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... Important Value Drivers
B. Value Drivers in Action
III. ... One approach organizations have taken to ensure their livelihood is Value Driven Management. The common goal of this approach is to maximize Value Over Time (VOT). Value Over Time is an encompassing term used for many aspects of a business which include, but are not limited to, profits, value creation, and value drivers. ... This Management style is not intended to replace an existing style of management, but to aid the company in value creation. ... These companies are established with one goal in mind, to maximize Value Over Time. ... The organization must hold the eleven assumptions true and use the eight Value Drivers appropriately. ... The goal of this organization was the creation of value; and one could make the assumption that the company is doing exactly that. ... ”(Sittenfeld, 3 ) The analytical thinking of this line brings to the surface a few key issues and paints a much darker picture of the company’s ability to create Value. ... This organizational practice also eliminates profit, which will cause great pains in the creation of value over time.
The location of CDC is interesting when one considers the theory behind value creation. The theory believes value creation occurs through analytical thinking. Why would the company locate itself in a small town if they were so dedicated to value creation?
Looking closely at these key issues one realizes maximizing Value Over Time does not occur at Consolidated Diesel Company. ...
The creation of VOT is driven by what is referred to as The 8 Value Drivers. The drivers overlap and inter-relate to comprise the entire organization. Value Over Time is not a quantitative term but rather subjective. ... In the case of Consolidated Diesel Company 6 of the 8 Value Drivers will be examined. ... The customer created CDC, which in turn shows that much of the value is pulled out of CDC and passed on to the parent. ... Profit will enable CDC to break itself from their parent companies, which will in return allow the value drivers to function correctly as a unit. The value drivers currently do not encompass one organization but instead are woven around a few. ... Individual cultural value has very good potential to create VOT with modifications. ... The surface may appear wonderful but the truth when you reach the center; very little value creation is truly taking place. ... The minimal Value Over Time in this company can be attributed to these values. ... Value Driven Management is very specific in the need for employees at all levels to be able to control their company. ... The common phrase in Value Driven management, “Powered by the People,” does not apply here. ... VI states that markets provide vital information, and VII refers to opportunity costs affecting value. ... The value of the engine CDC produced is not affected.
The second factor that shows Value Creation is not being maximized in this case, is the violation of the third step to Value Driven Management. The step states, “Compensation must be tied to value-creating behavior in every unit and at every level throughout the organization. ...
“No Value Drivers are islands in and of themselves,” currently the value drivers are not working congruently (Pohlman and Gardiner, 47).
Approximate Word count = 2616
Approximate Pages = 10.5
(250 words per page double spaced)
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