Jeffrey Yi-Lin Forrest - Value in Business: A Holistic, Systems-based Approach to Creating and Achieving Value

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The objective of this book is of two folds. First, it attempts to provide marketers, managers, and entrepreneurs with a scientific tool of analysis to assist them with decision-making, while knowing that their decisions are mostly reliable. Second, it offers scholars with a brand-new approach to exploring opportunities of value creation and capture. Instead of data- and anecdote-based analysis, this book accomplishes this practically significant and theoretically important objective by establishing results based on systems science and a logical reasoning that is parallel to that commonly used in mathematics and natural science. By employing such an approach, all limitations of econometric methods can be avoided.

This book is composed of six parts, addressing various key issues related to value creation and capture. The first part introduces the basics of systems science necessary for the rest of this book, develops a general theory on how a market of free competition evolves and how the resource-based theory of the firm can be established through axiomatization. The second part, entitled Demand- and Supply-Side Strategies, looks at the supply-chain ecosystem of a firm, how its upstream and downstream affect a firms performance, and when synergetic innovations, involving, for example, simultaneous utilities and multi-sided markets, appear. The third part explores how to generalize the well-known Porters value-chain framework by first investigating the systemic structure of the mind, how consumers classify product information, and how value can be created out of innovation and resources and captured along with memberships in strategic networks and blocks.

The fourth part, entitled Customer Values, examines when effective consumer value propositions (CVPs) emerge, how CVPs can lead to values and competitive advantages, and why market-sensing capability is vitally important to firm performance. The fifth part, entitled Some Roles of Manufacturing and Artificial Intelligence, addresses why manufacturing is important in the present transformation of industries and how artificial intelligence affects technological innovations. The sixth part, entitled Government Policies and Supports, looks at such questions as how the government can help stimulate economic growth and when government policies can lead to improvements in firm performance. As the conclusion of this book, the afterword, entitled Need for A Multi-Approach Methodology and Economic Induction, fills several important methodological holes that emerge throughout the book and outlines the next steps for future research based on what has been established here.

The existent literature on value creation and capture is mostly dominated by data and/or anecdote analysis. Although such works establish potential facts and provide managerial suggestions, consequent decisions have been time and again shown to be problematic. That surely is one of the reasons why one magnificent success in a particular value-related effort cannot be readily copied to another effort although various conjectures or theories have been developed to explain how the initial success appeared. That is the very reason why this book opens up a brand-new territory valuable for scholarly research and practical decision-making, while providing reliable managerial recommendations that are expected to produce real-life benefits.

This book aims particularly at graduate students, researchers, and practitioners in areas related to the creation and capture of value. By referencing to what this book presents, the reader will be able to employ systems methods and holistic thinking to resolve various demanding issues in his/her life and career. By masterfully employing the systemic intuitionthe yoyo mode, he/she will be able to make decisions fairly swiftly without unnecessarily spending other resources of limited availability.

Among all research areas of business and economic studies, value creation and capture stand for one of the central topics intensively considered by both scholars and practitioners. Because of this reason, there appears the need to organize relevant concepts and conclusions in a systematic fashion. However, instead of proposing another seemingly plausible theory, like many other theories in social science, based on conjectures suggested empirically, this book develops the planned theory in a scientific way in the language of systems science by using a logical reasoning that is parallel to the one commonly employed in mathematics and natural science.

The motivation for us to take this particular approach in our effort to develop the planned theory is the sharp difference between studies of mathematics/natural science and those on value creation and capture. The former establishes scientifically sound results, which can be widely employed to design and produce useful commercial products, while the latter derives theories, from isolated events and processes that cannot be generally applied successfully to different situations or different times. By carefully comparing the difference, it can be seen clearly that mathematics and natural science develop new conclusions, such as theorems, based on a few postulates or laws through using rigorous logical reasoning, while studies on value creation and capture tend to be data and anecdotes driven through using econometrical models. Even for theoretical studies of value creation and capture, they generally derive conclusions based on earlier empirical discoveries, which, of course, do not constitute a solid ground on which to build reliable theories. Therefore, methodologically speaking, studies in mathematics and natural science develop conclusions and principles that can be widely employed so that as long as one knows about the functionality of a product, he/she is able to reproduce it without any need of knowing exactly how the earlier ones are made. However, the same is not true with studies of value creation and capture, where recognized successes, no matter how well they are studied, cannot be readily reproduced in another business setting at a different location. To potentially help resolve such a problem with studies of value creation and capture, this book attempts to identify a few axioms, instead of empirical discoveries, on which the planned theory is reliably constructed.