Value Creation and Appropriation in Firms: Conceptual Review and a Method for Measurement

37 Pages Posted: 20 Jan 2014

See all articles by Marvin B. Lieberman

Marvin B. Lieberman

UCLA Anderson School of Management

Natarajan Balasubramanian

Syracuse University - Whitman School of Management

Roberto Garcia‐Castro

IESE Business School

Date Written: June 10, 2013

Abstract

The notion of value creation by firms is central to strategy. Despite its importance, value creation has been defined in many different ways, often with a narrow focus on shareholders, which can lead to confusion about the notion. In this paper, we clarify some commonly used concepts of value creation. We then discuss one particular concept: economic gain, or the change in economic value created from one period to the next. We elaborate on how such value is created by the firm and distributed among a set of stakeholders, including shareholders, managers, employees, suppliers and customers. We conclude by introducing a method for quantifying this gain and its distribution among stakeholders of the firm.

Keywords: Value creation; Value appropriation; Stakeholders; VCA model

Suggested Citation

Lieberman, Marvin and Balasubramanian, Natarajan and Garcia-Castro, Roberto, Value Creation and Appropriation in Firms: Conceptual Review and a Method for Measurement (June 10, 2013). Available at SSRN: https://ssrn.com/abstract=2381801 or http://dx.doi.org/10.2139/ssrn.2381801

Marvin Lieberman

UCLA Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

Natarajan Balasubramanian

Syracuse University - Whitman School of Management ( email )

United States

Roberto Garcia-Castro (Contact Author)

IESE Business School ( email )

Camino del Cerro del Aguila, 3
Madrid, Madrid 28023
Spain

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
466
Abstract Views
2,249
Rank
113,163
PlumX Metrics