The Significance Of Value Analysis And Value Engineering In United Foam Plc, Ilorin

THEORETICAL FRAMEWORK
This study makes used of the theories of the firm which are in two categories namely “Targeted and Encompassing theories of the firm.”
1.     Targeted Theories
Under the targeted theory, the single purpose of the organization is to maximize profit. They include;
Profit Maximization: under this theory, the organization is considered and viewed as a profit making machine that has as its characteristic the efficient utilization of the organizational resources in order to be profitable. Cyert and March(2007) asserted that “A key assumption is that the decision makers have access to perfect information and so fails to fully appreciate the different risks of alternative investment opportunities”
Market Value: This theory takes notice of the risks involved in an investment and the best possible decision to be taken to maximize the prevailing market value of securities of the organization. Seth and Thomas (2005) opined that “A key weakness of this theory is it fails to accommodate the cost of managers.”
2.    Encompassing Theories
The Encompassing theory goes beyond the targeted theories. It sees the wider view of the organization in respect to profit maximization. They include
Behavioural: According to Cyert and March (2007), this theory sees organization in terms of its behavior towards gaining satisfactory profit rather than just maximizing profit in large organizations, things get done through stakeholder conflict and bargaining which result to providing solution to problem.
Resource Dependency: The essence of organizations existence is to accomplish outstanding results through the use of its resources under the manager’s custody. According to Pfeffer and Salancik (2008), “organizations survive by maintaining support and obtaining resources from the external coalitions.”
Life Cycle: Under the life cycle theory, the firm is view to be involved in process/stages of development. Carbone, (2004) and Romani (2005)asserted that “Value Engineering as a cost reduction technique that has proven to be effective in the developed world in countries like U.S.A, Japan and Western Europe but with little or no application in developing countries especially in Africa”. Palmer et al, (2004) opines that “The search for alternative components therefore became imperative but these alternatives were equally unavailable. With this challenge, the search turned not to alternative components but rather to alternative methods of fulfilling the tasks of the components,” The procedure involves in ascertaining alternative methods for carrying out a given functions is known as “function analysis.” which has now been developed to as Value Engineering.
Drury (2006) asserted that “The aim of Value Engineering is also to achieve an assigned target product cost by
(i)     identifying improved product designs that reduce the product’s cost without sacrificing functionality and/or
(ii)     eliminating unnecessary functions that increase the product’s costs and for which customers are not prepared to pay extra for.” According to Sivaloganathan et al (2006), “Value Engineering is a form of cost benefit analysis where functions are viewed as the beneficial characteristics of the product.” Value Engineering technique is centered on value concept and it show whether a cost is worth incurring or not.