The value of Value

It's quite difficult to talk business without mentioning Value - in fact, it's worth a capital V. Creating Value is really what a business organisation is all about, although Value can also be destroyed in many ways. In essence, an organisation takes certain actions and external consumers will determine how much Value is being created.

If an organisation is a profit maximiser, it will aim to "capture" as much as possible of the Value created for itself. Competitive pressures, and also the organisation's own decisions about sharing Value (e.g. for reasons of corporate social responsibility - CSR), will determine how much is finally captured. In some cases, the Value created can be great but the amount captured is much lower; a good example is a professional football club with high revenues from TV and a similarly high bill for players' wages.

A not-for-profit organisation, such as a charity or development project, will share Value created with its various beneficiaries, according to its mission and vision; for example, providing services and/or achieving certain social and economic targets.


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