A significant philosophical issue that must be considered with regard
to value is: ‘From which perspective
should value be determined’? The most obvious perspective is from the
organisation itself. Value is linked
to the concept of ‘anything that is good for the business or organisation’.
However, other perspectives also
exist, including that of society. Some actions may bring value to the organisation
as well as to other groups
at the same time—for example, more efficient farming practices may lead to higher yields,
lower prices
and more nutritional food. However, other actions may benefit the organisation while
causing significant
harm to others, as shown by the examples in Figure 1.4.
The development of corporate social responsibility (CSR) indicates
that people are interested in more
than just the pure economic value that organisations create. They are also
interested in ‘how’ that economic
value is created, and they assess the impact of those actions (or inactions).
CSR reporting has increased
to help people understand the sustainable value or effect of an
organisation’s activities from a social
and environmental perspective. Such reporting aims to increase
the level of ethics and accountability
demonstrated by organisations when making value-based decisions.
Value is either created or destroyed by management through the business
model they use. The business
model is highly dependent on a broad range of relationships and activities
that take place in the market,
in a societal and environmental context within which the organisation operates.
Therefore, to be truly
valuable, something must offer economic value to the organisation and provide
sustainable value to other
stakeholders within society.