The Meaning of Value Creation
What do I mean by value creation, and why is it so central? Let me begin with you as an individual. There is only one reason why you are employed by the organization you work for: the value of the benefits you produce for the organization exceeds the cost to the organization of having you produce those benefits. The cost to the organization includes your wages and other compensation as well as what it costs to provide you with the resources you need to do your job. Thus, for any given period,
Value created by you = Value of the organizational benefits you produce
− Direct (tangible) cost of employing you
(wages, ...
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