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Aligning the concepts of Lean Management and Value-based Management: Fosetering a shared understanding between operations and financial functions at the system level

Student thesis: Doctoral Thesis

This thesis sets out to explore the relationship and compatibility of the appraoches of Lean Management (LM) and Value-based Management (VBM). Previous researchers studying LM and VBM have agreed on the need to harmonise VBM ans the management control system (MCS) with the operational strategy in general, and in particular with regard to the employment of LM. But despite a decade of scholars' calls, the overarching relation between Lm and VBM at the system level has received virtually no attention.
In finnaly answering these calls, the study initially familiarises the reader with the concepts and key characteristics of LM and VBM. While reviewing these two approaches, it is found that sueprisingly niether the term 'value' nor 'vlaue driver' is clearly defined. Therefore, a new definition of both terms is presented that captures and harmonises both areas. Subsequently a systematic assessment of LM literature against the six-step normative VBM framework of Ittner and Larcker (2001) is conducted, to determine lean's compatibility to VBM based on existing knowledge. This appraisal finds that although LM is overall highly capable of contributing to the normative VBM demands, there is a key gap, which is the lack of sufficient lean valu driver model. This gap is filled, based on the author's research philosophy of critica; realism, by employing a two-step approach, which contains the creation of an entirely new lean value driver model that froms the foundation for the primary empirical research, by collecting data through interviewing ten top managers with extensive experience in LM.
Empirical data provides sufficient evidence regarding the validity of the newly developed conceptual model. Furthermore, highly valuable fresh insights are gained regarding the role and importance of different lean stakeholders, their importance, requirements, contributions, and relationships between them. The resulting final model, which is also the main contribution of this thesis, is found to be superior to previous attempts to apply existing approaches, such as the Balanced Scorecard (BSC), or value trees to the lean environment. Furthermore, the model improves Lm and VBM professional practice as it fosters a shared understanding of the value creation process within a lean system and thereby helps to remove existing barriers. Finally, it supports future fruitful alliances between a company's operational and financial communities, thus enhancing the benefits to the enterprise and its stakeholders.
Original languageEnglish
Awarding Institution
Supervisors/Advisors
Award dateMay 2018
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