V
Valorization Stabilization of a currency or commodity by artificial means, such as state intervention.
Value Agreed-upon worth of a product or service, as distinct from its retail price or cost to produce.
Value added Greater worth added to goods and services at each stage or step in the chain of production, which becomes the basis for levying a VALUE-ADDED TAX.
Value-added tax Form of consumption tax or excise added incrementally on the value added at each stage of processing or the production and distribution of a commodity and is ultimately passed on to the consumer. Unlike a sales tax, it occurs each time a business in the supply chain purchases products.
Value analysis Technique developed by educator and engineer LAWRENCE D. MILES to maximize the utility provided by a product or service and to minimize or eliminate waste. It measures the value-added and non-value-added elements in a production and delivery process in order to reengineer the design more efficiently.
Value chain Series of activities that directly create value, by which a good or service is produced, distributed, and marketed. Each step contributes different values and incurs different costs. As VALUE is the amount that buyers are willing to pay for a product or service, PROFIT is the differential between value and the costs incurred. The activities include outbound logistics, operations and production, marketing and sales, and service, as well as support activities such as human resources, technology, and infrastructure.
Value dimensions Dutch researcher GEERT HOFSTEDE’S classification of values as they impinge on behavior: (1) power distance; (2) uncertainty avoidance; (3) individualism; and (4) masculinity. Hofstede’s values are learned qualities imparted by a culture.
Value engineering Design of a product to eliminate costs that do not contribute to the VALUE of the product. It has three aspects: (1) value target; (2) development of new products from concepts and increasing functionality without a corresponding increase in cost; and (3) manufacturing value engineering, which identifies the best method to produce a part with the trade-off between cost and quality.
Value-instrumentality-expectancy theory Proposed by business professor VICTOR H. VROOM, a theory of motivation that the level of effort exerted by an individual on any task is based on three variables: (1) instrumentality, or the belief that the action will be successful; (2) confidence that success will bring rewards; and (3) valence, or the desirability of the reward.
Value migration Flow of VALUE and PROFIT away from companies with outmoded business models and toward those with more efficient models. Companies that are more flexible thus gain COMPETITIVE ADVANTAGE. The value stabilizes as a competitive equilibrium is reached.
Value planning Planning designed to maximize the value of a corporation to its shareholders, with value being the present worth or estimation of future cash flow.
Value reengineering Radical redesign of processes to achieve a dramatic improvement in performance, such as cost, quality, speed, and service.
Variety wars Competition based on the introduction of new products, aimed at overwhelming competitors’ productive capacity and displacing their products on the shelves.
Veblen, Thorstein Bunde (1857–1929) American sociologist and founder of the institutional economics movement. He was a critic of capitalism, which he lambasted in The Theory of the Leisure Class (1899). He combined a evolutionary and Darwinian approach to economics with an institutionalist approach to economic analysis. He discredited the conspicuous consumption and waste of capitalists, whom he equated with parasites.
Veblen effect Economic phenomenon first noted by American sociologist THORSTEN VEBLEN, where high levels of consumption lead to increased demand or higher prices.
Velocity of circulation Average number of times a unit of money is used in a specified period, equal to the total amount of money spent during that period divided by the total amount of money in circulation.
Venture capital Money loaned to start up businesses, usually by venture capital funds, which then own equity in the start-up. This is private equity funding that is considered high risk but can also give high yields. Also venture capitalist, a person involved in venture capitalization.
Vertical integration Process whereby a company extends its business interests into all stages of its production and distribution. Vertical integration may be achieved through BACKWARD or FORWARD INTEGRATION at any stage of a company’s history. Vertical integration adds to the capital investment, includes additional risk to a firm’s position in the industry, makes it more difficult to exit, and may require careful coordination. See also HORIZONTAL INTEGRATION.
Vertical linkage analysis Tool for analyzing the VALUE CHAIN to determine where opportunities exist for enhancing competitive advantage.
Vertical marketing system CHANNEL structure of distribution in which producers, wholesalers, and retailers act as a single system.
Vested interest Involvement in an enterprise or business in anticipation of personal gain.
Vestibule training Education of future employees in which they learn a job skill in a simulated environment.
Vineyard organization Model structure in which the parent group is viewed as the vine and the subsidiaries or employees as clusters of grapes. The clusters are relatively autonomous, but are dependent on the vine for sustaining power.
Viral marketing Strategy that relies on the Internet, social media, and word of mouth to promote products and services.
Virement System of budgetary controls in which funds may be transferred from one part of the budget to another during a financial year, usually to make up for a shortfall.
Virtual organization Business form without physical properties, such as a defined location or full-time employees, and that provides products or services through third parties or by OUTSOURCING.
Virtuous cycle Cycle of company growth that replicates itself by producing positive returns at every turn. Opposite of vicious cycle.
Visible management Philosophy that top managers should not hide behind their desks but instead make themselves accessible to their subordinates.
Visibles Earnings from exports and payments for imports of goods, as opposed to services such as banking.
Vision Leadership quality of formulating ideas, plans, or dreams that help shape the future and ability to persuade colleagues and associates to share those dreams.
Vision statement See MISSION STATEMENT.
Vital statistics In business, data relating to demographics that can influence marketing strategies.
Vitalist theory Management principle that the entire organization needs to be designed before the parts are put into place.
Vitamin model Eight factors that affect job satisfaction: money, security, social position, clarity, variety, control, use of skills, and contact with peers.
Vroom, Victor Herald Canadian authority on management who explored motivation, leadership, and decision making in his Work and Motivation (1964). See also VROOM-YETTON-JAGO MODEL.
Vroom-Yetton-Jago model Theory of leadership that leaders should vary the extent to which they allow followers to participate in decision making, according to certain factors constructed in a DECISION TREE: the nature of the task, the extent of possible disagreement, and the willingness of followers to accept the ultimate decision.
Vulnerability analysis Method of evaluating threats to a company in different areas and functions: resources and assets, customer needs, cost position, consumer base, technology, corporate identity, regulations, social values, customer goodwill, and complementary products and services. Vulnerability analysis identifies the threats, ranks them on a scale, estimates their probability, and determines the firm’s capability to deal with them.
Vulture capital Investment in firms or properties that are facing liquidation, then turning them around in order to sell them at a profit.