Doc :No: RICS-SBE/XX/XX/S006/R02

Revised on: 24-05-2019

Business Value Creation

Image source- http://www.cagl.ca/en/five-key-elements-will-maximize-business-value/

 Subject Overview – Course Objectives & Learning Outcomes

Course Objectives
• The course aims to provide fundamental knowledge of business
organizations, their functions and processes and develop an overall
understanding of business organizations in today’s global economy,
especially in the “Built Environment” scenario.
Learning Outcomes
1. Demonstrate the understanding pertaining to issues related to
management of an organization and its stakeholders.
2. Explain aspects of management of organization in Built Environment
sector.
3. Evaluate the impact of various aspects of management of organization on
its effectiveness.
 Module- Description

Course Content Weightage

Module I – Business Value Creation

Definition of business, Value creation, Global trends pertaining to business environment and specifically Built 10%
Environment sector – Opportunities and Challenges
Module II – Management Principles, Functions and Concepts

Evolution of Management (theories and approaches- Fayol, Webber etc.), Management Functions-POLC framework,
Understanding the organization and its design , Organizational culture, Typical organizations in Built Environment, 30%
Organization Strategy, Goals , values, ethics and Structure, Corporate Culture and Ethics in a Global environment
Organizational conflicts- power and politics , Organizational decision making, Understanding the role of a manager
and a leader, Organizational Metrics.

Module III – Contemporary Issues in Management

Managing organizational communication-Information and Control Processes, Organizational Innovation and managing 30%
change, Managing Equity and Diversity, Knowledge Management.
Module IV – Impact of External Environment – Stakeholder Management
Stakeholder Theory, Freeman’s Model, Stakeholder, Stake-watcher, and Stake-keeper, Stakeholder view of the Firm
and Project PMBOK concepts pertaining to stakeholder management (Identify Stakeholders, Plan Stakeholder
Management, Manage Stakeholder Engagement, and Control Stakeholder Engagement.) Public Engagement 30%
Process, Social analysis- CLIP tool, Information and Communication Management Systems for Stakeholder
Management, Value creation for stakeholders- Client Care, Corporate Social Responsibility, Resettlement and
Rehabilitation.
 Assessments

End Term
Continuous Assessment / Internal Assessment
Examination

Components Assignment 1 Assignment 2 Class Test Attendance

50%
Weightage (%) 15% 15% 15% 5%
 Definitions

Business
• An organization or economic system where goods and services are exchanged for one another or
for money.
[Source: http://www.businessdictionary.com/definition/business.html]
Organization
• “Organizations are 1) social entities that 2) are goal-directed , 3) are designed as deliberately
structured and coordinated activity systems, and 4) are linked to the external environment”. –
Definition by Daft
• Deliberate arrangement of people to accomplish some specific purpose.
Management
• Art of getting things done through people – Mary Parker Follet
• Management is a process “consisting of planning, organizing, actuating and controlling, performed
to determine and accomplish the objectives by use of people and resources.” – George R. Terry
•
 Importance of Organizations

Organizations are a means to an end

The corporation has played a significant role in the last 100 years

Produce goods and services efficiently

Facilitate innovation

Adapt to and influence a changing environment

Create value for owners, customers, and employees

Accommodate ongoing challenges of diversity, ethics, and the motivation and coordination of
employees

6 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Efficiency
Effectiveness
Being effective-
Achieve What
We Aim for
• How well We
Manage Others
• How well We
manage Ourselves
Business Aim- Create Value

Sustainability, Social
responsibility

Enhancement of profit / stock

price Stakeholders
Shareholders Value in product and
service
Customers
Business
value Cre
ation
• Interests of each level is linked to the other

• Determining what constitutes value for each

levels helps in aligning the efforts , skills and
resources of the organization
Major Stakeholder Groups and What They Expect

11 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Value creation for Customers- Porters Value Chain

Inbound logistics — These are all the processes

related to receiving, storing, and distributing inputs
internally. supplier relationships are a key factor in
creating value here.

Operations — These are the transformation

activities that change inputs into outputs that are
sold to customers. Here, your operational
systems create value.

Outbound logistics — These activities deliver your

product or service to your customer. These are
things like collection, storage, and distribution
systems, and they may be internal or external to
your organization.

Marketing and sales — These are the processes

you use to persuade clients to purchase from you
instead of your competitors. The benefits you offer,
and how well you communicate them, are sources
of value here.

Service — These are the activities related to

maintaining the value of your product or service to
Image Source - https://medium.com/evergreen-business-weekly/why-value-creation-is-the-foundation-of-
your customers, once it’s been purchased.
business-how-to-define-it-measure-it-and-manage-it-147c92b87aca
 Measuring Value Creation

Value Creation through revenue earned . Revenue is the measure of value creation — not profit. A company can
create value without creating a profit, and many do. But they don’t do it for long.

Perceived Use Value is subjective, it is defined by customers, based on their perceptions of the usefulness of the
product on offer. Total monetary value is the amount the customer is prepared to pay for the product.

Exchange Value is realized when the product is sold. It is the amount paid by the buyer to the producer for the
perceived use value.

Total Monetary value is the price of the product and the perceived consumer surplus > 0

Source of the text and image: https://medium.com/evergreen-

business-weekly/why-value-creation-is-the-foundation-of-
business-how-to-define-it-measure-it-and-manage-it-
147c92b87aca
Characteristics Of Value

Value is defined by the customer

• Even if the service / product provider suggests a particular value, the customer ultimately decides whether or
not the service is valuable enough for them or not.
Affordable mix of features
• Depending on which service / product offering has the most effective set of features and at a reasonable
price, customers make their choice.
Achievement of objectives
• Customers perceive maximum value from those particular services / products which can be associated with
their business objectives, and this value may not always be financial in nature.
Value changes over time and circumstance
• As time passes, the perception by a customer regarding what is valuable to them is likely to change as their
business priorities change.

Source : https://www.invensislearning.com/resources/itil/overview-of-value-creation-through-services
 Perception of Value

Quality

Impacted by
marketing Customers

Cost Service
In Perspective
 Drivers of Value Creation

Leadership &
Culture

Image source- https://thesystemsthinker.com/value-creation-and-business-success/

What is this Subject All About ???

We aim to impart the knowledge about various

management principles to manage an organization and it’s
employees (internal stakeholder) , so that they can create
value, which satisfies the expectations of the stakeholders.
 Challenges of the Environment

Changing Shifting organizational boundaries, Virtual workplaces, More mobile workforce,

technology Flexible work arrangements, empowered employees, work-life balance, social
(Digitization) media challenges, Attracting employees for Built Environment is yet to take
the next technological leap.
Increased Redefined values, rebuilding trust, increased accountability, sustainability ,
emphasis on Conflicting priorities of stakeholders , new regulations like RERA, conflict
Organizational and between profitability and client care
Managerial ethics

Increased Focus on Customer , innovation, globalization, efficiency / productivity, faster

competitiveness delivery times , frantic pace of development.

Changing security Risk Management, Uncertainty over future energy sources / prices, restructured
threats workplace, discrimination concerns, globalization concerns, economic uncertainty,
employee assistance
Need for Management

All organizational areas

All sizes of organizations (Manufacturing , marketing,
(small to large) human resource, accounting,
construction, real estate)
Management is
needed in

All organizational levels All types of organizations

(Bottom to top) (Profit-non profit)
THANK YOU