How do organizations create value? What is the role of entrepreneurship in this process?

Organizations create value behind a set of forces and conditions that operate beyond organizations boundaries but affect its ability to acquire and use resources to create value. The value of an organization is created in three different stages; input, conversion, and output. The input value of an organization can be raw materials, machinery, knowledge, human resources, money, and capital. The organizations assets are the foundation for its input. The conversion stage is valued by the organizations inputs into outputs. The ability of an organization to adapt to its environment along with the quality of skills within the organization finally, the output stage of an organization is valued by the amount of goods and services released into the environment. These goods and services are then purchased by customers satisfying their needs. This in turns allows the organization to create a new supply of inputs to restart the process.

Entrepreneurship plays a vital role in this process of creating value in an organization. An entrepreneur recognizes opportunities in an environment to satisfy the needs of customers. First they must gather the resources, and then use those resources to meet the needs of customers. This cycle, as described above, creates value for an organization. It takes a person or group of people with the same goal to satisfy needs in a given environment that creates a successful organization.