How do Organizations Create Value?

Dr. Sherry Stephenson stated that global value chains (GVCs) define how companies do business and how the world trade is structured. The governance of a supply change shows how the management production network is organized and carried out among the firms. Management will determine which firms the network operates, what will be produced and what location, and the type of quality control that needs to be followed, and management structure. 

Rachel Alexander stated the manufacturing process involves global production networking (GPNs). Brands and retailers have to ensure products made through GPNs are sustainable products. Rachel also stated that through corporate social responsibility firms can adapt continued developing practices that introduce new approaches for global trading. This could lead to broader industry-wide changes to the way industry do business. 

Companies are concerned about efficient production generating a maximum profit. The position of the organization will determine what type of value chain management will use to keep the organization structured. The organization must keep in mind both domestic and international policies when integrating into GVC. With domestic and international integration organizations must look at rules of negotiating between countries in trade agreement and decisions that could affect trade and investment flow between both training partners. 

International law is shifting. Countries that use to lead the way in shaping international law are no longer leading due to reduced global power, tarnished prestige, and rising nationalist sentiment. Countries are also addressing inequalities through economic rights and encouraging restrictive approaches to civil/political rights.

When an organization creates value within its company it places its company above its competitor. It's hard to measure and create value because it's not tangible, but the reason why a customer wants to purchase your product is one way to monitor the organization's value. 

The top three ways to create value is through creating a new product or enter a different marketing sector, create more value by making your current process more efficient so you can deliver more for the same price, and create better value by focusing on quality over quantity with current products.

There are five ways to create value:

1. Create intensity -create a product or service that delivers strength and power by going beyond what your competitors are doing and increase the level of intensity.
2. Value application – deliver or provide value to the organization customers on how to expand the organization's customer base from local to worldwide.
3. Tradition – May company fear change will hurt their businesses and feel if it's not broken don’t fix it. This mindset can hurt any organization that desires to grow to the next level. Outlining a new value can lead to improvements in customer engagement which will help the business propel to the next level.
4. Customer engagement – Organizations that are stuck in their ways can improve by paying attention to existing customers requesting and to what the customers find compelling. Using the information obtained from the existing customer can help create new, better, and improved value.
5. Value vs Revenue – the inconsistent with putting people first versus revenue first is hard for a lot of companies. The sales team should be taught to sell value versus price. When the organization's only focus is revenue the organization will struggle to survive. Putting the needs of the customer first will always bring back repeat customers which will keep the business thriving. 

Again, focused on value and putting customers first will ensure the organization's future is a success.

References:

 

Alexander, R. (2020). Emerging Roles of Lead Buyer Governance for Sustainability Across Global Production Networks. Journal of Business Ethics, 162(2), 269–290.

Stephenson, S. D. (2016, August 16). Who Governs Global Value Chains? Retrieved from Council on Foreign Relations: https://www.cfr.org/blog/who-governs-global-value-chains

How international law is being reshaped and the challenges it faces. (2018, July 25). Retrieved from World Economic Forum: https://www.weforum.org/agenda/2018/07/how-international-law-is-being-reshaped-and-the-challenges-it-faces/