Value driven management involves the maximization of the long-term good of a company by understanding the value theory. The value theory states that what people value drives their actions. In other words, people are motivated by things that are significant to them. This may be different for each individual as some people are driven by money and others are driven by achievement.
This form of management takes into consideration the effect of business decisions on the organization and its stakeholders. With this in mind, it encourages the creation of value over time in order to help sustain the company. Creating such value over time requires an organization to pay attention to eight key value drivers. These value drivers include external cultural values, organizational cultural values, individual employees, customer values, supplier values, third party values, owner values and competitor values (Pohlman & Gardiner, 2000, p.36).
Many organizations today, use value driven management to achieve success. However, many organizations have different methods of achieving the same goal. In this paper, we will discuss the practices of two major corporations to see how they use value driven management in their organization. We will compare how these two companies use the value driven management approach to gain enormous success in their respective industries.
The two companies we have chosen are Best Buy and Procter & Gamble. These are two companies that have been in existence for a number of years. Both of these organizations have managed to excel in their respective industries. Therefore, they must be doing something right. Hopefully we can get to know these companies better and find out what they are really about. In doing so, we will be able to learn a great deal about these organizations and how they function. In addition, we will be able to apply the concepts of value driven management in order to have a better understanding of how it works. Best Buy
Best Buy was founded by Richard Schulze and his business partner in 1966. The first store opened in St. Paul, MN as the Sound of Music (About Best Buy – Best Buy History Timeline, 2009-2015). With operations in the United States, Canada, Europe, China and Mexico, Best Buy is a multinational retailer of technology and entertainment products and services with a dedication to growth and innovation. The Best Buy family of brands and partnerships generate more than $45 billion in annual revenue and consists of brands such as Best Buy; Audiovisions; The Carphone Warehouse; Future Shop; Geek Squad, Jiangsu Five Star; Magnolia Audio Video; Napster; Paciﬁc Sales; The Phone House; and Speakeasy. About 155,000 employees use their talents to help bring the value of these brands to life for customers through retail locations, multiple call centers and Web sites, in-home solutions, product delivery and activities in various communities. Best Buy is constantly changing into a vibrant, customer-driven, talent-oriented company that focuses on boosting their customers' enjoyment of technology (About Best Buy, 2009-2015). External Cultural Values
Being a global company, Best Buy aligns its external cultural values with the global and local community. They have implemented social, philanthropic and environment-friendly initiatives to support the community. Best Buy aims to reduce greenhouse gas emissions, increase overall operational efficiency and attain sustainable business behavior.
Best Buy is committed to reducing pollution and saving energy through their Greener Together program. Throughout decades of philanthropy, Best Buy has contributed to non-profit organizations in various communities where employees live and work. The company has an extraordinary culture of volunteerism led by the dedication and giving spirits of its employees. The Best Buy Children's Foundation strengthens communities through national and local grant making programs (Community Relations -...