Measuring Value Creation: Financial Value Drivers vs. Non-Financial Value Drivers

Abstract

Value creation of a business organization may perhaps be recognized as the strategic purpose of doing the business in the contemporary business domain. Identifying and quantifying what value is created and how much value is created become the foremost tasks in the value creation process of the business organizations. When identifying and quantifying value created by a business organization, the measurement tools of value creation play a pivotal role in the mechanism of measuring value creation of the business organization. The value creation literature provided number of evidences on the measurement tools of value creation or in other words, value drivers to identify and quantify the value creation of a business. Either financial and non-financial measurements or value drivers have been identified in that scenario by the scholars in the value creation arena. However, none of them has explored the possibility of merging both financial and non-financial value drivers in identifying and quantifying the value created by a business. Therefore, there is a problem to address that, whether both financial and non-financial value drivers of value creation can be linked together to identify and quantify the value creation of a business. Hence, the purpose of this study is to explore the possibility of merging financial and non-financial value drivers to identify and quantify the value creation of a business organization. To achieve the purpose, 83 number of research articles from 1998 to 2018, which mentioned the ‘value creation’ as a keyword in the article title, have been reviewed and different financial and non-financial value drivers have been identified. It has been suggested that, a model for identifying and quantifying the value creation by linking some financial and non-financial value drivers together.