INCENTIVE IN BANKING SECTOR

Incentive in Banking Sector

Incentive in Banking Sector

Introduction

Today, argument is over that essential to any business net is the underlying system through which it produces value. This value system construct is based on the notion that each product/service requires a set of value creating activities performed by a number of actors forming a value creating system. Value system is not a new concept, and has been given different shades of meaning by researchers, who used the value chain concept primarily to refer to the firm level activities through which a firm produces value for its customers. However, he also conceived industries as interlinked value chains of individual firms. Porter's value chain construct for linearity and for primarily assuming competition driven market exchange relationships between independent firms. While not using the term value system, provides an articulated conceptual scheme for describing a business network. It consists of interrelated layers of three basic concepts: actors, resources and activities. Similar to this conceptualization is description of value creating systems as 'a set of activities creating value for customers; activities are carried out by economic players using sets of human, tangible and intangible resources'. Based primarily on scheme, that defines the value system of a business net as a set of specific activities carried out by the actors constituting the net. We also share the view that these activities are based on the resource constellation controlled by the actors. One should note that resources in this context are to be understood in a broad manner. Besides assets they contain capabilities. These have a fundamental role as they define not only the current value activities that an actor can carry out but also its capacity to renew the current capabilities and development new ones through the so called dynamic capabilities. In this respect the bundle of capabilities that a net has and controls influences directly the efficiency of its current value production and its renewal potential. Finally, it should be emphasized that it is the customers who, through their buying and consuming activities define the value of the offer produced by the net. In fact, as pointed and embraced by the interaction and network perspectives in buyer supplier research, customers are always co producers of value. (Hiroshi, 2003, 19-21)

Following this reasoning any bank can be recounted through its inherent value conceiving system. How helpful is the value scheme system as there can conspicuously be as numerous value scheme configurations as there are banks? We propose that the key attribute of the value scheme from the classification viewpoint of net is the grade of conclusion of the system. In other phrases, how well renowned are the value undertakings of the net and the capabilities (resources) of the actors to convey them out, and to what span can these value undertakings be specifically specified? As value undertakings are vitally founded on information, embedded in capabilities manifested in bank routines; the grade of conclusion is associated to the grade of codification of ...