Managing to add value to resources

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Definitions

Organisation - A social arrangement for achieving controlled performance towards goals that create value.

Tangible Resources - The physical assets of an organisation such as plant, people and finance.

Intangible Resources - Non-physical assets such as information, reputation and knowledge.

Competences - The skills and abilities which an organisation uses to deploy resources effectively.

Value - Added to the resources when they are transformed into goods or services that are worth more than their original cost plus the cost of transformation.

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Value and Organisations 1

  • We live in a world of managed organisations.
  • They affect us and we judge their performance.
  • We depend more on others to satifsy our needs.
  • We meet these by acting individually or within social groups.
  • Good managers bring out the best in people so that they go the extra mile.
  • The managers role is to obtain the resources and develop the competences to use them.
  • This is so the organisation adds value.
  • Well managed organisations create value by delivering goods and services which make the customer feel better off in some way.
  • Good managers understand what customers value and allocate the resources to satisfy them.
  • Commercial organisations of all kinds create wealth for their owners by adding value to resources.
  • Co-operatives do the same, though with a different ownership structure.
  • Some are owned by customers who recieve a share of the profits as a dividend.
  • Others are owned by their employees. (John Lewis Partnership)
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Value and Organisations 2

  • Voluntary and charitable organisations aim to add value by educating people.
  • Raising the income, and ensuring that the research and other projects it supports give value for money, is a formidable management task.
  • Theatres, orchestras, museums and art galleries create value by offering inspiration.
  • Other organisations add value by serving particular interests.
  • Firms in most industries create trade organisations to protect their interests by lobbying or public relations work.
  • While organisations aim to add value, many do not.
  • Motorways create value for drivers but destroy value for some people if the route damages wildlife.
  • Some issues that managers face arise in most organisations.
  • The value an organisation creates depends on how well those who work there understand the situation.
  • They use that knowledge to develop the right resources and competences.
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