Midterm
CHAPTER 1
• Value creation takes place at 3 stages, input, conversion, and output. Each stage is affected by the environment in which the organization operates. - Organizational environment is the set of forces and conditions that operate beyond an organization's boundaries but affect its ability to acquire and use resources to create value. - Inputs include resources such as raw materials, machinery, information and knowledge, HR, and money and capital. They way the organization chooses and obtains from its environment the inputs it needs to produce goods and service determines how much value the organization creates at the input stage.
E.g.) choose certain products and people to work for company. - Conversion stage: organization uses human resources and technology to transform inputs into outputs. It depends how much value is created in this stage. The amount of value the organization creates is a function of the quality of its skills, including its ability to learn from and respond to the environment.
E.g.) How to best sell and market products. - Outputs come after conversion stage. Outputs include finished goods and services that the organization releases to its environment, where they are purchased and used by customers to satisfy their needs.

After all these steps are accomplished, the cycle starts all over again after the money is earned from the sale of its output.

• Competitive advantage is the ability of me company to outperform another because its managers are able to create more value from the resources at their disposal. Organizations are discovering that design, change, and redesign are a sure of sustained competitive advantage. - Competitive advantage springs from Core Competencies: managers' skills and abilities in value-creating activities. Skills in R&D
E.g.) Manufacturing, R&D, managing new