The concept of business value aligned with the theory that a firm is best viewed as a network of relationships both internal and external.
When the nodes are independent organizations (e.g., suppliers) or agents (e.g., customers), it is assumed that the firm is seeking a cooperative, win-win relationship where all parties receive value.
While it would be very desirable to translate all forms of business value to a single economic measure (e.g., discounted cash flow), many practitioners and theorists believe this is either not feasible or theoretically impossible.
As yet, there are no well-formed theories about how the various elements of business value are related to each other and how they might contribute to the firm's long-term success.
For a publicly traded company, shareholder value is the part of its capitalization that is equity as opposed to long-term debt.
For a privately held company, the value of the firm after debt must be estimated using one of several valuation methods, such as discounted cash flow or others.
Employees are the most valuable asset companies possess and the one we expect the most from, but often the one that receives the short end of the stick when it comes to values applied to them.
An increase or decline in business value that an action produces is traditionally measured in terms of customer satisfaction, revenue growth, profitability, market share, wallet share, cross-sell ratio, marketing campaign response rates, or relationship duration.
Based on Maslow's hierarchy of needs, consultants Bain and Company described potential actions as building blocks of value for consumers and businesses.
For instance, in the business to consumer (B2C) context the four categories are functional, emotional, life changing and social impact.
[4][5] Business value is an informal concept and there is no consensus, either in academic circles or among management professionals, on its meaning or on its role in effective decision-making.
The term could even be described as a "buzz word" used by various consultants, analyst firms, executives, authors, and academics.