Abstract
The term ‘value added’ consists of ‘Value’ and ‘Added’. The word value denotes the exchange power which one commodity or service possess in relation to the other. The word ‘Added’ refers to put something extra in the existing thing or to create something or innovative in addition to the existing knowledge. In brief value addition contributes to the worth of a product or service by making it comparatively more useful. It adds to the human satisfaction and utility. Value addition also adds to consumer surplus by making products or services viable. The contribution in utility or use or worth or satisfaction or importance is made by the efforts of different parties in an organization constituting the set up of an organization. These parties include Employees, Providers of Funds, Government, Society and Owners or Entrepreneur. This paper discusses how to evaluate value addition and thereby suggest ways of improving it. It will also create awareness towards value addition by the business concerns which will improve social creativity and common welfare.
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