{"product_id":"value-creation-principles-isbn-9781119706625","title":"Value Creation Principles","description":"\u003cp\u003e\u003cb\u003ePRAISE FOR VALUE CREATION PRINCIPLES\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e\"In \u003ci\u003eValue Creation Principles,\u003c\/i\u003e Madden introduces the Pragmatic Theory of the Firm that positions the firm as a system fueled by human capital, innovation, and, at a deeper level, imagination. He challenges us to understand how we know what we think we know in order to better discover faulty assumptions that often are camouflaged by language. His knowledge building loop offers guideposts to design experiments and organize feedback to facilitate early adaptation to a changed environment and to avoid being mired in ways of thinking rooted in 'knowledge' of what worked well in the past—a context far different from the context of today. His book explains a way of being that enables those who work for, or invest in, business firms to see beyond accounting silos and short-term quarterly earnings and to focus on capabilities instrumental for creating long-term future and sustainable value for the firm's stakeholders. I can't recommend this astounding book enough especially given its deep and timely insights for our world today.\"\u003cbr\u003e \u003cb\u003e —John Seely Brown,\u003c\/b\u003e former Chief Scientist for Xerox Corp and Director of its Palo Alto   Research Center (PARC); co-author with Ann Pendleton-Jullian of \u003ci\u003eDesign Unbound:   Designing for Emergence in a White Water World\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003e\"In contrast to existing abstract theories of the firm, Madden's pragmatic theory of the firm connects management's decisions in a practical way to a firm's life cycle and market valuation. The book promotes a firm's knowledge building proficiency, relative to competitors, as the fundamental driver of a firm's long-term performance, which leads to insights about organizational capabilities, intangible assets, and excess shareholder returns. \u003ci\u003eValue Creation Principles\u003c\/i\u003e is ideally suited to facilitate progress in the New Economy by opening up the process by which firms build knowledge and create value, which is a needed step in revising how neoclassical economics treats the firm.\"\u003cbr\u003e \u003cb\u003e —Tyler Cowen,\u003c\/b\u003e Professor of Economics, George Mason University; co-author of the popular   economics blog \u003ci\u003eMarginal Revolution\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003e\"Bartley Madden rightfully points out that both textbook and more advanced economic theories of the firm fail to address the concerns of top management and boards of directors. He offers a tantalizing pragmatic alternative that directly connects to quantitative changes in the firm's market value. His framework gives recognition to the importance of intangible assets, and his pragmatic approach is quite complementary to the Dynamic Capabilities framework that strategic managers implicitly and sometimes explicitly employ.\"\u003cbr\u003e \u003cb\u003e —David J. Teece,\u003c\/b\u003e Thomas W. Tusher Professor in Global Business, Faculty Director, Tusher   Center for the Management of Intellectual Capital, Haas School of Business, University of   California, Berkeley \u003c\/p\u003e\u003cp\u003ePreface and Overview xv\u003c\/p\u003e \u003cp\u003e\u003cb\u003eI A Firm’s Role in Society\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e1 Overview of the Pragmatic Theory of the Firm \u003c\/b\u003e\u003cb\u003e3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Nucleus of the Pragmatic Theory of the Firm 4\u003c\/p\u003e \u003cp\u003eThe Evolution of Thinking about the Theory of the Firm 7\u003c\/p\u003e \u003cp\u003eKindred Spirits for the Pragmatic Theory of the Firm 10\u003c\/p\u003e \u003cp\u003eInnovation and Economic Growth 16\u003c\/p\u003e \u003cp\u003eThe Purpose of the Firm 24\u003c\/p\u003e \u003cp\u003eThe Pragmatic Theory of the Firm 30\u003c\/p\u003e \u003cp\u003e\u003cb\u003e2 Knowledge Building and Firm Performance \u003c\/b\u003e\u003cb\u003e33\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Knowledge-Building Path to Improved Performance 34\u003c\/p\u003e \u003cp\u003eThe Knowledge-Building Loop 35\u003c\/p\u003e \u003cp\u003eHuman Behavior, Culture, and Firm Performance 44\u003c\/p\u003e \u003cp\u003eElegant, Parsimonious, and Reliable Theories 48\u003c\/p\u003e \u003cp\u003e\u003cb\u003e3 Work, Innovation, and Resource Allocation \u003c\/b\u003e\u003cb\u003e53\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLean Thinking—“No Problem is a Problem” 55\u003c\/p\u003e \u003cp\u003eThe Theory of Constraints 60\u003c\/p\u003e \u003cp\u003eOntological\/Phenomenological Model 64\u003c\/p\u003e \u003cp\u003eInnovation 69\u003c\/p\u003e \u003cp\u003eResource Allocation 71\u003c\/p\u003e \u003cp\u003eThe Key Constraint in Sustaining a Knowledge-Building Culture 75\u003c\/p\u003e \u003cp\u003e\u003cb\u003eII The Pragmatic Theory of the Firm Connects Innovation and Valuation\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e4 Life-Cycle Performance and Firm Risk \u003c\/b\u003e\u003cb\u003e81\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Firm’s Competitive Life Cycle 84\u003c\/p\u003e \u003cp\u003eA Paranoid Optimist Restructures Nokia 90\u003c\/p\u003e \u003cp\u003eA Case Study of Innovation—Amazon 93\u003c\/p\u003e \u003cp\u003eThe Life-Cycle Valuation Model 96\u003c\/p\u003e \u003cp\u003eWhat Does a Stock Price Say about a Firm’s Future Investments? 99\u003c\/p\u003e \u003cp\u003eForward-Looking, Market-Implied Discount Rate 101\u003c\/p\u003e \u003cp\u003eThe Roots of Modern Finance 103\u003c\/p\u003e \u003cp\u003eFirm Risk Offers a Different Mindset 106\u003c\/p\u003e \u003cp\u003eSummary of Key Ideas 110\u003c\/p\u003e \u003cp\u003eA Research Methodology for Advancing the Life-Cycle Framework 111\u003c\/p\u003e \u003cp\u003eBetter Estimates of the investor Discount Rate 116\u003c\/p\u003e \u003cp\u003e\u003cb\u003e5 Intangible Assets, Brands, and Shareholder Returns \u003c\/b\u003e\u003cb\u003e121\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe New Economy and Connectivity-Enabled Business\u003c\/p\u003e \u003cp\u003eModels 123\u003c\/p\u003e \u003cp\u003eEmpirical Evidence about Intangible Assets 126\u003c\/p\u003e \u003cp\u003eBrands Impact a Firm’s Market Value 129\u003c\/p\u003e \u003cp\u003eA Conceptual Roadmap for Handling Intangible Assets 133\u003c\/p\u003e \u003cp\u003eIntegrated Reports, Life-Cycle Reviews, and Intangibles 139\u003c\/p\u003e \u003cp\u003eExpect More Than Coffee—Starbucks 143\u003c\/p\u003e \u003cp\u003eCostco Starts by Caring for Its Employees 145\u003c\/p\u003e \u003cp\u003eRinging Doorbells and Changing Times—Avon 148\u003c\/p\u003e \u003cp\u003eWhy Did Illumina Outperform the Stock Market 18-Fold from 2004 to 2014? 150\u003c\/p\u003e \u003cp\u003eThe Efficient Market Hypothesis and the Factor Zoo 153\u003c\/p\u003e \u003cp\u003eExcess Shareholder Returns and Three Levels of Cause-and-Effect Logic 157\u003c\/p\u003e \u003cp\u003eUseful Ideas for Investors, Managements, and Academic Researchers 164\u003c\/p\u003e \u003cp\u003eInvestors 164\u003c\/p\u003e \u003cp\u003eManagements 166\u003c\/p\u003e \u003cp\u003eAcademic Researchers 167\u003c\/p\u003e \u003cp\u003eSystem Principles and Effective Language 168\u003c\/p\u003e \u003cp\u003e\u003cb\u003eIII Value Creation\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e6 Life-Cycle Position, Adaptability, and Organizational Structure \u003c\/b\u003e\u003cb\u003e181\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLife-Cycle Guideposts 182\u003c\/p\u003e \u003cp\u003eFocused Execution of an Innovative Business Model—Netflix 183\u003c\/p\u003e \u003cp\u003eInnovation in the Operating Room—Intuitive Surgical 188\u003c\/p\u003e \u003cp\u003eNothing Runs Like a Deere 191\u003c\/p\u003e \u003cp\u003eSmith Corona and NCR 194\u003c\/p\u003e \u003cp\u003eThe ABCs of Organizational Structure 198\u003c\/p\u003e \u003cp\u003eOrganizational Experimentation at the Haier Group 204\u003c\/p\u003e \u003cp\u003eValue Creators Drive Dynamism in China 209\u003c\/p\u003e \u003cp\u003e\u003cb\u003e7 Achieving Progress Through Knowledge Building and Value Creation \u003c\/b\u003e\u003cb\u003e213\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe New Economy and the Pragmatic Theory of the Firm 214\u003c\/p\u003e \u003cp\u003eLife-Cycle Track Records are a Scorecard and a Learning Tool 222\u003c\/p\u003e \u003cp\u003ePolitics and the Greater Good 224\u003c\/p\u003e \u003cp\u003eProgress Studies 230\u003c\/p\u003e \u003cp\u003eAbout the Author 239\u003c\/p\u003e \u003cp\u003eIndex 241\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eBARTLEY J. MADDEN\u003c\/b\u003e is an independent researcher. He retired as a managing director of Credit Suisse HOLT after a career in investment research and money management that included the founding of Callard Madden \u0026amp; Associates. His early research was instrumental in the development of the cash-flow return on investment (CFROI) valuation framework. Today, Credit Suisse HOLT delivers the CFROI framework and related global database to money management organizations worldwide. Madden's current work (see www.LearningWhatWorks.com) involves innovative initiatives in public policy and education.   \u003c\/p\u003e\u003cp\u003eWhy do some firms thrive in fastchanging environments while others fail? The Pragmatic Theory of the Firm, as revealed in \u003ci\u003eValue Creation Principles,\u003c\/i\u003e explains how a firm's long-term survival and prosperity depend on its knowledge-building proficiency relative to competitors. \u003c\/p\u003e\u003cp\u003eAuthor Bartley J. Madden provides a particularly timely and comprehensive understanding of firm performance by treating the firm as a system of connected activities. He explains why attention to how we build knowledge offers insights into how we can improve business performance, including the performance of top management and the board of directors. \u003c\/p\u003e\u003cp\u003eIndustries can and do change dramatically. Capabilities that benefit a firm now could be much less valuable in the future. Management's fundamental task, as explained by Madden, is to nurture and sustain a knowledge-building culture so that management can continually adapt to a changing world. When knowledge building becomes an integral part of every employee's job, both job satisfaction and retention of key employees improve. Such a culture unleashes creativity and motivates employees to solve problems (and create new opportunities) through discovering obsolete assumptions and unraveling root causes. \u003c\/p\u003e\u003cp\u003eThe Pragmatic Theory of the Firm uses a life-cycle framework that connects a firm's financial performance to its market valuation and long-term shareholder returns. Throughout this book, life-cycle track records for game-changing firms are displayed that not only provide a visual, intuitive explanation of how the stock market works, but also capture the uniquely important role of intangible assets that dominate value creation in the New Economy. \u003c\/p\u003e\u003cp\u003eThe key to sustained progress for the firm and all its stakeholders and society is a knowledge-building culture coupled with a relentless focus on long-term value creation by management and the board.    \u003c\/p\u003e\u003cp\u003e\u003cb\u003ePRAISE FOR VALUE CREATION PRINCIPLES\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e\"In \u003ci\u003eValue Creation Principles,\u003c\/i\u003e Madden introduces the Pragmatic Theory of the Firm that positions the firm as a system fueled by human capital, innovation, and, at a deeper level, imagination. He challenges us to understand how we know what we think we know in order to better discover faulty assumptions that often are camouflaged by language. His knowledge building loop offers guideposts to design experiments and organize feedback to facilitate early adaptation to a changed environment and to avoid being mired in ways of thinking rooted in 'knowledge' of what worked well in the past—a context far different from the context of today. His book explains a way of being that enables those who work for, or invest in, business firms to see beyond accounting silos and short-term quarterly earnings and to focus on capabilities instrumental for creating long-term future and sustainable value for the firm's stakeholders. I can't recommend this astounding book enough especially given its deep and timely insights for our world today.\"\u003cbr\u003e \u003cb\u003e —John Seely Brown,\u003c\/b\u003e former Chief Scientist for Xerox Corp and Director of its Palo Alto   Research Center (PARC); co-author with Ann Pendleton-Jullian of \u003ci\u003eDesign Unbound:   Designing for Emergence in a White Water World\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003e\"In contrast to existing abstract theories of the firm, Madden's pragmatic theory of the firm connects management's decisions in a practical way to a firm's life cycle and market valuation. The book promotes a firm's knowledge building proficiency, relative to competitors, as the fundamental driver of a firm's long-term performance, which leads to insights about organizational capabilities, intangible assets, and excess shareholder returns. \u003ci\u003eValue Creation Principles\u003c\/i\u003e is ideally suited to facilitate progress in the New Economy by opening up the process by which firms build knowledge and create value, which is a needed step in revising how neoclassical economics treats the firm.\"\u003cbr\u003e \u003cb\u003e —Tyler Cowen,\u003c\/b\u003e Professor of Economics, George Mason University; co-author of the popular   economics blog \u003ci\u003eMarginal Revolution\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003e\"Bartley Madden rightfully points out that both textbook and more advanced economic theories of the firm fail to address the concerns of top management and boards of directors. He offers a tantalizing pragmatic alternative that directly connects to quantitative changes in the firm's market value. His framework gives recognition to the importance of intangible assets, and his pragmatic approach is quite complementary to the Dynamic Capabilities framework that strategic managers implicitly and sometimes explicitly employ.\"\u003cbr\u003e \u003cb\u003e —David J. Teece,\u003c\/b\u003e Thomas W. Tusher Professor in Global Business, Faculty Director, Tusher   Center for the Management of Intellectual Capital, Haas School of Business, University of   California, Berkeley\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990444949733,"sku":"NP9781119706625","price":29.95,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781119706625.jpg?v=1761787857","url":"https:\/\/k12savings.com\/es\/products\/value-creation-principles-isbn-9781119706625","provider":"K12savings","version":"1.0","type":"link"}