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rh - - - - 111111111#1#11111111llll 1403605063 SWP 14/98 VALUE CREATION VERSUS VALUE CAPTURE: TOWARDS A COHERENT DEFINITION OF VALUE IN STRATEGY - AN EXPLORATORY STUDY PROFESSOR CLIFF BOWMAN and VI?RONIQUE AMBROSINI Strategic Management Cranfield School of Management Cranfield University Cranfield Bedfordshire MK43 OAL Tel: +44 (0)1234 751122 Fax: +44 (0)1234 750070 Email: v.l.ambrosini@ cranfield.ac.uk The Cranfield School of Management Working Papers Series has been running since 1987, with approximately 4.50 papers so far from the nine academic groups of the School: Economics; Enterprise; Finance and Accounting; Human Resources; Information ,Systems; Logistics and Transportation; Marketing; Operations A4anagement; and Strategic Management. Since 1992, ~papers have been reviewed b”v senior members offaculty before acceptance into the Series. A list since 1992 is included at the back of this paper. For copies of papers (up to two free, then f.5 per copv, cheques to be made payable to the 1 Cranfield University), please contact Cl/nwe Bulbrook, Research Administrator, at the address ~ on the back of this booklet. 0 All Rights Reserved. Cranfield School of Management, Bowman & Ambrosini, 1998 lS6Nt859051278

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P R O F E S S O R C L IFF B O W M A N a n d V I? R O N IQ U E A M B R O S INI S t rateg ic M a n a g e m e n t
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Towa r ds a c o h e r e n t d e fin i t i on o f v a l u e i n st rategy: a n exp lo ra to ry s tudy
Cliff B o w m a n a n d W ron i que Amb ros i n i
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Towards a coherent definition of value in strategy: an exploratory study
Resource-based theory has tended to focus on the development and protection of valuable
resources. What determines a valuable resource has received less attention. This paper
addresses three related issues concerning value and valuable resources: what is value? how
is it created? and who captures? We have tried here to integrate different strands of the
literature to address these questions. We first argue that value is subjectively assessed by
customers and that value is only realised at the point of sale. Secondly, we argue that the
only source of value is labour performing heterogeneously and that value is created if this
labour is artfully deployed with other resources. The paper ends arguing that value capture
is determined by power relationships between economic actors.
Towards a coherent definition of value in strategy: an exploratory study
The resource-based theory of the firm (RBT) (Peteraf, 1993; Wernerfelt, 1984) argues that
an organisation can be regarded as a bundle of resources (Amit and Shoemaker, 1993;
Rumelt, 1984), and that resources that are valuable, rare, imperfectly imitable and
imperfectly substitutable (Barney, 1991) are an organisation’s main source of sustainable
competitive advantage. However, whilst most of the contributions to this view have focused
on the ease with which valuable resources can be imitated, less consideration has been paid
to what makes particular resources valuable in the first instance. Most contributors start
from an assumption of a resource’s value, and then proceed to consider issues of
imitability. As Miller and Shamsie recently remarked “after years of interesting conceptual
work, we are still at an early stage in knowing what constitutes a valuable resource, why
and when” (1996539). This paper suggests that, in order to progress RBT a more precise
and rounded underpinning theory of value is required to help us identify ‘valuable
resources ’ .
Accordingly, the paper addresses the following questions: what is ‘value’? how is it
created? and who captures it? It opens with a review of ‘value’ in RBT, then, a few
reflections about the nature of value are proposed, which in turn leads into a
reconsideration of resource-based arguments about value creation. A theory of value
generation is set out which concludes that the source of value and hence profits (as the
proportion of value captured by the firm) is the artful deployment of labour with other
resources. The paper then addresses the distinction between value creation and value
capture. Here it is argued that although value is created by labour in action, value capture
is determined by power relationships between economic actors.
An underlying theme of the paper is that appearances often prevent us from
identifying the essential relationships between economic actors, and that many of the
problems and confusion in mainstream economic theorising stem from the inability to
separate these two levels of analysis.
‘Value’ In Resource-Based Theory
The major contribution of RBT has been the exploration of heterogeneous resource
endowments and how these can be the source of advantage if competing firms are unable to
imitate these resources (Amit and Schoemaker, 1993; Black and Boal, 1994; Mahoney and
Pandian, 1992). In most contributions to the school, resources are assumed to be valuable
(one exception being maybe Wernerfelt (1984) who defines resources as anything which
could be thought of as a strength or a weakness of a given firm), and attention has been
focused on isolating mechanisms that prevent rival firms from replicating the desired
resource bundles (Rumelt, 1984). When the issue of valuing a resource is addressed, it
tends to be discussed in broad, general terms. The few authors that have attempted to
define the term ‘valuable’ tend to argue that resources are valuable in relation to a specific
market environment (Amit and Schoemaker, 1993). To cite Barney a resource is valuable if
“it exploits opportunities and/or neutralises threats in a firm’s environment” ( 199 1: 105). A
resource has also been defined as valuable if it either enables customer needs to be better
satisfied (Bogner and Thomas, 1994; Verdin and W illiamson, 1994), or if it enables a firm
to satisfy needs at lower costs than competitors (Barney, 1986 a; Peteraf, 1993). Barney
also suggests that resources are valuable “when they enable a firm to conceive of or
implement strategies that improve its efficiency and effectiveness” (1991: 106).
Conner (1991) argues that, from a resource-based perspective “obtaining [above
buyers (e.g. the firm’s product must offer to consumers a dissimilar and attractive
attribute/price relationship in comparison to substitutes), or (b) that the firm selling an
identical product in comparison to competitors must have a low cost position” (1991: 132).
The argument that resources have value in relation to their ability, inter alia, to
meet customers’ needs is consistent within RBT (see Aharoni, 1993 ; Aaker , 1989; Prahalad
and Hamel, 1990, 1994; W illiams, 1992). This then begs the question: how do customers
judge the extent to which an existing product meets their needs, or whether a new product
on the market would better meet their needs? In other words, how do consumers make
judgements about the value, to them, of alternative products?
Assessing value
Traditionally when looking at value and consumer behaviour, economists tend to refer to
utility theory and to the notion of marginal utility. The theory states, essentially, that
consumers spend their income so as to maximise the satisfaction they get from products.
Total utility refers to the satisfaction deriving from the possession of a commodity and
marginal utility refers to the satisfaction that people receive from possessing one extra unit
of a good or the satisfaction lost by giving up one unit. Early neo-classical economists
assumed that people were rational (the economic man) and as such assessed systematically
and carefully the different available options before purchasing. However this position has
been softened and it is generally held that “by and large, people spend their money on what
they expect will give them most satisfaction” (Bach, Flanagan, Howell, Levy and Lima,
The issue then, is how do people develop their expectations, how do they judge the
utility they are going to get i.e. how do they judge the value of a product? The potential
purchaser has to judge how the product’s attributes will satisfy hisI needs. Judgements are
made in advance of the consumption of the product, so customers have to make inferences
about the range of products on offer based on a variety of cues. Customers’ perceptions of
the value of a good are based on his beliefs about the goods, his needs, unique experiences,
wants, wishes and expectations. In other words, customers assess the overall value of a
product on the perceptions of what is received and what is given (Zeithaml, 1991).
Value perception applies to all purchasers and not only to final consumers: the same
type of judgement, a subjective judgement is made by a manager when procuring inputs
like machines, components and an employee’s labour time or by an individual when buying
a fridge or a car. In a ‘consumer’ purchase, such as “I need a car therefore I buy a car”, the
need may be fairly easy to define. In an organisation the need for a purchase may not be
that clear, indeed it could be argued that the ‘need’ that is to be met with the purchase is
‘profit making’ (Besanko, Dranove and Shanley, 1996). This seems rational and logical,
but it requires the purchaser to have great insight into the cause-effect linkages between
resource procurement and the ultimate delivery of profit. More reasonably, the procuring
agent has to have some belief that the procured resource will contribute to the profitability
1 He (his/ him) is used here to mean she (her).
I -
rl l
o f th e firm , a n d th is be l ie f wi l l b e r o o te d in a w i de r se t o f be l ie fs a b o u t h o w th e firm
c o m p e tes , wh i ch m a y b e fu r th e r b o u n d e d by a n i ndus try r ec i pe (Hu ff, 1 9 8 3 ; J ohnson ,
1 9 8 7 ; S p e n d e r , 1 9 89 ) .
V a l ue , o r r a th e r pe rce i ved va l ue , c an b e t rans la ted in to m o n e ta ry te rms : it c an b e
d e fin e d as th e p r i ce th e cus tomer is p r e p a r e d to p ay fo r th e p r oduc t, if th e r e was a s ing le
sou rce o f supp l y (Col l is, 1 9 94 ) . Th is j u d g e m e n t is b a sed o n th e assessmen t o f th e p r oduc t’s
va l ue , c oup l e d wi th th e i nd iv idua l’s w i l l i ngness to p ay . These m o n e ta ry j u d g e m e n ts c a nno t,
th e r e fo r e , b e m a d e in iso la t ion f rom th e w i de r n e eds a n d econom i c c i rcumstances o f th e
customer .
O n ly i n th e r a r e i ns tance o f a monopo l y supp l ie r , w h o is cogn i san t o f th e cus tomers’
va l ua tio n , a n d w h o can p r i ce d iscr im ina te wi l l th e p r i ce th e cus tomer is p r e pa r e d to p ay ( in
w h a t fo l l ows th is p r i ce is te r m e d ‘to ta l m o n e ta ry va l ue’) e q u a te to th e p r i ce th e cus tomer
ac tua l l y pays . In a l l o th e r c i rcumstances, th e p r i ce pa i d wi l l b e less th a n th e to ta l m o n e ta ry
va l ue pe rce i ved by th e customer . T h e d i f fe rence b e tween th e cus tomer’s va l ua tio n o f th e
p r oduc t, a n d th e p r i ce pa i d is ‘c onsume r su rp l us ’ . E xp ressed dif ferent ly, th e p r i ce th e
cus tomer is p r e pa r e d to p ay equa l s to p r i ce + c onsume r surp lus. C o n s u m e r su rp l us ( B ach
e t al., 1 9 8 7 ; W h ite h e a d , 1 9 96 ) is w h a t c onsume rs co l l oqu ia l l y ca l l va l ue fo r m o n e y .
Cus tome r s choose th e g o o d th a t wi l l c on fe r o n th e m th e la rgest c o nsume r surp lus.
T h e chosen p r oduc t m u s t th e r e fo r e b e d i f ferent ia ted in ways wh i ch a r e va l ued by th e
customer , it m u s t de l i ve r m o r e c onsume r su rp l us th a n a l ternat ives. ‘V a l ue fo r m o n e y ’ can
b e i nc reased by e nhanc i n g th e pe rce i ved va l ue o f th e g o o d ( a nd th e r eby i nc reas ing its to ta l
m o n e ta ry va l ue , th e a m o u n t th e cus tomer wou l d b e p r e pa r e d to p ay fo r it), whi lst k eep i n g
th e p r i ce a t th e s a m e level , o r by keep i ng th e pe rce i ved va l ue cons ta n t b u t r educ i ng th e
pr ice, o r by d o i n g b o th sim u ltaneous l y .
The amount of consumer surplus that a customer can enjoy can only be assessed at
the point of sale (it is at this point that the customer knows the selling price, he can value
the product and decide then whether it is worth buying). Customers can only value what
they perceive, this implies for instance that they are unable to value most inputs to the
production process. This means that customers cannot consciously ‘reward’ or compensate
any inputted resources, or any suppliers of those resources (we take up this point later). We
could note here that this is different from other approaches, notably Hunt’s, who states that
perceived value “depends on (a) the tastes and preferences of consumers in the segment and
(b) the resources that produce the offering” (1995:323) (emphasis added).
One consequence of this argument is that value cannot be ‘passed on’ in the
production process: value is perceived by the customer at a point in time, it is assessed at
the point of decision to purchase. This applies to all types of purchases, for example, the
value of a numerically controlled lathe, a computer, or a truck is also realised at the point
of purchase. It is not transferred into the organisation’s production or distribution process.
It is an accounting convenience to assume that the values of inputs are passed on to
customers. In reality many purchased resources do not ‘add value’ in ways that a customer
can perceive. That is not to say that the purchased input was not valued. It was. It was
valued by the manager who decided to buy it on behalf of the firm, but as soon as the
machine was bought, all its value was realised.
Another implication of this discussion is that any firm, that is able to sell something,
is, in the eyes of its customers at one particular point in time supplying a unique and
superior package of value for money, i.e. customers at this point in time perceive that the
firm allows them to enjoy the largest amount of consumer surplus. From the customers
custom ers, the com petitors are not supplying an equivalent product/price com bination. In
this restricted technical sense, each firm is a m onopoly supplier to its custom ers at the tim e
of the sale. Hence, it could be said that any firm that sells anything has a tem poral
‘com petitive advantage’.
Clearly, som e custom ers will have found it quite difficult to m ake a choice; there
m ay be products on offer which offer very sim ilar amounts of consum er surplus to the
chosen product. These suppliers of close substitutes would constitute the direct com petitors
to the firm . However, products offering significantly lower surplus could not be classed as
close substitutes, and are therefore not credible com petitors. This view of ‘value’ helps us
define com petitors, and hence m arkets and industries. This m ay lead to quite different
industry definitions from those derived from conventional, product-based approaches.
M arkets are never static. They exist at a m oment in tim e when a transaction takes place.
Indeed, it m ay be unhelpful to conceive of ‘m arkets’ at all as this can imply som e
perm anence or stasis in what is a dynam ic, atom istic and continuing evolving set of
individual transactions.
Value is realised when a sale is made 2. Sales are achieved when customers view that a
product confers more consumer surplus than other viable alternatives. So firms create value
through the production and sale of products.
In line with RE3T arguments, if all inputted resources are homogeneous, and freely
traded, competing firms will produce identical products, incurring identical costs of
production. Thus all firms in this market would produce identical amounts of value. This
equates with neo-classical perfect competition.
However as argued above, in order for a firm to sell anything, there must be some
buyers that rate the firm’s offering as providing superior consumer surplus than competing
firms’. So even if the prices are identical, in order to make a sale there must be some
perceived differences in the products on offer. This might have to do with the product
surround rather than the product itself (i. e. the product is readily available locally, it is
marketed more attractively etc.). Alternatively, one can have more consumer surplus
because of a lower price, and to sustain lower prices the firm must be able to produce the
same products as competitors but at lower cost.
This implies that the source of differential consumer surplus must be somewhere
within the transformation processes inside the firm. If factor markets are homogeneous, this
can only occur if certain resource inputs are capable of performing heterogeneously within
the production process, otherwise we have to relax our assumptions of perfect factor
* The exchanges of valuable goods that do not involve a monetary transaction are without the scope of most
forms of economic enquiry.
- -
Proponents of RBT argue that human or ‘cu ltural’ resources are the sources of
above normal returns, not purchasable and tradable phys ica l assets (Castanias and Helfat,
1991; W ernerfelt 1989; Barney, 1986a). Inanimate objec ts are incapable of transforming
themselves into anything other than what they are, they need to be activated, worked on
before they can contribute to the provis ion of va lued products in. This suggests that the
sources of positive differential va lue derive from the actions of labour (Lad0 and W ilson,
1994; Pfeffer 1995; W r ight, McMahan and McW illiams , 1994). Even though labour may
be traded assuming its homogeneity , it has the capacity to be var iable in action. This
implies that labour is the source of firm heterogeneity and hence can be the source of va lue.
However labour can create differential va lue only if it performs heterogeneously. Indeed
homogeneous labour3 work ing with homogeneous resources can only produce
homogeneous products.
How can we judge which sources of heterogeneity are va luable? There is ample
ev idence of firms with s trong cu ltures , with powerful and idiosyncrat ic ‘ways of doing
things ’ that have failed (Peters, 1988). Indeed ‘organisational inertia’ (Collis , 1991) and
most of the blockages to s trategic change seem to s tem from the embedded routines and
cu lture (that in effec t have become ‘core r igidities ’ (Leonard-Barton, 1992) of the
organisation. It is the judgements about how labour should heterogeneously perform that
are the ultimate source of differential va lue, i.e. it is the artful deployment of labour, w ith
other resources, that it is the source of va lue. In other words it can be argued that it is the
s k ill in knowing what resources to deploy , what resources to combine and how, and the
judgements about what va lues should be attached to products, and for what markets, that is
3 Some sk ills are generic, some abilities deliver output that are measurable and that can c learly be imitated
such as, to c ite just a few, phys ica l strength, speed of typing or report wr iting sk ills.
the source of value differentials. This skill is often referred to as business acumen or
entrepreneurial flair, and to use Miller and Shamsie’s vocabulary (1996) it is a ‘systemic
knowledge-base resource’ or to use Black and Boal’s (1994) a ‘system resource’. As this
entrepreneurial resource is typically hired in any established business, artful deployment
could be regarded as a qualitative variant of hired labour. We shall refer to this source of
differential value as the art&Z deployment of resources. It is a quality within the firm that
enables it to differentiate its products, and/or to lower its relative costs. So when a sale is
made it is the result of a temporal advantage created by the actions of heterogeneous
labour, artfully deployed.
To highlight this point and to refer to the idea of ‘core competences’ of the firm
(Prahalad and Hamel, 1990), core competences are not the source of differential value. It is
the artful deployment of competences, not the competences per se, that matters. The same
argument applies to other ‘valuable resources’ like brands, or reputations. A brand is only
a source of profit if it is artfully deployed. This can be seen in cases where a brand has
enjoyed a resurgence under different management (Rowntree’s confectionery brands under
the management of Nestle; Miller beer under the management of Philip Morris). In many
respects this is in the spirit of what Penrose wrote in 1959 (and highlighted recently by
Tsoukas (1996) and by Grant (1996) emphasising that what mattered was coordination so
far as to achieve knowledge integration): “it is never the resources themselves that are the
inputs to the production process, only the services that the resources can render” (1959:25).
Artful deployment is the skill of entrepreneurship. Blaug remarks upon “the strange
disappearance of the entrepreneur from the centre stage of economic theory” (1985:459).
The entrepreneur is treated in most mainstream texts as a fourth factor of production,
behind land, labour and capital. The arguments advanced here would place the
entrepreneur, or more precisely entrepreneurial behaviour (Lumpkin and Dess, 1996), at
the heart of the value creating process. The Austrian school (Jacobson, 1992; Kirzner,
1992)) and Schumpeter ( 19 12) in particular, take a similar view. Schumpeter ( 19 12) places
entrepreneurship and its connection with dynamic uncertainty at the centre of economic
inquiry, viewing the entrepreneur as the source of all dynamic change in an economy.
So far we have concentrated on trying to understand what value is, and how it is
created. To summarise: value is perceived by the customer and all purchases are
subjectively assessed, even purchases of resource inputs. Moreover, in order for a firm to
make a sale a customer must perceive that the firm offers more consumer surplus than
competing firms. Hence all firms that sell anything possess a temporal advantage. Value or
consumer surplus is created by the artful deployment of the heterogeneous actions of labour
with other resources.
Artful deployment can have both explicit and tacit aspects. Explicit artful deployment
encompasses entrepreneurial flair, the ability to spot a business opportunity and knowing
how to exploit it. It includes differential capabilities in resource procurement (so maybe the
firm can buy cheaper), resource deployment (we manage, combine our resources more
efficiently), and value creation (we know how to make and sell better products).
Tacit artful deployment refers to a situation where resources are being deployed in
effective and efficient ways, but this skilful performance is not the result of a consciously
developed set of rules or the result of a clearly understood organisational routine (Nonaka,
1991, 1994; Reed and DeFillipi, 1990). The firm just happens to be doing the right things,
it does not know exactly what causes its success. In other words the relation between its
actions and its performance is causally ambiguous (Lippman and Rumelt, 1982). This could
be due to chance, or to deeply embedded cultural know-how that no single individual is
able to explicitly recognise or articulate (Nelson and W inter, 1982; Spender, 1994). So to
refer again to Barney’s (1986b) argument, special insights into the future value of a
strategic resource would be an example of explicit artful deployment; luck or good fortune
may be an example of tacit artful deployment.
In all firms there are probably elements of explicit and tacit artful deployment. In
old established firms, where the original founders have long since left the scene, artful
deployment may consist of some cultural momentum built up over the years (Fiol, 1991).
The more tacit the artful deployment the more secure the firm is in one sense: if the firm’s
management do not understand what makes them successful, then others are less able to
imitate them. As Lippman and Rumelt (1982) argue causal ambiguity “acts as a powerful
block on both imitation and factor mobility” (1982,420) but the management of the firm
becomes riskier. If we do not know what causes success, we may inadvertently change
something that is critical (e.g. through delayering, downsizing, or the crude imposition of
business process reengineering). Similarly, if we are not knowledgeable of sources of past
success, and of impediments to future success, we cannot know either what to change, or
what to change it to.
So, because of causal ambiguity, it could be that the demise of firms is more to do
with not knowing exactly what to change and what to change it to, than with any structural,
or cultural rigidities. It takes a confident and knowledgeable executive to challenge and
change embedded routines. Executives ‘generated’ through the firm’s culture may not be
for granted. For this reason, executives that emerge from within are unlike ly to be fully
aware of, to explic itly know the sources of artful deployment, and hence are like ly to be
unable to manage its evolution. This may partly explain why, when faced with a downturn
in performance, the typ ica l ‘knee-jerk ’ reaction is to cut costs (Bowman and Ambrosini,
1996). Cost cutting hardly ever const itutes an artful deployment of resources. It is often a
programmed response to a c r is is , taken without tak ing into account the true sources of the
firm’s current and poss ible future profit.
Moreover, if tac it deployment is at the origin of the firm’s advantage then, crude
cost cutting runs the r is k of destroying the ve ry sources of future profitability . There are
cases where the incumbent executives, ‘managerially ’ competent but lac k ing flair and
ins ight, are incapable of making the difficu lt entrepreneurial decis ions required, or other
cases where quite the wrong understanding of the source of advantage obtained, as when
Coca Cola launched their new formula Coke.
Tac it artful deployment is enacted in the spec ial way certain tas k s get performed:
the way a particu lar sa lesman se lls , or a designer designs . So tac it artful deployment is
most like ly to be performed by hired employees. W hereas the archetypal entrepreneur is an
indiv idual w ith ins ight, marshalling land, labour and capital for the greater good of soc iety ,
in practice entrepreneurial behaviours are performed by hired managers. So whether artful
deployment is explic it or tac it, it tends to be performed by hired employees.
Hav ing set out an explanation of va lue, and its creation, we now turn our attention
to the capture of va lue.
Peteraf distinguishes between the existence of rents and economic profits: “the existence of
Ricardian rents is not sufficient for the firm to earn above average returns.. . .If the resource
is not owned by the firm and the firm cannot appropriate some of the rents only the
resource owner will benefit” (1994: 156). This neatly juxtaposes the difference between
value creation and value capture. Resources may be capable of producing positive value
differentials, but if the resource owner is able to capture this value and the owner is not the
firm, firm profitability is not affected.
Despite this important distinction between creation and capture, most contributors to
the resource-based school focus their attention on barriers to imitation at the level of
competing firms, rather than on the problems of retaining value within the firm. Their main
concern is with the processes of capturing value from customers. Rumelt’s isolating
mechanisms ( 1984)) Dierickx and Cool’s ( 1989) time compression diseconomies to
imitation, and the increasing returns to the cumulative magnitude of the stock of the input,
and Lippman and Rumelt’s (1982) causal ambiguity are all addressing the problems of
value capture from customers. But, as Peteraf (1994) points out, there is no benefit to the
firm if the value captured from customers is lost through resource suppliers bidding up the
price of their resources to the point where they capture the differential value won from
Porter (1991) highlights the issue of value capture in RBT: “successful firms are
successful because they have unique resources. They should nurture these resources to be
the value away. 7” (199 1: 108). Barney’s (1986b) response to this last question is to suggest
that, in strategic factor markets, firms competing for strategic resources have different
expectations about a resource’s value. As a result they will be prepared to pay different
amounts for the resource. The “special insights into the future value of strategies” (Barney
1986b: 1232) that the bidding firm has, enables it to acquire valuable resources at low
prices; or alternatively, through good fortune (‘luck’), the firm happily discovers that a
resource has considerably more value than anticipated when it was purchased.
We argue that value capture from customers is determined by the bargaining
relationships between the firm and the customer. The presence of close viable substitutes
reduces the firm’s ability to capture value in the form of high prices; because the customer
can exercise choice this enhances his bargaining power.
The availability of close substitutes reduces prices and increases consumer surplus.
The ease with which other firms can compete with close consumer surplus offerings will
depend upon how easily they can amass the resources required to replicate, imitate or
surpass the firm’s position. The more unique the resources employed by the firm, the easier
it is for the firm to bid up its prices and capture more value. These resources are the source
of heterogeneous value creation. Moreover, as we argued earlier, they cannot be
commodities themselves i.e. homogeneous and freely traded. Only resources capable of
heterogeneity can be a source of heterogeneous value creation, and, the only resource
capable of this variability is labour.
How much of the captured value is retained by the firm? This depends upon the
bargaining power of the resource suppliers: if suppliers are cognisant of their resource’s
value-creating contribution and they can ‘hold up’ the firm, then they are able to capture a
larger share of value (Kotowitz, 1989; Will iamson, 1975). Porter argues as follows:
“. . valuable resources, in order to yield profits to the firm, have been acquired for less than
their intrinsic value due to imperfections in input markets” (1991: 108).
Note that it is quite possible that a resource supplier captures a proportion of value
far in excess of that resource’s true, essential, contribution to the value creation process,
and, of course, some resource suppliers will find themselves capturing far less value than
they actually created, because of their weak bargaining power. This is a powerful example
of the difference between essence and appearance. We shall now examine the differences
between the appearance and the essence of relationships between the firm and two factors
of production: suppliers of labour and suppliers of capital.
Value Capture: Suppliers of Labour
Although the actions of certain types of labour are the sole source of differential value
(Pfeffer, 1995)) the value that this labour creates is not usually captured by the sellers of
the labour. This is because of the nature of the market for most types of labour. If it is in
abundant supply, i. e. there are many very close substitute suppliers, then the bargaining
power of the seller of labour is negligible. However, although both the seller and buyer of
labour may perceive that the purchased contribution is homogeneous, as we have argued,
the labour in action in the specific context of the firm becomes heterogeneous (Conner,
1991). This masks the true contribution of labour. It also explains why labour power is the
resource that is sold by the employee; labour is sold in a form which disguises its variable
contribution. The employer contracts to hire labour hours, a fixed amount that can be
priced (per hour, day, week, month etc.). Once hired, the variable contribution of labour is
manifested. So what was in appearance a contract to supply a fixed amount of labour,
becomes in essence an opportunity for the employer to extract a variable amount of value.
Ho l d u p d oes n o t occu r usua l l y b ecause th e con t r ibut ion o f speci f ic l a bou r is
obscu r ed . T u s h m a n a n d Ne l son exp l a i n th a t “techno l og i ca l c h a n ge o p e r a tes to f r a gmen t
wo rk , desk i l l l a bou r , a n d re in fo rce th e p owe r o f th e ex is t ing bu r eauc racy” ( 1 9 90 : 1 ) . T h e
d iv is ion o f l a bou r a n d th e g loba l i sa t i on o f p r o duc tio n r e nde r it a lmos t imposs i b l e to d r aw
l inks b e tween th e ac tio ns o f th e i nd iv idua l se l le r o f l a bou r a n d a va l ue g e n e r a tin g o u tp u t.
A s B l aug exp la ins : “th e e m p l o y m e n t c on tract u n de r cap i ta l ism is i n fac t ‘i n comp l e te ’ in th e
sense th a t it s t ipu lates th e r a te o f p ay fo r l a bou r , a n d th e hou r s o f wo rk o f l a bou r , b u t fa i ls
to lay d o w n th e intensi ty o r qua l i ty o f th e l a bou r th a t is to b e pe r fo r m e d . G iven th e
cha rac te r o f p r o duc t ive p rocesses, it is on l y ra re ly th a t it is poss ib l e to a ttr ibute o u tp u t to
i nd iv idua l workers ; h e nce tim e wages a r e m u c h m o r e c o m m o n th a n p i ece wages”
( 1 9 8 5 :2 43 ) . B u t th e con tract to supp l y l a bou r p owe r is necessa r i l y i n comp l e te . L eav i n g
de l i be ra te ly v a gue th e con t r ibut ions o f th e se l le r o f l a bou r p owe r a l l ows o the r
in te rp re ta t ions o f th e essen tia l re la t i onsh ips b e tween th e emp l oye r a n d th e emp l o y ee .
The r e a r e c i r cumstances whe r e th e se l le r o f a pa r t icu lar type o f l a bou r is
p a r t icu lar ly awa r e o f its u n i q ueness a n d is consc ious o f th e lack o f pe rce i ved c lose
subs titu tes . E xamp l es wou l d b e mov i e stars, to p sa les p eop l e , a n d m a y b e s o m e p r o fessors!
In th e se cases th e se l le r o f l a bou r is i n a s t rong pos i t i on to ba r ga i n u p th e p r i ce o f the i r
l a bou r .
Howeve r i n m a n y cases th e con t r ibut ion o f se l le rs o f l a bou r is n o t eas i ly v is ib le. It
is n o tab ly th e case fo r i nd iv idua ls th a t wo rk as pa r t o f a te a m , whe r e th e c omb i n e d resu l t o f
i nd iv idua ls’ con t r ibut ions is g r e a te r th a n th e s u m o f e ach con tr ibut ion. Th is m e a n s th a t
va l ue is c r ea te d by th e te a m a n d n o t by th e i nd iv idua ls as such . It is diff icult fo r a n
i nd iv idua l se l le r o f l a bou r to s ee a n d s how th a t h is c on t r ibut ion is a d i f ferent ia l abi l i ty. S o ,
th e r e is a d i f fe rence b e tween essence a n d a p pea r a n ce . T h e a p pea r a n ce is o f th e se l le r o f
labour being grateful for the job offer. The essence of the relationship is almost the reverse.
W ithout the contribution of labour, the firm’s owners do not make profits. Hence, the
essential relationship is the labour seller donating profits to the firm owner(s). So to
summarise, it is the nature of the employment relationship, the trading of labour power not
labour output, and the appearance of homogeneity of labour power that enables the firm
owners to capture value created by the sellers of labour power. Maybe is it worth
commenting that according to Aoki (1990) in Japanese corporations the value contribution
of employees is seen in balance with that of resource suppliers, this could indicate that a
shift from appearance to essence, i.e. to true relationships, may be possible.
To return to Barney’s ( 1986b) arguments concerning strategic factor markets, even
where all competing firms are aware of the value generating capability of labour, the price
of that labour is not bid up because it is in relatively abundant supply. It is only where
certain types of labour are perceived by buyers and sellers as distinct and heterogeneous
that a bidding process ensues (e.g. transfers of football stars).
It is important to note here that we are not making any distinctions between different
classes of labour. Whether the labour power being sold is unskilled, skilled, managerial,
involving physical work or ‘knowledge’ work is not important. The important relationship
is between the seller of labour power and the purchaser of that labour power. The
purchaser is the firm owner (or the shareholders), who may use hired agents (managers) to
recruit, direct and control employees. Further, as we argued earlier, not all labour adds to
total value. Some labour is employed in activities that are solely concerned with value
capture, not value creation. Examples would be supervisory activities (to extract more
value from the employee), and negotiating with resource suppliers (to secure lower input
1 . w
.X I
V a lue C a p tu r e : Supp l i e r s o f Cap i ta l
In m a ins t ream econom ics tex ts th e supp l i e rs o f cap i ta l c ap tu r e a sha r e o f va l ue e i the r i n th e
fo r m o f interest p a y m e n ts, o r i n th e fo r m o f d i v i dends o r g r ow th o n the i r e qu i ty
sha reho l d i ngs . Va r i o us theo r i es h ave b e e n a dvanced to exp l a i n h o w a n d why th ese
supp l i e rs o f cap i ta l r ece ive the i r s ha r e o f va l ue . S a m u e l s o n a n d No r d haus n e a tly, th o u g h
pe r h aps i nadve r te n tly, s umma r i s e th e con fus i on : “to th e e conom i s t, p r o fits a r e a
h o d g e p o d g e o f d i f ferent e l e m e n ts” ( 1 9 8 5 : 6 6 0 ) .
P ro fits a r e v i ewed : as impl ic i t r e tu r ns ( r en ts, r e n ta ls a n d wages d u e to r esou rces
o w n e d by th e firm ); as a r ewa r d fo r r isk bea r i n g ( d e fau l t r isk, a n d p u r e stat ist ical r isk); as
a r ewa r d fo r i n nova tio n a n d e n terp r ise; as monopo l y r e tu r ns ( the excess r e tu r n g a i n e d by
s o m e o n e w h o has ma r k e t p owe r ) ( S amue l s o n a n d No r d haus , 1 9 85 ) . S im i la r l ists a r e
p r o ffe r e d by o the r tex ts ( e .g . B a u m o l a n d B l inder , 1 9 85 ) . M cGu i g a n , Moye r a n d Har r i s
( 1 996 ) a d d fr ict ion theo r y (“th e inab i l i ty o f o u r e conom i c system to ad j us t i ns tan taneous ly
to c hanges in ma r k e t cond i tio ns” 1 9 9 6 :7 ) a n d th ey a l so a d d th a t p r o fits a r e r ewa rds to
excep tio na l m a n a g e m e n t ski l ls. P ro fits h ave a l so b e e n exp l a i ned in th e pas t as r ewa rds fo r
a bs ta i n i ng f rom cu r r en t c o n s ump tio n .
In m o s t m a ins t ream tex ts th e r e is n o a tte m p t to eva l ua te th e se c o m p e tin g theo r i es o f
p r o fit. They a r e typ ica l ly dea l t wi th i n a n add i t ive way . In o the r wo r ds , a l l th e se theo r i es
a r e d e e m e d to b e cor rect i n th a t th ey ‘exp l a i n’ d i f ferent p o r tio ns o f p r o fit. Th is p ro jects a
ve ry con fu sed p icture.
A c o m m o n th e m e in th e se theo r i es is th e n e e d to exp l a i n p r o fits as s o m e sort o f
r ewa r d fo r s o m e th i ng th a t is d o n e fo r th e g o o d o f e conom i c society. W h o consc ious ly g ives
th e r ewa r d is unc l ea r , as th e on ly sou rce o f cash to fu n d th e r ewa rds flows from customers .
Perhaps they are rewarding on behalf of society. Nonetheless, even if we accepted the
notion of profits as a ‘reward’, and if we agreed that it was paying customers that conferred
the reward, how can this come about? Customers can only reward what they perceive.
They only usually perceive the finished product, the resources that were combined to
deliver it are usually invisible, so they cannot be consciously rewarded. Moreover, are we
rewarding the resource itself (the machine), the owner of the resource (the ‘firm’, or the
shareholders?), the money capital that was loaned to buy the machine (loan finance), or the
person who loaned the money? The notion of an inanimate object being rewarded is fairly
absurd, but this does not trouble some economists.
W ithin resource-based theory the language used takes the form of ‘rents’ rather than
‘profits’ (Rumelt, 1987). If we were hoping for some more clarity in this stream of
contributions we would be disappointed because the meaning of ‘rent’ differs across authors
(Schoemaker, 1990) and for instance, Peteraf (1994) lists ten different types of rents: pure
economic, quasi, appropriable quasi, Ricardian, land, inframarginal, efficiency,
differential, entrepreneurial, managerial.
Do we need to distinguish between capital that is advanced as an equity stake from
that advanced in the form of fixed interest earning debt? Both suppliers of capital can
capture a share of value; the difference is the lender of debt knows his share in advance.
For instance firm owners can borrow all their capital from banks, which is why interest can
be regarded as a deduction from the ‘profits’ of enterprise (Blaug, 1985). So the financing
structure has an impact on value capture, but does it affect the creation of value? This
largely depends on the ability of the firm to fund investments itself. The entrepreneur who
is self financing concedes no portion of value to external parties (shareholders or lenders),
so it is only where the entrepreneur deems it necessary to invest at a rate that cannot be
sustained from his own funds that external fund providers enter the picture.
This explains a seem ing paradox in our argum ent. We suggested that sellers of
labour are usually unable to capture m uch value because they are perceived by both parties
as selling a hom ogeneous com m odity in abundant supply (labour hours). But if we apply
the sam e argum ent to suppliers of capital, how is it that they are able to capture value?
Suppliers of m oney capital are providing a com pletely hom ogeneous resource. Indeed there
is nothing m ore hom ogeneous than cash, it is an essential quality that m oney m ust possess.
Using argum ents about resource substitutability, suppliers of a com pletely
hom ogeneous resource should capture equal and very low amounts of value. If they receive
m ore than som e m inuscule return this m ust derive from their bargaining power. But again,
if they supply a com m odity, how can they bargain up the price of the m oney they lend? It
m ust be not because the resource supplied is heterogeneous (because it isn’t); it m ust be
because it is in controlled supply. Owners of spare cash that can afford to risk are usually
facing a sellers’ m arket. So although the physical contribution of m oney capital is
hom ogeneous, its restricted supply gives its owners power to capture a share of the value
created by the firm .
RBT focuses on economic profits (rents). These are profits that are in excess of
those levels that are deem ed ‘norm al’. Norm al profits include returns to suppliers of capital
(i.e. interest paym ents). These rewards to suppliers of capital m ust be sufficient to persuade
the owners not to take their capital elsewhere. However, super-norm al profits can only be
defined relatively, whereas profits could be defined absolutely (they are either realised or
they are not realised). Here we get another source of confusion. Because super-norm al
profits are a relative concept, we need to have som e benchm ark to assess them against. The
concern initially amongst industrial economists was to assure themselves that allocative
efficiency across society was being achieved. This theorising relies on the neo-classical
assertion that an efficient allocation of resources occurs where price is equated with
marginal cost. Any market structures where this does not persist are ergo inefficient, hence
to find these markets we need to define the boundaries of an industry. We also need to be
able to measure firm performance in a way that reveals exploitative levels of profit. Often
the convenient industry definitions chosen for these industry studies are product driven, but
they would not necessarily make sense in our subjectively defined market environments.
Thus, with regard to suppliers of capital, the essence of the relationship with the
firm is that they supply a completely homogeneous resource, which is not capable of
generating value. However because the resource they provide is in scarce supply, they are
able to bid up the price of capital and capture larger proportions of value. The appearance
is that suppliers of money capital create value. This is compounded ideologically with the
notion of risk, and ‘rewards’ for risk bearing. But there are few personal risks involved,
even if the investments yield nothing. The money is risked, the person who loans or invests
it usually has other sources of income, and a varied portfolio of investments.
The contribution of this paper is an integration of several extant bodies of theory into a
coherent explanation of value creation and value capture. We have tried to clarify a theory
of value, and by distinguishing between the creation of value, and the capture of value it
has developed further insights into the resource-based perspective. We argued that value is
subjectively assessed by the customer and that consumer surplus is the criterion used by the
custom er in m aking purchase decisions. Entrepreneurial skill is required to identify and
produce valued products at low resource cost. We have also suggested that when a firm
sells to a custom er a tem poral advantage situation prevails and, if costs are skilfully
m anaged profits result from this situation. Resources per se are not the source of profits; it
is their artful deploym ent that m obilises them to exploit m arket opportunities in cost
efficient ways that is the source of tem poral m onopoly profits.
M arkets are dynam ic and unpredictable. As inform ation becom es m ore widely
available, com petitors can expand their dom ains at the expense of the firm , through
imitation, or by exploiting new innovations. This implies that artful deploym ent is a
dynam ic skill, which helps the firm to adapt to changing conditions. Where artful
deploym ent is tacit the firm is at risk of either unwittingly destroying a source of value, or
by its inability to know what to change, and what to change it to.
Although artful deploym ent is the source of value, bargaining relationships
determ ine the capture of value. P rofit is value captured by the firm . This includes pure
profit (econom ic profit), supranorm al profit, and interest. Although heterogeneous labour
in action produces valued products which are the source of profits, the suppliers of this
resource capture only a fraction of the value they create.
The strength of the preceding argum ents lies in the fact that econom ic decisions are
m ade on the basis of knowledge which it is reasonable to assum e each actor m ight possess.
The value of products is assessed subjectively, based on the buyer’s perceptions of his
needs and the extent to which alternative products m ight m eet those needs. Decisions about
the procurem ent of inputs into a production process are based on beliefs about the
usefulness of the resource in the value creation process.
These propositions are in contrast to other forms of theorising. Neo-classical
economics requires us to assume that entrepreneurs are cognisant of their firms cost curves,
and the demand schedules of the customers in a market place. Transaction cost economics
suggest that decision makers are aware of the relative costs of performing activities within
hierarchies, or to establish market-based contractual arrangements. Experience of managers
and executives operating in the real world strongly suggests that these assumptions may not
hold. Despite some progress which has inched the theory of the firm closer to reality e.g.
the contributions of Simon, and Cyert and March, vast tracts of economics activity in
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List No 6, 1992
SWP l/92 Mike SWCCJIC~ “How to Pcrfom Simultaneous Proms Engineering”
SWP 2/92 Paul Burns “Tk MiIl~agclllellt of Gcncral Pri~cticc”
SWP 3/92 Paul Burns “MilllagCI1ICIIt in General Practice: A Sclcct ion of Articles”
SWP 1/92 Simon KJIOX Kr Da\*id Walker “Consumer I~n~olvc~nc~~t with Groccq Brauds”
SWP 5/92 Deborah Hcll~~i~ll & Adrian Pi~>~I~c “lntcrn;~l Marketing: M>?h versus Rci~lit>~‘?”
SWP 6/92 Lcslic dc Cllernatony 8r. Sinloll KJIOX “Brand Price Rccilll and the Implici~tions for Pricing RCsCiIrcll”
SWP 7/92 Shai V>~akarJ~all l “Social Responsibility in the UK Top 100 COJll~ilJl i~S”
a -
SWP 8/92 SIJS~JI Baker. Simon KJ~OS & Lcslic dc Chcrnatong “Product Attributes and PersoIlaI ValuCS: A Review of Mcillls-EIld Tl~orl\r alld Consumer Bcha\~iour”
SWP 9/92 Mark Jenkins “Making SCJLSC of Markets: A Proposed Research AgcJlda”
SWP lo/92 Mike S\\CCIIC!~ & Ian Orillll “Informatiou TccI~J~oIo~~ for MilllagClllCllt Education: The Bcncfits and Barriers”
SWP 1 l/92 Keith Tl~o~npso~~ (Silsoc College) “International Compctiti\wcss and British Industry post-1992. With Special Rcfcrcncc to the Food Industq*”
SWP 12/92 Keith Tl~o~npso~~ (Silsoc Collcgc) “The Respo~~sc ol‘ British Supcrnwkct COJH~i~Jl iCS t0 tllC IJ~tC~J~i~tiOl~i~liSariolr Of tllC Retail Groccqr Industq*”
SWP 13/92 Richard Kay “The Metaphors of the Voluilt;~il\~/NOl~-PrO~t Sector Orgi~lliSiJg”
SWP l-l/92 Robert Brown & Philip Poh “Aniko Jewellers Private Limited - Case Stud> and Teaching Notes”
S WP 1 Y92 Mark Jenkins & Gerry Johnson “Representing Managerial Cognition: The Case for an Integrated Approach”
SWP 16/92 Paul Burns “Training across Europe: A Survey of Small and Mediunl-Sized Companies in Five European Colmtries”
SWP 17/92 Chris Brewster & Henrik Holt Larsen “Human Resource Management in Europe - Evidence from Ten Countries”
S WP 18/92 Lawrence Cummings “Customer Demand for ‘Total Logistics Management’ - Myth or Reality?”
SWP 19/92 Ariane Hegewisch & Irene Bruegel “Flesibilisation and Part-time Work in Europe”
SWP 20/92 Kevin Daniels & Andrew Guppy “Control, Information Seeking Preference, Occupational Stressors and Psychological Well-being”
SWP 2 l/92 Kevin Danicls & Andrew Guppy “Stress and Well-Being in British University Starr’
SWP 22/92 Colin Armistead & Graham Clark “The Value Chain in Service Operations StriItC~”
SWP 23/92 David Parker “Nationalisation. Privatisation, and Agency Status within Government: Testing for the IJllpOJti1l~Ce Of Ownership”
SWP 2492 John Ward “Assessing and Managing the Risks of IS/IT In\*estnients”
SWP 2392 Robert Brown “Staplcford Park: Case Study and Teaching Notes”
SWP 26/92 Paul Burns & Jean Harrison “Management in General Practice - 2”
SWP 27/92 Paul Burns & Jean Harrison “Managcmcnt in General Practice - 3”
SWP 28/92 Kevin Danicls. Leslie de Chcrnatony & Gerry Johnson “Theoretical and Methodological lssucs concerning Managers’ Mental Models of Competitive Industry Structures”
SWP 29/92 Malcolm Harper & Alison Ricplc “Es-Offcndcrs and Enterprise”
SWP 30/92 Colin Armistead & Graham Clark “Service Quality: The Role of Capacity Management”
SWP 3 l/92 Kevin Danicls & Andrew Guppy “Stress, Social Support and Psychological Well-Being in British Chartered AccotII\ti1I1ts”
SWP 32/92 Kc\in Daniels & Andrew Gupp! “The Dimcnsionality and Well-Being Correlates of Work Locus of Control”
SWP 33/92 David Ballantyne, Martin Christopher, Adrian Payne and Moira Clark “The Changing Face of Scnice Qualit> Maxlgemcnt”
SWP 31/92 Chris Brwster “Choosing to Ad-just: UK and Swedish Espatriatcs in S\\‘cdcn alld tllc UK”
SWP 35/92 Robert Brown “Goldsmiths Fine Foods - Case Study and Teaching Notes”
SWP 36/92 Mike Sweeney “Strategic Mamlfacturing Managcnlcnt: Restructuring Wasteful Production to World Class”
SWP 37/92 And), Bailey 8t Gerry Johnson “An Intcgratcd Exploration of Strategic Decision-Making”
SWP 38/92 Chris Brewster “European Human Resource Mimagcmcnt : Reflection of. or Challenge to. the American Concept”
SWP 39/92 Ute Hanel. Kurt Volker. Arianc Hegwisch & Chris Brcwstcr “Personnel Managcnlcnt in East Gerlnan!”
SWP JO/92 Lawrence Cummings “Logistics goes Global - The Role of Pro\*idcrs and Users”
SWP 42/92 Susan Segal-Horn “The Logic of International Growth for Service Firms”
SWP 13192 Mike Sweeney “Benchmarking for Strategic Manufacturing Management”
SWP 44/92 Paul Burns “Financing SMEs in Europe: A Five Country Study”
SWP 15/92 Robert Brown “The Graduate Enterprise Programme - Has it been Worthwhile’?”
SWP l/93 John Mapes “The Effect of Limited Production Capacity on Safety Stock Requirements for Periodic Review Inventory Systems”
SWP 2/93 Shai Vyakarnam & Alison Rieple “Corporate Entrepreneurship: A Review”
SWP 3/93 Cliff Bowman & David Faulkner “Pushing on a String: Uncertain Outcomes from Intended Competitive Strategies”
SWP -l/93 Susan Baker & Mark Jenkins “The Role of Values in the Design and Conduct of Management Research: Perspectives on Managerial and Consumer Cognition”
SWP 5/93 Kevin Danicls. Leslie de Chernatony & Gerry Johnson “Validating a Method for Mapping Managers’ Mental Models of Competitive Industry Structures”
SWP 6/93 Kevin Daniels & Andrew Guppy “Occupational Stress, Social Support, Job Control and Psychological Well-Being”
SWP 7/93 Colin Fletcher, Ruth Higginbotham & Peter Norris “The Inter-Relationships of Managers’ Work Time and Personal Time”
SWP 8/93 Mike Sweenq “A Framework for the Strategic Management of both Service and Manufacturing Operations”
SWP 4 l/92 Roger Scaton & Martin Cordcy-Hayes “Interactive Models of 1ndustri;ll Tcchnolog\. Transfer: A Process Approach”
SWP 9/93 Colin Armistead Kr. Graham Clark “The ‘Coping’ Capacity Mim~gc~~vzl~t Strategy in Services and the Influcncc on Qua lity Performaucc”
SWP lo/93 Ariane Hcgcwisch “Equal Opportunities Polic ies and Developments iu Human Rcsourcc Management: A Comparative European Analysis”
SW P 1 l/93 PilUltl StiilllCy “Service to the Courts: The O fhdcr’s Perspective”
SWP 12/93 Mark Jeuk ius “Thinking abollt Growth: A Coguiti\z Mapping Approach to Undcrstaudiug Slllilll Busiucss Dm~elopnlcnt ”
SWP 13/93 Mike Clarke “Metro-Freight: The Automatiol\ of F rc igh Transportat ion”
SWP 14/93 Jo1111 Hailc! “Gro\\*ing Compctitivcncss of Corporatiorls from the Dc\selopiug W orld: E\idcncc from the soutll”
SWP lY93 NOC~CCI~ Dohcrt\,. Sllaull T~OII KL Claire Viiq “A Positi\*c Poliql’? Corporate Pcrspcct i\*c s 011 Rcdundallc> r and Outplaccmcut”
SWP 16/93 Shai V\,akaruam “Business Plans or Plaits for Business”
SWP 17/93 Mark Jcuk ius. Eric lc Ccrf& T l\olllils COIC “Dc liniug the Market: Au Esploratiou of Marketing Milllagc rs Cogniti\*c FraI llc\\*orks”
SWP 18/93 John Hailc y “Localisatioll alld Espatriatiou: TIx Continuing Role of Espatriatcs in Dcvc loping Countries”
SWP 19/93 Kevin Danic ls KL Audrcw Guppy “Revers ing the Occupat iol~al Stress Process: Some Conscqucnccs of Employee Ps\tchological W ell-Bciug”
SWP 20/93 Paul Burns. Andrew Myers Kr And>, Bailc\~ “Culturi~l Stcrcot\*pcs aud Barr iers to the Single Market”
SWP 21/93 Ter ry Lock llart Kr Andre\\! M!,crs “The Social Charter: lulplicatious for Personnel Mallagcrs”
SWP 22/93 Kevin Dimic ls, Ge r ry Johnson & Leslie de CllCrIliltO lly “Differeuces in Cognitive Models of Buyers and Sellers”
SWP 23/93 Peter Boey & Richard Saw “Evaluatiou of Automated W arehousing Polic ies: Total Systems Approach”
SWP 24/93 John Hailey “Tra ining for Entrepreneurs: International Perspectives ou the Design of Enterprise Development Programmes”
SWP 25/93 T im Denison & Simon Knox “Pocketing the Change from Loyal Shoppers: The Double Indemnity Effect”
SWP 26/93 Simon Kuos “Consumers and Groce ry Brands: Searching for Attitudes - Behaviour Correspondence at the Category Level”
SWP 27/93 Simou Knox “Processing Ideas for Innovation: The Benefits of a Market-Facing Approach”
SWP 28/93 Joe Nellis “The Changing Structure and Role of Building Societies in the UK F inancial Services Sector”
SWP 29/93 Kevin Daniels. Ge r ry Johnson & Leslie de Clicruatoq “Similarity or Understanding: Differences in the Cognitive Models of Buyers and Sellers. A Paper outlining Issues in Mapping and Homogeneity ”
SWP 30/93 Habte Selassie & Roy Hill “T llc Jo int Venture Formation Environment in i1 Sub-Salwan African Country: A Case Study of Govcrnmeut Polic y and Host Partner C:~pi~bility”
SWP 3 l/93 Coliu Armistead, Graham Clark and Paula Stanley “Managing Senice Recovery”
SWP 32/93 Mike Sweeney “The Strategic Management of International Mamlfacturing aIld Sourcing”
SWP 33/93 Ju lia Ne\\?ou “Au Integrated Perspective on Strategic Clli~ llgC”
SWP 3493 Robert Brown “The Graduate Enterprise Programme: Attempting to Measure the Effectiveness of Small Business Tra ining”
SWP 1/9-l Keith Goffin “Repertory Grids in M;lrkct Rcscarch: An Esamplc
SWP 2/9-l Mark Jenkins “A Mcthodolog~~ for Crcatillg ;IIKI Colnparil lg Strategic CiillsiII Maps”
SWP 3/91 Simon Knox “Rc-cnginccriug the Briuld”
SWP 491 Robert Bro\\m Ellcouragil\g Rural Entcrprisc iI1 Great BI-it:lill - Britaiu’s “Vcnturcc;~sh” Competition
SWP 5/9-l Alld\r B!~tllc\\lil>~. BcI-llard DJ,cr KL Aslllc! Bri~gall~a “Bc!lolld tllc Value Cl\iliu: A NC\\’ Fr;mc\\~ork for Business Modcllillg”
SWP 6/9-l Jot Ncllis “Clli~llcllgcs illld Prospects for tllc EHI~OPCIII Fiuiluci:~l Scniccs Indt~st~~”
SWP 7/91 Keith Tho~upson. Panagiotis Alckos KL Nikolaos Ha/.iris “RciIsoIlcd Action TIICO~J i~l)plid to 111~ Prediction or Oli\c Oil UsiIgc”
SWP 8/9-l SiIllmjo!’ Mukhcrjcc Kr AsI~Ic!’ Br-agiillXI “Core Process Rcdcsigu in the Public Sector”
SWP 9/9-l Mike S\vccnc\ “A Mcthodologil for the Strategic Mauagclucllt of Iutcrl\iltiol\ill Manufacturing al\d Sourcing”
SWP 10/9-l Ariauc Hcgc\\.isch & Hcnrik HoIt Larscll “Europcau Dc\*clopulcllts in Public SCC~OI. Hulllilll Rcsourcc Mallagclllcllt”
SWP 11/9-l Valcric Bcucc “Tclepoint: Lessons in High Tcchuolog! Product Markctiug”
SWP 12/94 And)* B!~tllc\\fiI!f “Seeking Business Iulpro\xmwt: A S\,stcllliltic Approach”
SWP 13/9-l Chris Ed\\.ards KL As~~Ic!~ Braganm “Clilssi[~illg alld Plilullil\g BPR Initi;lti\xzs: TI~c BPR Web”
SWP 14/9-l Mark Jcnkius cYr. M:IICOIIH McDoll;lld “Defining iIlld Scgnwlting Milrkcts: Archctypcs alld Rcscarcll Agclldils”
SWP 15/9-l Chris Edwards & Joe Peppard “Forging a Link between Business Strategy and Business Rc-engineering”
S WP 1 b/94 Andrew Myers. Andrew Kakabadse, Colin Gordon & Siobhan Alderson “Effectivcncss of French Management: Aualysis of the Behaviour. Attitudes and Business lulpact of TOP Managers”
SWP 17/9-l Malcollll Harper Micro-Credit - The Benign Paradox
SWP l/95 Andy Bl4lewq “Illforuliltiou in the Supply Chain: Measuring Supply Chain Perforniance”
SWP 3/95 Kevin Danicls. Gerry Johnson, & Leslie de C1lClIliltOll!~ “Collecti\*c Fralucs of Reference, Recognition, alld Mauagcrs Me1lt:11 Models of Competition: A Test of Two Industries”
SWP 495 Alison Rieplc “Stilffing as iI Lever of Strategic Change - The Iuflucncc of Miulagerial Esperience, Behaviour illId V~IUCS”
SWP 5/95 Graftou WhjTte & Andy Bytheway “Factors Affecting Information Systems success”
SWP 6/95 Andy Bailey Xr Gerry Johnson “The Processes of Strategy Development”
SWP 7/95 Valcric Bcncc “The Chauging Market for Distribution: Inlplications for Esel Logistics”
SWP 8/95 Valerie Bcnce “The E\lolution of a Distribution Brand: The Cast of ESCI Logistics”
S WP O/95 And\, B,~thc\\~a) “A R&ic\\~ of EDI Research”
SW P 1 O/95 Andy Byt hc\\q “A Rc\$x of Current Logistics Practice”
S W P 1 2 /9 5 S i m o n K I L O S & D a \*id W a lker “E n lp i r ica l Dcvc lopu lcnts i n tllc Mcasurc l l lc l l I o f IIW O ~ \~ C ~ K I~ ~ , Bra l I d Loya l t \p i i l ld the i r S t ructura l Re l a tio nsh i ps i u G roce ry M a r k e ts“
S W P 1 3 /9 S A ~ lll~ !* B r i ~ g a uz i ~ K r A n d r e w M !,crs “Issues a u d Di lcl l lu l i ls Fac i ug Pub l i c ;1 1 1 d Pr i \Tate S e c to r O rgauis i l t io l ls iI\ th e E f’fch ~ c Im p lc lncn ta t i o~~ o f B P R ”
S W P i a / gS J o 1 1 1 1 Mapcs “C o u l p ;ltibi l it!r a l l d T r a d e - O fl’ Bc t\\lccll Pc r fonnancc : A n A ltcruati\~ c V ic\\.”
S W P lY 9 5 M ike Swccncy K r . Ma rck Sz \\cjczc\\ski “M iu l uhc tu r i ug S ta tld i l rds o f Pc r fo ruwcc fo r success”
S W P 1 6 /9 5 Kcit l l T l ~ o u l p s o r ~ . N icho las T~ IO I I ~XOI~ K L Roy Hi l l “T h e Ro l e o f A ttitud i na l . Norl\ l i l t i\*c ;III~ C o n tro l Bcl icfs i n Dr ink Cho i c e Bc l l a \~ i ou r”
S W P 1 7 /9 5 A lldjf B !rt llc\\~ iI!~ “l n f o r n~a t i on M o d e l l ing fo r M ilil i~gcl l lc l l t”
S W P 1 8 /9 5 M ike S \ \CC~CJ~ K r . Ma rck Sz \\cjczc\\ski “M a n u fac tu r i ng S tri ltcg!’ i l l ld Pcr formxlcc: A S tu d y o f tllc U K Eng iwc r i n g In d u s tr!”
S W P 1 9 /9 5 V a lcr ic BCI ICC - “S t.Jal l lcs’s Hosp i ta l a u d L i lc i lS Eng iucc r i l l g S !stcms L td - A Publ ic /Pr i \*atc S e c to r Co l l abo r i l t i ou i n B P R Prq icct A - E lccti\-c A d m iss ions”
S W P 2 0 /9 5 V a le r i e B W C C “S t.Jill l lcs’s Hosp i ta l i l l ld L \lcas Eug i r l cc r i ug Sys tem L td - A Publ ic /Pr i \*atc S e c to r Col l i lbor i l t io l l i u B P R Prq jcct B - TI~ c R C - O rgan i sa t i on o f P u r c h i u g a l l d hpp l i cs”
S W P 2 1 /9 5 S i m o n K IIO S & D a \‘id W a lkcl “Nc\v E u lpir ici l l Pcrspccti\,cs 0 1 1 B I~ :III~ LOg i l l t \‘: l n lp l icat io~ ls fo r Scgn iw t;ltio u S t ra tegy a l l d E q u i t\r”
C R A N F I E L D W O R K ING P A P E R S List N o 1 0 , 1 9 9 6
S W P l/9 6 A n d y B a ilc> p K r Ge r r y J O ~ U V G O I~ “P a ttcrus o f S tratcg!f D c v c l o p ~ ~ ~ c ~ ~ t”
S W P 2 /9 6 S i m o n K n o s cV . D m fid W n lkcl “Uude r s t:lud i l l g C O IISU I~~C I * Dccis io l l M ; lk iug iI\ G roce ry M iIrkctS : NC\\, E \*icicncc f r om tl\c F is l lbc in M o d e l”
S W P 3 /9 6 K im J ames . M ichae l Jar ret t & D o n n a Lucas “Psycho log i ca l Dynam ics a n d O rgan i sa t i ona l L e a r n i n g : f r om th e Dysf imct iona l O rgan i sa t i on to th e Hea l thy O rgan i sa t i on”
S W P 4 9 6 M ike S w e e n e y & M a r e k Szwe jczewsk i “T h e S e a r c h fo r Gene r i c M a n u fac tu r i ng S t ra teg ies i n th e U K E n g i n e e r i n g In d u s try”
S W P 5 /9 6 J o h n B a k e r “A g ility a u d Flcsibi l i ty: W h a t’s th e D i f fe rence”
S W P G /9 6 S te p h e n A d a m s o n , N o e l e e n D o h e r ty & C la i r e V i ney “3 0 Y e a r s O n - W h a t Have W e L e a r n e d A b o u t C i l rWXS’? ”
S W P 7 /9 6 K e ith G o flin . M a r e k Szwe jczewsk i & Co l i n N W “Supp l i e r B a s e M a n a g e m e n t: A n E m p ir ical I l l \~cSt ig i l t iO l l”
S W P 8 /9 6 K e ith G o fliu “O p e r a tio u s M a n a g e m e n t T each i n g 0 1 1 E u r o p e a n M B A P r o g r a m m e s ”
S W P O /9 6 JiInct Pr ice, Ash l ey B r a g a n z a & O scar W e iss “Tl lc C h a n g e In i t iat ive D i a m o n d : A F r amewo r k to B a l ance Bus i ness P rocess Rcdcs i gn \\*ith o th e r C h a n g e In i t iat ives”
C R A N F I E L D W O R K ING P A P E R S List N o 1 1 ,1 9 9 7
S W P l/9 7 H e l e n P e e k “Towa r d s A F r amewo r k o f Re l a tio n sh i p Markct iug : A Resea r c h M e th o d o l o g y ”
S W P 2 /9 7 Hc lcn Peck “T o \va r ds A F r amewo r k o f Re l a tio n sh i p Markct iug : A n In i t ia l C a se S tu d y ”
S W P 3 /9 7 Chr is E d \\xrds & J o e P e p p a r d “A Cr i t ical Issue i n Bus i ness P rocess Re - Eng i u c e r i u g : Focus i ng th e In i t iat ive”
S W P - l /97 Jot P e p p a r d a n d Do l l F i tzge ra ld “T h e T rans fe r o f Cu l tu ra l ly -G r o u n d e d M :~ u a g c m e u t Techn i q u es : T h e Case o f Bus i ness Rc -Eng i n e e r i n g i n G e r m a n y ”
S W P 5 /9 7 C la i r e V incy & S h a u n Tyson “A l i gn i ng H R M wi th Se rv i ce De l ive ry”
S W P O /9 7 A n d !! B a i ley & Ge r r y J o lwon “Log i ca l o r P roccssua l’? D e fin i n g l i icrcl i icl ital isl i l”
SWP 7/97 Keith Goffin “E\~alui~tillg Customer Support Rcquircmcnts at the Product Design Stage”
SWP S/97 Keith Goflin. Colin New 8r Marck Szwejczcwski “HOW Inno\~ati\~c arc UK Manufacturing
SWP O/97 Kim Ja~ncs “Beyond Indi\idual Stress Mi~llagclllcllt Programmes: To\vards iI11 Orgilnis:ltion:~l System Approach”
SWP lo/97 Mark Halnbly & Richard R~c\‘cs “The Application of Foresight in UK Rcscarcll and Dc\~elopmcnt”
SWP 1 l/97 Leslie Fillkillgllilnl Cyr Ricl\ilrd RCC\TS “Contest Anal>‘sis - A Tcchniqw FOI Analysing Rcscarch in ;I Field. Applied to Litcraturc 011 TI~c Milllilgclllcllt of R&D ;II tl\c Section Lc\*cl”
SWP 12/97 Ali Ja\\‘ild Kr. Ricllilrd RCC\TS “SucccssfY Acquisition of 1T S!wms”
.. , , * ,- . *wHd
SWP l-C/97 Lcslic Fillkinglli~lll Kr Richard RCC\TS “The Four Scl\ools of Thought ill Rcscarcll :Illd Dc\*cloplllcllt Mi~llagcll\cllt alld tl)C Rcli~tionship of tllc Litcraturc to Practitiollcrs’ Needs”
SWP lS/97 Val Singh “A Qualit:lti\~c Study of the Relationship between Gcndcr alld M:magcri:ll Pcrccptions of Engineers’ Commitment: Casts fro111 the UK and S\\*eden”
SWP 16/97 John Fielding “Dividend Yields. Business OptilnisIl1 alld 111~ Predictability of Long Horizon Rc~urns ill the UK”
SWP 17/97 Brenda Porter ‘*Audit Committees in Private alld Public Sector Corporatcs in NC\Y Zealand: An Empirical In\pcstigation”
SWP 13/97 Brenda Porter “Securing Quillit~~ Audit(or)s: Attcnlpts at Finding iI Solution in tllc United States. United Kingdom. Cilllada illld NC\\’ ZCII~II~”
SWP 19/97 Kim Janlcs & Micllilcl Jarrctt “Group Rcgrcssion illld TC;UI~ Dc\~clopn~cllt : Implici~tions for the Top Tcillll Consultant”
SWP l/98 Zllallg Lihong & Keith Goffh “Joint Venture Manufacturing in China - Key
Opportunities for Operations Management Research”
SWP 2/98 Francis Buttle “1 Heard it Through the Grapevine: Issues in Rcfcrral Marketing”
SWP 3/98 Helen Peck “The Development and Implementation of Co- Managed Inventory Agreements in the UK Brewing Industry”
SWP -l/98 Val Singh “Gender and Managerial Meanings of Conlmitment in High Tech Engineering in the UK illId Sweden”
SWP Y98 Joe Pcppard “IT in Organisations: A Framework for Anal_\*sis”
SWP G/98 Kusum Sahdcv & Susan Vinnicombe “Downsizing and Survivor Syndrome: A Study of HR’s Pcrccption of Survivors’ Responses”
SWP 7/98 Mark Jenkins Kr. Steven Floyd “Spinning your Wheels or Wimiing the Race: Knowlcdgc. Resources and Advantage in Formula 011~ Racing”
SWP S/98 Francis Buttle 8r A.Adlaigan “Customer Attachment: A Conceptual Model 0r Customer-Organisation Linkage”
SWP O/98 Joe Peppard “IS/IT Management in the Global Enterprise: A Framc\vork for Strategic Alignment”
SWP IO/% Keith Goflin & Colin New “Customer Support and Product Innovation: Three Esploratory Case Studies”
SWP 1 I/98 Joe Pcppard Csr. Patrick Butler “Consunier Purchasing on the Internet: Processes and Prospects”
S WP 12/98 Haidcr Ali 8r Sue Birley “The Role of Trust in the Marketing Activities of Entrepreneurs Establishing New Ventures”
SWP 13/98 JOC Pcppard 8r John Ward “‘Mind the Gap’: Diagnosing the Relationship bctwccn the IT Organisation and the Rest of the Business”:
a -