits for the business. In most cases, the business should deliver just a proportionate value so that it does not suffer losses. At the same time, a business should not deliver too much value so that it ends up in big losses. This would devastate the business, meaning it would never meet its goals as envisioned in its mission and vision statement. Also, when the business keeps a higher value than is necessary, then it may end up losing most of its customers since that would mean the business sells products at very high costs or low-value products (Sheffi, 2012). Value delivery happens at different levels. A characterization of the same happens before goods are delivered to the consumers, and after they are bought by the consumers. For instance, while manufacturing products, a business looks at the goods as a point through which some value will be added, so that consumers may, in turn, use the product to achieve utility. While doing so, the customer will have parted with some amount of equivalent value to obtain the product. While consuming or using the product, the business still delivers value regarding after-sales-service, or customer care where necessary so that the customer still benefits (Lindgreen et. al., 2012). The importance of creating and delivering value to managers is that it helps them understand what the market needs. It is the market that sustains a business, and understanding the needs of the market is a great way that may be put to use when creating value that can be delivered to customers without compromising the position of the business. Further, service-dominant logic comes in handy when managers are to understand how the market needs the value in a product to be delivered. As such, it is prudent for managers to understand that capture and delivery of value highly passes a value to both customers and stakeholders. Additionally, excellently captured and delivered value to customers grows the net worth of the business to the stakeholders so that they become financially sound. Therefore, to most managers, the capture and delivery of value means that a customer gets the value of the product, while stakeholders get financial value in return (Watson, 2002). This paper will look into theories that explain the capture and delivery of value such as the stakeholder theory and then assess how these theories could help project managers to better deliver value to products, processes, services, systems or organisations. Theories that Explain the Capture and Delivery of Value There are theories that explain the finer details of what transpires during processes of the manufacture of products to create value, and the delivery of the same products to the market, through the supply chain in what is the delivery of value. Most of these theories offer information on why managers should think of the capture and recapture of value as very critical in the day-to-day running of business. System integration, value theory, resource-based review, the project service system and the stakeholder theory will be assessed as theoretical lenses through which managers can deliver value through processes, organization, systems, service and products. System Integration Businesses use systems to reduce the time between transactions, keep records, run processes and carry out various other aspects of a business that cut down on time wasted. Generally speaking, IT has changed the way business transactions are carried out so that very many transactions can be carried out within a short period of time with very few challenges if any. This is an advantage to businesses since it saves on time, hence maximizes on profits where possible. More often than not, integrated systems mean that there is a high likelihood that a business will cut down on most human resources. Therefore, managers can use system integration as a way of increasing contact between customers and the business. R2K is an example of a software that can be critical within the organization in making it easier to carry out business (2014). System integration with consideration of how customers integrate with the business is important. While capturing customers’ data with the intention of using it to model the business processes like transactions, enterprise systems can be integrated with social media so that any data obtained through such integration becomes critical in shaping business strategy. Again, for managers in the value creation and delivery phase where decision-making is very important, there is a lot of data that may be critical in pointing out to how the strategy may be fashioned to achieve maximum results when intending to deliver value, right after it has been created (Mullich, 2013). The style above of system integration may use regular social media networks like Facebook and Twitter to collect opinions through monitored responses to issues arising from business operations. However, an even more serious way of making systems integration more effective would be through the use of technology like Web 2.0. Web 2.0 uses various tools to integrate platforms that may well be used to interact with the internal systems in a business with the external stakeholders in the form of customers. For managers, this is a great way of collecting information from one end of the supply chain – customers – and using the information to generate value and deliver it back as a product that is tailored to the customers’ liking. Service-dominant logic comes in as an idea that may be implemented using Web 2.0 (Topcu, et. al., 2007). Stakeholder Theory Most organizations are structured in such a manner that the employees with the most influence are placed high up in the management structure. This is important because more often than not, these are the employees who are the most productive and well-versed with the company policy so that they can be trusted to implement company policy from a more experienced stand-point. In doing so, they are carrying out procedures that are very instrumental in ensuring that capture and delivery of value are done with utmost professionalism (Haas et. al., 2012). In a busy office environment, there is the assignment of roles in what is seen as the delegation of duties in consideration of capability increases the efficacy of employees despite their talents. Assigning talented employees in accordance to their strengths ensures that each one of them performs their duties as best as they can, creating a situation where a value is created and delivered promptly and with the careful use of resources in the least wasteful of ways. In doing so, the final product, be it a service or a good, ends up delivering a high-quality utility to the customer who acquires it. For instance, the delegation of duties to the best engineers at a car manufacturing industry, say, Land Rover factories ensure that each one plays their role in bringing up a complete product whose utility will deliver the best service regarding quality (Clegg et. al., 2014). The consequent angle to stakeholder theory involves customers. Once employees are sufficiently capable of transferring their professionalism and managing it so that a product of the highest quality is realized, then the customer, as the next stakeholder, benefits. While it is important to note that a company or business has the moral authority to transfer the value of goods in order from biggest or most important stakeholder to the least important one, the customer is the most valued stakeholder who has to benefit in the manner of quality so that the value of the goods is just high enough to ensure utility is realized, and that the customer is satisfied so much they do not stop buying from the company (Harrison & Wicks, 2013). The other most important lot in the stakeholder theory are the investors. These are the important people who form part of the capital providers so that a company can remain relevant as an entity. While they may not be visible to the other stakeholders who are mainly consumers, they are part of the team that forms an important role as decision-makers, meaning that they form an integral part in delivering value after its creation. Stakeholders in the manner of investors stand as points of authority from which value creation is built as a policy. Business is run on policies, meaning that investors are a great cog that helps in the running of a company, through the creation of a product that delivers value (Bridoux & Stoelhorst, 2014). Traditionally, competitors may not be viewed as stakeholders in a business. However, they very much appeal to the psychology in a company through offering competition that shapes how a company creates and delivers value. First off, competitors are a threat to the business, because they are wont to deny a business the opportunity to make profits, which forms a great part of the reason there is value creation that benefits the first stakeholder – the business owners and investors. Secondly, competitors offer a business a chance to shape strategy, which is the platform through which value delivery is achieved, always through the use of strategies that are formulated to counter those used by business rivals, herein referred to as competitors (Van Puyvelde et. al., 2012). Resource-Based View Companies are run basically through utilization of resources. First off, there are various kinds of resources that a manufacturing business or a business, in general, can use to create an end product. Human resources, financial resources, and raw materials are just examples of materials that function as resources in developing products. Each and every one of these resources is characterized by nature to be scarce. Highly trained employees are rare to find, and when found, are very expensive to maintain. Finances are equally hard to obtain, and when obtained, it comes with a high premium. For instance, financial facilities like loans are expensive to come by, because most financial institutions charge high interests when lending out money. Finally, raw materials are expensive by nature, hence should be used sparingly (Taher, 2012). The most important component in production is the raw material. For instance, when producing a beverage like coffee, coffee beans must be used. The price of coffee has risen over the last few years, meaning that there is a premium price pegged on high-quality coffee beans. However, this does not mean that the manufacturing company has to keep acquiring coffee from an expensive supplier. They can still source for high-end coffee from comparatively cheaper suppliers. In effect, managers, through decisions made for the good of the business, can decide on whether the business needs to conduct an assessment of all the markets where cheaper raw materials are common. It goes without saying that most factories in developed countries source for coffee beans from cheaper sources like the ones in Africa (Barney, 2012). In making decisions that favour the business, project managers need to use this theory sparingly and very carefully since in some situations, cheaper raw materials may not necessarily translate to great quality raw materials. Quality sometimes comes at a price, and managers, especially those in charge of procuring raw materials, should use good judgment to ensure that whatever is procured meets the industry standards so that their end products do not compromise the quality of the final product (Lin & Wu, 2014). The use of cheaper raw materials may be important as a way of availing more resources for the company. When cheaper but high-quality raw materials are used, there is a lot of financial resources that are saved so that it may be used elsewhere. For managers, this is prudent so that the company may retain value for itself, instead of struggling to sell products at a higher cost to recover value regarding cash. There is a great extent of achieving some form of competitive advantage when financial resources are used prudently because firms would need to acquire financial facilities from banks. However, with a prudent use of financial resources as aforementioned, managers may get bigger budgets from stakeholders so they can use elsewhere to better the capture and delivery of value (Hunt & Davis, 2012). Value Theory There is no greater way of evaluating the importance of each stakeholder than through the lens of the value theory, as envisaged in various belief systems espoused in each stakeholder. Also, value theory may help to understand the processes through which one ends up viewing the concept of capturing and delivering value. In all, the value theory is a framework for identifying all the ways through which stakeholders are evaluated, and how the idea of capturing and delivering of value may be perceived (Fujimori, 2012). The basic concept behind the value theory suggests that everyone has a way through which they choose to view issues. However, in business, there are angles to this: While it is important that there is a general way of perceiving issues, managers must have a broader sense that encompasses the analysis of issues from a very wide perspective. This should include the collection of ideas from a broad base to reach certain conclusions. This means that there is a very high chance that such managers may easily understand the value of each customer, besides their value system (Fishman, 2013). Naturally, there is an order to which managers assign the different stakeholders in the firm. It follows that the most important stakeholders to managers are their employers. Intrinsically, managers are wired to believe that their employers are the ideal valuable stakeholders in the firm. Customers may come second. However, business demands that customers be viewed as the most important stakeholders since the business cannot survive without them (Bae et. al., 2011). When managers are capable of having a clear judgment on the correct order of the value of stakeholders, they are capable of designing systems that offer the best quality in products, hence delivering value to both the stakeholders in the business and those out of business at the market level. For instance, a manager should be able to view the investors as important stakeholders, and similarly, the customers as equally important. However, when designing processes for capturing and delivering value, they should have it in mind that the design can completely deliver value for each stakeholder without necessarily having to compromise on the importance of any of the stakeholders. Increasing the cost of a product may deliver value to investors as stakeholders, while it demeans the value of customers as stakeholders. Therefore, managers have to strike a balance so that none of these two feel as if some form of cost that disadvantages them is added onto their burden of having to rely on the business as a partner in any form – investors or customers (Pekrun & Perry, 2014). Conclusion Capturing and delivering value happens to be a very important element in the success of business. There is always a fine balance between what the firm can do to capture and deliver value, and what it chooses as a means to achieving this. Most firms would be in existent without having to go through the rigours of exercising such practices. Some businesses cannot survive without careful consideration of the theories that form the basis of capturing and delivering values through managers. This paper has analysed various theories that surround the capture and delivery of value to customers. It has further demonstrated how these said theories can be critical to managers in helping them to lay out strategies on how to capture and deliver value. The stakeholder theory, for instance, is tied to the value theory in that it helps the managers to strike a balance between all the stakeholder in a business, ranging from investors to the customers and competition, to enable them to deliver the right value to each stakeholder. This is important since the value that is delivered to, say, a customer, is different from the value that an investor will receive. While an investor will want value regarding profits (dividends), a customer needs value in terms of a high-quality product. Similarly, the business should earn profits, which is the right value for delivering high-quality products to customers. Secondly, the resource-based view helps managers to dedicate just the right amount of resources to each task so that there is a pragmatic use of resources. If for example, a task should be carried out by five skilled employees, with help from three semi-skilled ones, then the resource-based view helps managers to find out the best employees to deploy for the task so that minimum resources are used, with the best results, and within the desired time frame. System integration is a great way of running the business within by controlling how resources like data is shared among decision-makers besides the way it is used for regular purposes within a business. It can as well be used to garner data from outside systems like the social media networks and other systems like the Web 2.0 that is integrated with the internal business systems like the enterprise system, to gather data and use it to fashion value. As has been confirmed, obtaining data before producing goods is a great way of delivering better value for managers. However, there are ways through which capturing and delivery of values may be used to better production in the future. Here are some of the ways: i. Value delivery may be used to model business infrastructure. For managers, the delivery of value goes beyond the aforementioned consideration of the various stakeholders in a business. There may be need to consider how the infrastructure within can be modelled to better production so that each stakeholder can get an even better value delivered through a better infrastructure that reduces time wastage while still delivering value. In the grander scheme of things, value delivery may help in shaping the infrastructure needs of whole cities. ii. There is a critical failure by managers to link value creation with innovation. For instance, when Netflix was launched, it lowered the revenue for businesses like Blockbuster since it relied on a more integrated system using innovation to deliver value. Customers gained more value by being able to use integrated payment systems through online accounts like PayPal and Payoneer Master Card. This reduces hassles associated with having to visit physical locations to purchase or rent a movie (Michel, 2014). References Bae, K. H., Baek, J. S., Kang, J. K., & Liu, W. L. (2012). Do controlling shareholders' expropriation incentives imply a link between corporate governance and firm value? Theory and evidence. Journal of financial Economics, 105(2), 412-435. Barney, J. B. (2012). Purchasing, supply chain management and sustained competitive advantage: The relevance of resource‐based theory. Journal of supply chain management, 48(2), 3-6. Beuren, F. H., Ferreira, M. G. G., & Miguel, P. A. C. (2013). 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