2. The Future of Value Creation

“The corporation as we know it, which is now 120 years old, is unlikely to survive another twenty-five years. Legally and financially, yes, but not structurally and economically.”

Peter Drucker, 20001


Sustaining a business is the act or continual value creation. And value creation occurs via the process of innovation, whether that’s innovation in strategy, business model, products, processes, or services. This chapter walks through the rationale for why a fundamental change in the way value is created—and captured by organizations—must occur. You will examine, using appropriate economic theories, why the modern corporation exists in the first place; and why those same theories predict different organizational ...

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