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Business value

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In management, business value is an informal term that includes all forms of value that determine the health and well-being of the firm in the long-run. Business value expands concept of value of the firm beyond economic value (also known as economic profit, Economic value added, and Shareholder value) to include other forms of value such as employee value, customer value, supplier value, channel partner value, alliance partner value, managerial value, and societal value. Many of these forms of value are not directly measured in monetary terms.

Business value often embraces intangible assets not necessarily attributable to any stakeholder group. Examples include intellectual capital and a firm's business model. The Balanced scorecard methodology is one of the most popular methods for measuring and managing business value.

Contents[hide] * 1 Philosophy * 2 History * 3 Components of Business Value * 3.1 Shareholder Value * 3.2 Customer Value * 3.3 Employee Value * 3.4 Channel Partner Value * 3.5 Supplier Value * 3.6 Managerial Value * 3.7 Societal Value * 4 Strategies for Creating Business Value * 4.1 Business Value of Information Technology * 5 Criticisms * 6 See also |

[edit] Philosophy

The concept of business value aligned with the theory that a firm is best viewed as a network of relationships both internal and external. These networks are sometimes called a Value network or Value chain. Each node in the network could be a stakeholder group, a resource, an organization, end-consumers, interest groups, regulators, or the environment itself. In a Value network, value creation is viewed as a collaborative, creative, synergistic processes rather than purely mechanistic or a result of command-and-control.

If the firm is viewed as a network of value creating entities, then the question becomes how does each node in the network...