Riskiness of value-creating corporate activities and their influence on strategic management of engineering companies

Jarmila Straková (), Jaroslav Kollmann (), Jaroslav Kollmann (), Yaroslava Kostiuk (), Yaroslava Kostiuk (), Mykola Palinchak () and Filip Černák ()
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Jarmila Straková: Institute of Technology and Business in České Budějovice, Czech Republic
Jaroslav Kollmann: Institute of Technology and Business in České Budějovice, Czech Republic
Jaroslav Kollmann: University of Žilina, Slovakia
Yaroslava Kostiuk: Institute of Technology and Business in České Budějovice, Czech Republic
Yaroslava Kostiuk: University of Žilina, Slovakia
Mykola Palinchak: Uzhhorod National University, Ukraine
Filip Černák: University of Prešov, Slovakia

Entrepreneurship and Sustainability Issues, 2023, vol. 10, issue 3, 383-398

Abstract: This paper presents a procedure for definition and analysis of value-creating corporate activities on an example of a selected engineering company and a newly proposed calculation of riskiness of the production process. The risk calculation is based on an analysis of the value chain or value stream of its primary activities. Three research questions were formulated within the framework of the solution concerning differentiation of the value stream in serial and custom production, significance of individual primary processes for creation of the corporate margin and differentiation of the degree of risk between serial and custom production. The obtained outputs from the model engineering enterprise showed that the intensity of added value creation is lower in serial production than in custom production. In terms of the importance of the primary activities for serial and custom production in the value chain, the production process can be considered dominant from the viewpoint of margin generation, followed by the technical preparation process. In addition to the already mentioned reduced level of generation of added value, the lower average riskiness of the production process was also found for serial production compared to custom production. The graphical presentation at the end of the paper suggests a correlation between the level of added value creation in partial production operations and their respective level of risk. The authors of the article assume that the presented results have general validity for engineering production enterprises, which will be the subject of follow-up case studies on similar topics.

Keywords: value chain; value stream; process added value; riskiness of production process (search for similar items in EconPapers)
JEL-codes: G32 L11 L23 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ssi:jouesi:v:10:y:2023:i:3:p:383-398

DOI: 10.9770/jesi.2023.10.3(25)

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