An author of this paper critically evaluates literature to discuss the importance of “creating and adding value for the stakeholder” as a key requirement for sustained competitive advantage in the 21st-century organizational environment in a way of examining Toyota company strategy.
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The rapid changes in business environment in the 21st century demand that businesses reinvent themselves in order to remain relevant. The economy has changed from being commodity based to become a knowledge –based one. Sources of value creation have shifted from tangible assets to intangible things. Advances in technology and globalization have given the issue of making networks and building long-term relationships more prominence (Castell, 2000). Simply put, in the information age, the flow of communication plays a vital role in enabling the business to succeed.
According to Freeman, the term stakeholder may be defined as any group or individual who are in a position to affect or be affected by a company’s objectives. The type of interests that the stakeholders have in a company differs. For instance, investors have a stake in the equity of the firm. In addition, other direct stakeholders such as customers, employees, suppliers and competitors have a stake in the financial success of the company. Wheeler and Sillanpaa (1997) also included individuals and groups that speak for the environment, non-human species and future generations in the list of stakeholders. This type of stakeholders is interested mostly on the impact that the firm has on people and on the environment.
Further, Freeman states that there are two fundamental issues that should be articulated in the analysis of stakeholder theory and value creation (1994). First, the fundamental question on the purpose of the organization must be answered. This sets the stage for the management to elaborate on the core function that the firm engages in. The shared purpose of the value that the organization creates helps to rally the stakeholders to work hand in hand towards achieving their goal. The second issue that should be considered is about the responsibility of the management to the stakeholders. It is accepted that sustainable economic value can only be created by the voluntary coming together of people to improve the wellbeing of each other. It is imperative the organization outlines how it intends to do business and precisely the kind of relationships it intends to build with the stakeholders. Creating value for stakeholders provides a win-win scenario for both the firm and the stakeholders (Jones et al, 2002). When a company creates products and services that customers are willing to buy, offering rewarding jobs that
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In the present day and age, it is even more difficult to find sources of sustainable competitive advantage than it was ever before, with constant changes in strategy to cater for changing realities and frequent action to take advantage of emerging opportunities.
Purpose The overall purpose of this paper is to inform the Board about adding customer value to our bank in order to achieve the competitive advantage. Through this Board Paper, worthy members of Commonwealth Bank’s Board will contemplate upon the creation of competitive advantage for the bank by adding customer value.
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significant improvement in customer service/relations and management included a new innovation in marketing management, which proves to be potentially beneficial for customer service. This marketing management consideration related to the tills for more automated checkout in
He employs other management practices that will enable employees to perform effectively in the business environment. This includes motivation and compensation practices, which have outstanding features. Netflix employs a compensation model that offers employee
business management, there have been a lot of economic liberalizations, which have increased the number of business activities, thus creating extreme competition. The competition being witnessed in many industries mean that consumers are the major beneficiaries. First, they are
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