Competing Values Leadership
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Competing Values Leadership

Creating Value in Organizations

Kim S. Cameron, Robert E. Quinn, Jeff DeGraff and Anjan V. Thakor

Creating value in a firm is an enormously complex endeavor. Yet, despite its complexity, value creation is the objective of every enterprise, every worker, and every leader. The Competing Values Framework can help leaders understand more deeply and act more effectively. In the first book to comprehensively present this framework, the authors discuss its core elements and focus attention on rethinking the notion of value. They emphasize specific tools and techniques leaders can use to institute sustainable change.
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Chapter 6: Predicting Value Creation and Financial Performance

Kim S. Cameron, Robert E. Quinn, Jeff DeGraff and Anjan V. Thakor


6. Predicting value creation and financial performance The first five chapters of this book provided a view of how the Competing Values Framework helps leaders create value by expanding and enhancing an understanding of tradeoffs, tensions, possible integrations, and new leadership activities. We explained three different levels of analysis that the Competing Values Framework helps to highlight: 1. the importance of considering the competing and contradictory elements in leadership and in organizations that are necessary for effective performance; the integration of opposites to create ‘both/and’ thinking in the pursuit of value creation; and the creation of completely new and more complex strategies for leadership based on the merger of positive opposite terms. 2. 3. In this chapter, we explain an important application of the Competing Values Framework. This application relates to predicting and enhancing the financial value of organizations (Thakor, 2001). That is, in addition to being useful for guiding leader behaviors, the Competing Values Framework also serves as a method for measuring and predicting financial performance. The framework does so at a level of accuracy that exceeds other such measurement frameworks (e.g., the Balanced Scorecard, Economic Value Added, and so on). Statistical analyses reveals that the rankings assigned to firms based on the Competing Values Framework display a contemporaneous correlation of about 74 percent with the market-value-to-book-value ratios of these firms. Thus, the Competing Values Framework correlates more highly with stock market valuation than other measures of which we are aware. PRINCIPLES OF VALUE CREATION To...

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