FAIMA Business & Management Journal – volume 8, issue 3, September 2020

FAIMA Vol 8 - Issue 3 [September 2020]

CONTENT

Value-Based Management............................................................................ 3

Sorin Ionescu

Business Location: From Strategy to Customer Satisfaction....................... 5

ACezar Scarlat

The Integrated Model of Innovation.......................................................... 16

Mihai Svasta

Creating Value in the Supply Chain............................................................. 26

Bianca Guliman, Sorin Ionescu, Andrei Niculescu

The Language of Risk Analysis..................................................................... 35

Titu-Marius I. Băjenescu

Factors Influencing Marketing Decisions.................................................... 53

Alexandra Ioanid

Chatbots as Marketing Communication Tool............................................. 62

Cristian-Aurelian Popescu

Human Capital in Crisis................................................................................ 76

Alexandru-Sebastian Lazarov

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EDITORIAL

Value-Based Management

Managers have always focused on the success of their activities, such as, the achieve­ment of objectives (efficiency), minimum consumption of resources (economy) and on the process of transforming resources into products (efficiency). As the market belongs to the customer, managers began to notice that they pay attention to the price of the products (which must cover the costs) and the quality (it is the product image in customer eyes, based on its characteristics). Therefore, the costs and features reflect an attribute of the product, its value.

Value is a potential that an entity has to satisfy a human need. It can be an economic potential, but also emotional, moral or artistic one. Value is a relationship between an entity (commodity, company, deed) and a person, through which the person expresses the importance given to the entity to acquire it, because it satisfies a need. The measure of value is subjective, depending on the importance that the entity has for the individual. In the Relativistic theory of value, value is a relationship of appreciation between the sub­ject and the object of valorization. It uses objective data, historical criteria determined by the social practice to which the subject subscribes.

The value has as primary source the quantity and quality of the delivered work, correl­ated with the economic preferences, the abundance (or rarity), the quality of the goods. The value classification is done, according to the analyzed entity into economic values (refers to products, means of production, re­sources, managerial techniques, work), ethical, legal, political, religious, esthetic values. There­fore, there are several types of values (the economic value is not including everything) that are expressed approximately by price. Only mer­chan­dises have economic value. Happiness, free­dom are also values, but not economical ones. For this reason, the price partially reflects the value of an entity.

Value is an indicator used to take decisions and make choices within the company, but also in the market. It can be value for the manufacturer or value for the customer and there is a dif­ference in how the customer and the producer view the value. Moreover, the value can be apparent or real (not influenced by inflation). Other types of values are residual value (which remains from a depleted resource) and marginal value (related to the utility of having or consuming an additional unit from an entity. As the need is met, the intensity of the need decreases and the utility of the entity decreases. Subjectively, the saturation threshold remains. An entity has its value as long is desired. Even, after exceeding the saturation threshold, it is still expected that satisfaction will be obtained and for this reason the marginal utility cannot be zero and cannot be negative, although it is practically not so.

Value can appear through work (Marx), through rarity (Ricardo), through created feel­ings (Menger), although things should not be treat as absolute. Creating an entity requires the participation of several company departments and several companies. The value flow in a company should be presented as a map, in order to be easy for studying (VSM – Value Stream Mapping). M. Porter defined the value chain and the value system. The value chain is the sequence of activities in a company, necessary to create an entity that meets the needs of the customer. Each link in the chain must have lower costs than the corresponding link in the competing companies or it must add more value through superior quality. The value system is a succession of value chains from companies that contribute to the realization of a product.

Value-based management is a management style that defined by setting goals to maximize value; resource al­lo­cation strategies; efficient operational decisions; performance measurement; compensations payment (salary); value development. The European standard EN 12.973: 2000 for Value Management states that we need an ori­en­tation towards motivating people, developing skills, promoting synergy and innovation. Value management involves teamwork, satisfaction, communication, helping each other, encouraging change, ownership, a certain de­gree of freedom.

Sorin Ionescu

Editor-in-Chief