An Approach to Governance Structure Selection

An essential question for every business is " How is value created? " Since the industrial age, value is created through a value chain, a chain of consecutive value activities that all together create a tangible product. However, with the current information technology, our economy shifts increasingly towards the economic offering of more complex, intangible products. Enabled by information technology, the set of value activities needed to create these complex products can be performed by different actors. These actors operate in a value network, exchanging information over the Internet or dedicated networks. When constructing a conceptual model of such a value network, an essential decision is the assignment of value activities (or business processes) to performing actors. At the one extreme one could assign all activities to one large firm that performs all business activities, at the other extreme one could assign each activity to a different firm. The question 'who does what' is central in this governance structure selection process. In this thesis, we will introduce the VA 3 Approach. Starting with a vaguely formulated business idea, using the VA 3 Approach, a distinctive value proposition is described, a value hierarchy is constructed and all available resources are listed systematically. Based on these aspects, the VA 3 Approach enforces a well-considered selection of governance structures. For a new business model, the VA 3 Approach constructs an e 3-value model and selects a suitable governance structure for all value activities. For an existing company, the essential questions that have founded the governance structure selection can be revealed and understood.