Theorizing the Value Creation - A Synthesis Approach

Through the synthesis model of value creation taking initial conditions and some mediating variables with independent and dependent variables into account simultaneously, this paper explains the interaction between innovation and firm performance in terms of the construct of firm power, predicts how innovation brings about a desirable outcome in what manners/under what conditions/in which contingencies, and finally suggests the emergence of dynamic management view (DMV) as a new paradigm of strategic adaptation by prompting to change the mindset from; reductionism to holism; the Porter`s value chain to the extended-value chain; focusing on value chain itself to on business paradigm as the mechanism to combine the extended-value chain with market customer needs; competitive advantage to business paradigm fit; industry structure to industrial system including factor and customer market as well as industry structure; static standpoint to dynamic perspective.