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 the free encyclopedia Value added refers to the additional value of a commodity over the cost of commodities used to produce it from the previous stage of production.
An example is the price of gasoline at the pump over the price of the oil in it.
In national accounts used in macroeconomics, it refers to the contribution of the factors of production, i.e., land, labor, and capital goods, to raising the value of a product and corresponds to the incomes received by the owners of these factors.
The factors of production provide "services" which raise the unit price of a product (X) relative to the cost per unit of intermediate goods used up in the production of X. Value added is shared between the factors of production (capital, labor, also human capital), giving rise to issues of distribution.
1000 Yen of miso soup is produced by a chef using pots, pans, and a stove, converting 500 Yen tofu and other ingredients. The chef and his or her tools are the "factors of production" while the tofu (and the other ingredients, ignored here) are the intermediate goods used up and converted into part of the soup. The tofu used was converted using 200 Yen of soy beans. The soy beans are the raw material used up and converted into the tofu. The soy beans were grown and harvested during the year. Assume, for simplicity, that the 200 Yen measures the value added in that sector. These beans are thus assumed to be simply results of the services of the factors of production. If we simply add up the results of the three stages, we get a total of 1700 Yen. But this counts the tofu twice, first by itself and then as part of the miso soup. The soy beans are counted three times, in all three stages. This is double (or triple) counting.  On the other hand, we can get an accurate estimate of the final product by using the value-added method: The value added in the first process is 1000 Yen (the soup) minus 500 Yen (the tofu), equalling 500 Yen. The value added in the second process is 500 Yen (the tofu) minus 200 Yen (the soy beans), equalling 300 Yen. The value added in the third process is, by assumption, 200 Yen. The sum of these three is 1000 Yen, which is the same as the value of the final product, the miso soup.  |
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Welcome to the Tero International Monthly eZine
Value added. We are familiar with the concept in business; in fact it underlies our initiatives and often our vision of how we can prosper in the marketplace. Value added also implies that every component of a product or a service is essential to both what it brings to the table and to the end result.
Have you ever thought of what your role is in the added value of your organization, your family or your community? Bill Gates talks about software that can shift human resources from rote data collection to value-added customer service and support where the human touch makes a profound difference. We assess our software, our systems, and our processes but do we take the time to analyze our human potential for adding value.
As part of the human process we are a profound component of value. The more value we bring to the equation, both in expertise and in our interactions, the more value added to the result.
This month's eZine focuses on simple ways to affirm the value you are adding to the mix. As Winston Churchill said, "We make a living by what we get. We make a life by what we give."
Ask Tero
This section contains questions asked of the training professionals at Tero. Do you have a question for Tero? Let us know! If there is a topic or question you would like to see addressed in a future eZine, please make suggestions so we can give you the resources you need. Thank you for the continued responses we receive each month.
Question: I have been asked to serve as a mentor to a member of our department. What initial steps should I make sure to take to ensure the relationship gets off to the right start?
Tero says: Congratulations on being flattered with an invitation to serve as a mentor. You are wise to be concerned about the first steps as they will set the stage for what follows in the weeks and months ahead. In your first meeting with your protege, ask him/her to describe his/her goals. Ask the individual what they expect/need from you as a mentor. Tell them what role you are able to play. Discuss logistics such as when to meet and how long to meet. Above all, agree on responsibilities. In most mentor/protege relationships, it is the responsibility of the protege to schedule meetings, report progress against goals and ask for feedback/advice. It is the responsibility of the mentor to be on time and prepared for meetings. Mentoring is a great opportunity to help another while practicing important communication, listening and feedback skills.
Question: I was recently hired and am trying to figure out all of the components of my position. When people ask me what I do for my organization, I am not sure how to describe my role. I am worried this doesn't promote a good impression of me or my organization. Can you help me in this?
Tero says: You are right on to be concerned about how you present yourself and your organization to others. How you describe yourself and your organization does help determine how you and your organization are perceived. It is important to have a "soundbite" ready which tells about you, your role and your organization. The goal in business is to be involved in significant conversations with others to build relationships for your business. In those conversations it is natural for someone to ask you about your role. There are two things you can do to address this. First, sit down with your manager and clarify your role if needed. Ask them how they would like you to describe your role, and how do they describe the work of the organization. Secondly, ask others in your department to share with you how they describe their roles and the organization. Use these examples to craft a soundbite for yourself. Remember your goal is significant conversations to build good business relationships. The soundbite is a crucial component of those larger conversations.
Feature Article - The Gift That Doesn't Have To Cost Money The season of Thanksgiving is upon us. At this time of year we are reminded to express gratitude for the things for which we are thankful. We are also challenged to find the silver lining in the situations for which we are not feeling particularly grateful.
Who benefits when we show our appreciation? It seems logical that the recipient of our well wishes is likely to be uplifted. Studies show that lack of appreciation is one of the top cited reasons why people leave their jobs and their domestic relationships. It follows therefore, that recognition is something that is coveted by the receiver.
Productivity and civility also increases. Think of the last time someone sincerely thanked you for a kindness. If you're like most of us, you found yourself feeling a connection with that individual. Before you know it, you're cheerfully doing all kinds of helpful things for the grateful person.
Conduct your own research study. Let's say you want your kids to be more helpful and self-starting around the house.
Professional Development Activity - Adding Value To Meetings
Meetings take up a large part of our workdays and our time committed to community service projects. This month we focus on tips for being a great meeting chair, and for being a contributing participant. Adapted from Letitia Baldridge's book Executive Manners we hope these tips will assist you in adding value to every meeting you are in .
Tips for Chairing the Meeting:
Tips for Meeting Participants:
Notes Adapted From "New Complete Guide To Executive Manners", Baldrige, 1993
Resources
Do you want to write more thank you notes but are concerned that your thank you note might sound lame? Are you worried that inking a note in your illegible handwriting may not communicate the sincerity you feel? For tips from Tero on writing thank you notes, click on the link below.
What's New at Tero
SHRM World Cafe
Inc. Magazine Update
A 5-hour Business Etiquette and Dining Tutorial workshop. December 4, 2008 (Des Moines), January 20, 2009 (Omaha) February 20, 2009 (Des Moines), April 23, 2009 (Des Moines) Image and Influence: Polishing Your Professional Look
IMPACT - How To Speak Your Way To Success
Time Management Through Goal Setting
Selecting Top Performers: Recruiting and Interviewing
Beyond Compromise: A Better Way To Negotiate
World Class: Managing Diverse Business Communications
Online Resources
Are you a graduate of a Tero workshop? Your feedback is important to us.
Click here to fill out an evaluation of how your Tero acquired knowledge has impacted your everyday work and life. This opportunity is available in each eZine or you can visit the Tero website at www.tero.com to give us your feedback.
Inspiration - Things to Think About
Life is a gift, and it offers us the privilege, opportunity, and responsibility to give something back by becoming more.
Adding value gives back to us as well as others. When we approach our day, our colleagues, our family, our organization, our community and/or our world with the mindset that we will add as much value to each person or endeavor we can, we give also to ourselves. We become more. In becoming more, we in turn give the best of our potential. Circular in motion, the giving and becoming become one.
Do you remember the Beatles song that stated these words?
So it is in our daily life. By adding value the short term gain is giving whatever we have added to more, the long term gain is our becoming and receiving more than we ever thought possible. The Tero International Monthly eZine is written for the graduates and friends of Tero training programs. It is published by Tero International, Inc., 1840 NW 118th Street, Suite 107, Des Moines, Iowa 50325. Copyright 2008, Tero International, Inc. All rights reserved.
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