Value creation, appropriation, and distribution

The following article places emphasis on value creation as well as its appropriation and distribution and how firms affect economic inequality within society. Value is an important component to how firms create wealth. The interaction of government, households and firms even in a global context affects how wealth is created. Firms can contribute to social economic inequality through their practices and this paper focuses on other aspects of value that also affect the global value chain. This is a varied take which essentially places emphasis on how firms contribute to socio-economic inequality and other factors affecting the different aspects of value in the chain.

The motivations behind a firm’s operations are varied and are meant to show just how significant it can be when corporate governance is not effectively established. Firms are limited by the laws of the lands in which they operate and when interests such as wealth maximization compete with value distribution then internal machinations can upend the established order. It is a way in which firms can negatively contribute to socio-economic inequality and enhance the disparities witnessed. Many firms operate on their interests which means that laws and corporate governance play a major role in ensuring that this does not interfere with the rest of society. In a global context is doubly important.

The article effectively provides clarity on the impact of the firm while showing how corporate governance has a major role in deciding the way value will move within the global value chain. It allows for a review of the firm and how laws can come into play to balance out any socio-economic aspects that these firms interfere with.

Bapuji, H., Husted, B. W., Lu, J., & Mir, R. (2018). Value creation, appropriation, and distribution: How firms contribute to societal economic inequality. Business &     Society, 57(6), 983-1009. Retrieved from: http://www.freemanagementresources.com 

Literature Review on organizational structure, management, leadership, economics, government, law, value creation, and career skills

Literature Review on organizational structure, management, leadership, economics, government, law, value creation, and career skills

Introduction

Developing a literature review ensures that many sources are compared and contrasted for the best plan of action or strategic plan. Cross checking with many different sources ensures that the work is of top quality and leaves no gaps in knowledge. Inductive reasoning was applied in order to forecast the most likely outcome out of the different sources of material found in regards to organizational performance, value creation and career skills management coming up with solutions to commonly found problems in organizations.

Roles that structure, management, and leadership play in organizational performance.

            Organizational performance must be ensured within an organization through structure and management. Using transformational methods of management, in which a leader or manager interacts with the employees in a continuous work setting has been found to have a positive effect in organizational performance versus a transactional style of management where a manager or leader leverages rewards and punishment (Spahr, 2014)as a method to drive organizational performance (Felfe & Schyns, 2004). Transactional leadership is essentially a way of telling people what to do, rather than sell them on what to do through encouragement and incentives (Spahr, 2014). Implementing methods of information management are beneficial within a virtual organization as it allows for the documentation of performance and ensures that all metrics are being met in an organizational level (Strader, 1998).

            Essentially, coming up with ways to motivate employees through transformational, rather than transactional management can help drive performance. Ensuring that methods of management are right for the type of organization can also help increase performance and create a better environment for everyone involved.

Economics, government, and law affect value creation in the global context.

            Creating value is a difficult part of business management; daily businesses struggle with creating differentiators or value added services to their business to keep their clients. Ensuring that the clients have the best experience possible, that the businesses have a differentiator and that it provides benefits to the clients are some of the things that an organization can do to ensure that the customers see value in the products or services that are being provided to them (Rocca & Snehota, 2014). In addition, value creation can be seen in things such as, management of strategies and goals, financial measures and waste eliminators which lead to better organizational performance overall (Hillstrom, 2004). Essentially, providing a manner for improvement overall and ensuring that growth occurs over a long-term basis (Hindle, 2009).

Career skills in the field of business and management

            Guidance and training in a business environment has been found to increase morale, reduce supervision and increased productivity in a variety of businesses. Without training, organizations create ambiguity that impact all aspects of the organization and makes it less profitable in the long run (Management Study Guide, n.d.). In addition, training instills confidence in the employees, giving them the necessary push to do what they are doing in a better way knowing that they are educating the client and providing them with the best possible service available (Johnson, 1997). In addition, creating a rigid training course for a business position, allows the employers to set expectations and thus drive results in a more direct form and allowing employees to ease into a role (Dale Carnegie Training, 2016).

Conclusion

In conclusion, implementing a transitional style of management, instilling training programs and creating value creates a better organization overall. An organization that is better able to tackle and implement the necessary changes and meet objectives on a consistent basis through the use of motivation, confidence and necessary skills acquirement.

References

Dale Carnegie Training. (2016). Why Training Is Important to Employee Engagement. Retrieved from Dale Carnegie Training: http://www.dalecarnegie.com/why-training-is-important-to-employee-engagement/

Felfe, J., & Schyns, B. (2004). Is Similarity in Leadership Related to Organizational Outcomes? The Case of Transformational Leadership. Retrieved from Available from ABI/INFORM Collection.:

Hillstrom, L. C. (2004). Value Creation. Retrieved from Reference for Business: http://www.referenceforbusiness.com/management/Tr-Z/Value-Creation.html

Hindle, T. (2009). Value creation. Retrieved from The Economist: http://www.economist.com/node/14301714

Johnson, T. (1997). Gaining the executive edge. Black Enterprise, 27, 103-107. Retrieved from Available from ABI/INFORM Collection.:

Management Study Guide. (n.d.). Training of Employees - Need and Importance of Training. Retrieved from Management Study Guide: http://www.managementstudyguide.com/training-of-employees.htm

Rocca, A. L., & Snehota, I. (2014). Value creation and organisational practices at firm boundaries. Retrieved from Available from ABI/INFORM Collection.: http://www.emeraldinsight.com/doi/abs/10.1108/MD-04-2013-0229

Spahr, P. (2014). St. Thomas University. Retrieved from Transactional Leadership: http://online.stu.edu/transactional-leadership/

Strader, T. J. (1998). Information infrastructure for electronic virtual organization management. Retrieved from Science Direct: http://www.sciencedirect.com/science/article/pii/S0167923698000372

Management Report on Governance and Regulation

Management Report on Governance and Regulation

            Law, government, and economics has an effect on the value creation of all businesses. The law provides organizations with many business entities to enter into, such as a sole proprietorship, partnership, corporation, or a limited liability corporation (Bagley, C.E., 2008). These business structures are selected by the organization in order to suit their business strategy. Government regulates business activities in very different ways according their industry specific needs.  The IRS, Department of Revenue, Department of Transportation, Department of Health, FDA, EPA, and the FCC are regulatory bodies that create standards for business operations.  The market and the economy also have substantial influences on businesses and their value creation.

The Law’s Influence on Value Creation

            Creating a viable business entity is one of the most important activities an organization takes in the first steps of starting a company.  The organization must decide whether they should become a corporation, a limited liability corporation, a partnership, or even to be a sole proprietor. The ramifications of taxation and liability are different for each entity and the variety of business entities created must align with the goals, mission and vision of business (Bagley, C.E., 2008).  Laws are not just meant to bind organizations they also help to create business opportunities (Bagley, C.E., 2006).  The enforcement of contracts and laws such as antitrust laws, intellectual property rights, information technology, environmental regulations, product safety standards, and legal recourse all help to create independent business practices (Bagley, C.E., 2006).  The enforcement of contract law promotes interdependence and cooperation among businesses (Bagley, C.E., 2006).  These laws help to not only protect the business entity from undue fines or litigation, but also helps to create financial and economic opportunities.  The opportunities arise from the competitive advantages created from holding intellectual property rights, licensing, and contracts.

            Economic Value Creation

            The laws help to create a level playing field for businesses within the market and within industries.  The market is in effect created by organizations, buyers, sellers, and customers are held contractually through agreements (Bagley, C.E., 2006).  When businesses are subject to the same regulations they are forced to create the means for their own competitive advantages in order to be profitable.  The economy has a major impact on business activities.  When the economy is low businesses tend to tighten up and go to lean production methods to control costs and reduce waste.  When economies are bustling businesses strive to keep up with demand.  Corporate strategies must take these economic times into consideration when formulating their practices in order to remain profitable. 

            The global economy is no different.  The global market has made financial integration among other countries reality (Walter, A., & Sen, G., 2009).  It is these economic results that create political connotations that change opinions and power (Walter, A., & Sen, G., 2009).  One political connotation is that economic policies create change in the distribution of wealth (Walter, A., & Sen, G., 2009).  The economic value of trade policies and exchange rates are what, economists claim, maximizes national and global welfare through trade agreements (Walter, A., & Sen, G., 2009).  Organizations and stakeholders must consider the global ramifications of their actions along with their personal and organizational goals.

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Governmental Factors of Value Creation

            The government has a large role that affects the business environment (Bagley, C.E., 2006).  The lobbying activities made by corporations, interest groups, and organizations such as; the National Restaurant Association, the Tavern League, the National Rifle Association, and AARP advocate what legislation helps their interests.  Each industry group aims to get legislators to hear their troubles and through financial support the lobbyists go up against governmental legislation and regulatory bodies to make laws that create efficient markets and economic prosperity (Bagley, C.E., 2006).

Economics and Value Creation

            AARP’s mission statement is reported by Hastley as being “dedicated to enhancing quality of life for all as we age, leading positive social change, and delivering value to members through information, advocacy, and service” (2011, para. 16).  It is special interest groups such as these that lead to policy change.  Walter, A., and Sen, G. state that “economic policies are almost invariably politicized because different choices have different effects on the distribution of wealth” (2009, pg. 2).  These changes result in economic and political connotations that change opinions and lead to creating power (Walter, A., & Sen, G., 2009).  Economics affects trade policies and exchange rates.  The global market has made financial integration among countries possible (Walter, A., & Sen, G., 2009).  Economists claim that using the comparative advantage theory is what maximizes national and global welfare through free trade agreements (Walter, A., & Sen, G., 2009). 

            Value creation sometimes comes at a cost.  For example, agribusiness lobbyists have supported bills that help to regulate food labeling objectives (Hastley, G., 2011).  At a cost to manufacturers regulations like this have been created to be a check and balance for maintaining truth in advertising and informing the public of the contents of their product.  These legislative initiatives have created a level playing field for organizations in their industry to differentiate themselves from others in the industry.  Some industries, like the oil industry, lobby for less regulations and governmental intervention in order to create value for themselves within their industry at a cost to the environment.  It is political strategies like this example that creates competitive advantages for industry giants like big oil.  In cases like this one can see how laws liberate organizations (Bagley, C.E., 2006).

Ethical Ramifications

            Keith, Pettijohn, and Burnett believe that ethics is not just based “societal implications” but also is “based on their economic and business implications” (2008, pg. 83). Unethical activities not only creates a less profitable business but it also creates a negative image (Keith, N.K., Pettijohn, C.E., & Burnett, M.S., 2008).  Together this also hampers employee relations, job performance, and job satisfaction of the employees (Keith, N.K., et. al., 2008).  The perception of a company is what influences behaviors, so in order to change the perception of an organization an organization can advertise.  Advertising serves many purposes.  It displays companies in a positive light to sell their goods or services (Murphy, P.E., 1998).  Advertising also serves the agencies creating the ads. Their creative differentiation attracts new customers and retains current customers (Murphy, P.E., 1998).  Advertising also serves the media through the payment for ad placements this supports their business of entertainment and educating society (Murphy, P.E., 1998).

            It is this web of connectedness that builds customer trust (Snyder, W.S., 2008).  Advertising needs to have truth, fairness, taste and decency (Snyder, W.S., 2008). The advertising industry is a $200 billion industry that is estimated to support 21 million jobs nationwide (Snyder, W.S., 2008).  Ethics is vital to an industry of this size.  Advertising is what helps to shape attitudes, behaviors, and priorities of society (Srivastava, V., & Nandant, T., 2010).  Snyder defines ethics as “the moral standards and principles, against which behavior is judged” (2008, pg. 62).

Conclusion

            The findings conclude the intricacies of how governance, regulations, laws, transparency, and ethical standards work together to shape the economic potential for industry and the entire marketplace.  Organizations drive the forces that determine standard practices and regulations in order to improve their economic livelihood. In doing so they help to form and shape social standards, attitudes, and perceptions.  The costs involved change both the economic and physical market environments.  The ramifications are seen in societal measures of what is considered ethical and just, and also in what determines the shape and extent of a global marketplace.

References

Bagley, C.E. (2006). What’s law go to do with it: A systems approach to management. Harvard Business School. Retrieved from: https://www.hbs.edu/faculty/Publication%20Files/06-038.pdf.

Bagley, C. E. (2008). Winning Legally: The Value of Legal Astuteness. Academy Of Management Review, 33(2), 378-390. Retrieved from: http://eds.b.ebscohost.com.lib.kaplan.edu/eds/pdfviewer/pdfviewer?sid=01485bb3-9114-4d60-9dc5-7c8c28d0ad2d%40sessionmgr106&vid=3&hid=119

Hastley, G. (2011). 10 of the biggest lobbies in washington. Business Pundit. Retrieved from: http://www.businesspundit.com/10-of-the-biggest-lobbies-in-washington/

Keith, N. K., Pettijohn, C. E., & Burnett, M. S. (2008). Ethics in advertising: Differences in industry values and student perceptions. Academy Of Marketing Studies Journal, 12(2), 81-96. Retrieved from: http://eds.a.ebscohost.com.lib.kaplan.edu/eds/pdfviewer/pdfviewer?sid=27da467b-7fe5-49ce-92bf-b14d7ebca51a%40sessionmgr4004&vid=2&hid=4210

Murphy, P. E. (1998). Ethics in Advertising: Review, Analysis, and Suggestions. Journal Of Public Policy & Marketing, 17(2), 316-319. Retrieved from: http://eds.a.ebscohost.com.lib.kaplan.edu/eds/detail/detail?vid=5&sid=27da467b-7fe5-49ce-92bf-b14d7ebca51a%40sessionmgr4004&hid=4210&bdata=JnNpdGU9ZWRzLWxpdmU%3d#AN=1376193&db=bth

Snyder, W. S. (2008, March). The Ethical Consequences of Your Advertisement Matter. Journal of Advertising Research. pp. 8-9. Retrieved from: http://eds.a.ebscohost.com.lib.kaplan.edu/eds/pdfviewer/pdfviewer?sid=27da467b-7fe5-49ce-92bf-b14d7ebca51a%40sessionmgr4004&vid=12&hid=4210

Srivastava, V., & Nandan, T. (2010). A Study of Perceptions in Society Regarding Unethical Practices in Advertising. South Asian Journal Of Management, 17(1), 61-69. Retrieved from: http://eds.a.ebscohost.com.lib.kaplan.edu/eds/pdfviewer/pdfviewer?sid=27da467b-7fe5-49ce-92bf-b14d7ebca51a%40sessionmgr4004&vid=14&hid=4210

Walter, A., & Sen, G. (2009). Analyzing the Global Political Economy. Princeton, N.J.: Princeton University Press. Retrieved from: http://eds.a.ebscohost.com.lib.kaplan.edu/eds/ebookviewer/ebook/ZTAwMHhuYV9fMzU1MDUwX19BTg2?sid=b3e04d35-0057-448b-9ce2-1b0791a86cee@sessionmgr4001&vid=10&format=EB&rid=91

Taking a Business Global

Global View

     Expanding a company into a global organization can be complex and is not an over-night process. When deciding to expand a business globally a company must understand the value creation it will or will not create before making a final decision. The company must understand their industry and how it will be viewed as well as be accepted globally. The business model also need to be evaluated to ensure it fits a global structure or can be restructured to fit a global structure (Forbes, 2013).  There are also aspects such as economics, government, and law that impact the global expansion of any business.

     Takeda Pharmaceuticals is a large pharmaceutical organization that has a global footprint already but, as an organization, has been taking steps towards becoming an actual ‘global company’ rather than a company with a global footprint due to having multiple subsidiaries around the globe. The foundation steps for determining whether or not to grow the business globally, evaluating the business model to ensure it is fit for a global expansion, and understanding how the company will fit in a global market have already been completed. Moving forward the company is making internal steps to ensure making the transition from a company will a global footprint to a global organization is successful.

Economic Impact

     “The globalization from economic aspect has two main components: the globalization of markets and globalization of production” (RISTOVSKA & RISOVSKA, 2014, p 208). When globalizing markets the company is merging different national markets into one big global market and globalizing production is realizing the differences in price and quality factors internationally (RISTOVSKA & RISTOVSKA, 2014).  From a pharmaceutical perspective these two impacts are major factors.

Governmental Impact

    “Globalization is a worldwide trend, through which economies in the world lose their borders and connect to each other. The companies are no longer imprisoned in their borders and can implement a wide range of business activities around the world” (RISTOVSKA & RISTOVSKA, 2014). This requires governments to unify socially which will require the formation of unions and trade agreements to push nations into a single business market. This will lead to the “reduction of barriers for trade and foreign investment by most governments, which leads to intense opening of new markets by international companies” (RISTOVSKA & RISTOVSKA, 2014).

     When it comes to the pharmaceutical industry compliance is a major part of the business and heavily governed by all governments around the globe. Each market has a different set of regulations, requirements, and tax for producing and selling pharmaceuticals, not to mention the regulations around conducting clinical trials to get the drug to market. Global pharmaceutical companies must be diligent with their communication and compliance to ensure they are meeting the regulations of the country/market they are entering or attempting to enter.

Law

     Each county, and many times, individual regions have their own set of regulations and laws around pharmaceuticals. The purpose for such laws in many countries and regions is to protect the lives and welfare of the citizens. Ultimately the goal of the pharmaceutical company should be to better the health of their patients. However, as many are aware, the pharmaceutical industry, as a whole, has not always acted ethically when it came to the well being of the patients.

Value Creation

     Value creation “allows [pharma companies] to identify and satisfy unmet customer needs, often at the intersection of science and marketing” (Behnke, Retterath, Sangster, & Singh, 2014). Ultimately, for the pharmaceutical industry, value creation is about seeing a need in a patient and researching way to create a solution to the medical issue. When it comes to Takeda Pharmaceuticals their value creation stems from their diverse portfolio: gastrointestinal, oncology, central nervous system, and cardiovascular and metabolic pharmaceuticals (Takeda, 2016).

Expansion Strategy

     While there are many pharmaceutical companies around the globe, Takeda Pharmaceuticals, chooses to strive on innovation and compliance. In order to transition from an international business into a truly global organization Takeda needs to look internally. They need to review their current operations and look for redundancies among the various businesses across the globe. They also need to look at their systems and technology to be on a global system to make information sharing easier and less timely.

Conclusion

     Takeda Pharmaceuticals strives on their core values: commitment to improving health, strength from diversity, and people are empowered by passion (Takeda, 2016). This is a sound foundation to move them forward. Currently they are an international organization helping people around the globe with medical issues. In order to move the company forward they need to transition from being an international organization with a footprint around the globe to a truly global organization. In order to make this transition Takeda needs to make steps towards production efficiencies without redundancy and investing in global systems.

     

References

Anderson, A., (March 2006). Developing Countries- Amending TRIPS to Promote Access for All. University of Tulsa College of Law. Digital Commons. Retrieved from http://law.bepress.com/expresso/eps/1109/

Behnke, N, Retterath, M. Sangster, T. & Singh, A. (2014). New Paths to Value Creation in Pharma. Bain & Company Inc. Retrieved from http://www.bain.com/Images/BAIN_BRIEF_New_paths_to_value_creation_in_pharma.pdf

Forbes (8 Oct 2013). Five Steps To Expand Your Business Globally. Forbes LLC. Retrieved from http://www.forbes.com/sites/theyec/2013/10/08/five-steps-to-expand-your-business-globally/2/#7d9aff84f06d

Hacklin, F. (2008) Management of Convergence in Innovation. Strategies and Capabilities for Value Creation Beyond Blurring Industry Boundaries. ISBN 978-3-7908-1989-2. Physica-Verla Heidelberg. Springer.com

RISTOVSKA. K., & RISOVSKA. A. (2014). THE IMPACT OF GLOBALIZATION ON THE BUSINESS. Economic Developments/Ekonomiski Razvoi. 16(3),205-213

Takeda (2015); Retrieved from http://www.takeda.com/company/