The main contributions of value based management

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The main contributions of value-based management (Haspeslagh et al. 2001) are: to understand where value is created or destroyed in companies, to make employees appreciate that capital has a cost, to make managers focus on the balance sheet, to allocate resources towards the most productive uses, to make sure that
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business units make a profit that cover the cost of capital, to make managers act like owners of the company, to improve communication between business units and the corporate centre, to improve stock prices and to make strategic planning less of a paper exercise. Value is also the aim of the design activity. Every design project is targeted for value creation. Design research, publications and education are based on the certitude that the design community has high standards of ethics and shared values. Bringing value to society and to human beings is what design is about. Yet when it comes to assess these design values, designers tend to rely on either peer reviews as in design awards for good design or on the numeric evidence of design � � improving sales figures, brand market share and reputation. Hence, the design community is missing the broader point of the concept of value from the management community. Indeed, it is an interesting paradox between the conviction of designers to bring value to organizations and society and their total ignorance of what organizations mean by and how they create value. This chapter explores the value paradox through the dynamics of theory building of value and design in two sections. The first section explains the foundations of the theory with its four loops. The second section discusses the professional and future developments of the theory of design management in strategy (see Table 18.1). Design Strategic Value Revisi ted 279 Table 18.1: Design strategic value longitudinal retrospective Research Loop Period Theory Background Main Findings 1. Design as value 1980 90 Peirce model Profit Performance 1. Design is a generic activity across design disciplines 2. Design increases an organization s profit because it improves innovation management, the innovation itself and the marketing of innovation 3. Design value can be measured as perceived value, economical value and process value. 2. Design value in the value chain 1990 5 Value chain Organizing the variables describing the value of design into the model of the value chain. Design brings value to the principal, activities (differentiator) to the support activities (coordinator), and to the value chain system (anticipator). 3. Design value chain in the value management 1995 2002 Michael Porter Strategy Competitive advantage Demonstrating how design is positioned in the value chain gives a typology of Design management in three clusters: Design strategy as economic value Design strategy as managerial value Design strategy as resource value 4. Design strategic value as core competency
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2002 9 Resource-based view Giving evidence of design as core competency. Design as generic design or design thinking
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