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The term “management” is ubiquitous nowadays. Nevertheless, what management really is, or rather what its core is, often remains vague. Thirty years ago, Hans Ulrich spoke of a “societal function that is not understood” (Ulrich, 1984). He thus highlighted that although management is highly important, not only economically but also societally, its importance is often not explicitly addressed. Second, he indicated that the core of management is actually far from obvious (Malik, 2013; Tsoukas, 1994; Watson, 1994). We consider this unsatisfactory. Not only because management is so omnipresent today but also because it is becoming increasingly important and demanding (Cunliffe, 2014; Mintzberg, 2009; Ulrich, 1984).

Here we mean the core purpose of management, which often remains undefined in business administration (Malik, 2013; Ulrich, 1984): to shape value creation through division of labor, as today’s organizations do in the form of products and services for specific value creation addressees (customers, citizens, patients, students, etc.). Such value creation is increasingly preconditioned. It depends on specific knowledge, complex integrated processes, elaborate technical expertise, and sophisticated physical and technological infrastructures. Often, value creation also involves a large variety of actors, who may perceive and evaluate the value of value creation very differently in its overall context.

The three examples below illustrate just how diverse and complex modern value creation is:

• Take a young biotech enterprise: Its basic value creation may lie in developing new medication for cardiovascular disorders. Central to this value creation are scientific findings on mechanisms of action in the human body, new R&D processes (e.g., from systems biology), and new technologies (e.g., digital simulation models). These are sometimes developed by the company itself, sometimes in partnerships with other startups and established corporations, and sometimes are also taken over from these. At the same time, it is important to attract the best employees in the relevant fields of knowledge and to secure the necessary financial resources in several funding rounds. The key tasks – structuring this complexity, setting the right priorities, and establishing robust partner relationships with different stakeholders – all require effective management practice. [20]

• Or an orchestra: Its central value creation may lie in performing excellent concerts and going on successful tours, or in producing special recordings. Yet societal changes and digitalization are fundamentally changing the context of value creation: Concerts must reach new target groups (e.g., younger generations), tours intensify competition among orchestras (such competition is often global), the distribution of recordings is subject to new technical conditions (streaming, YouTube, etc.) and to altered economic rules of the game involving completely new business models. At the same time, orchestras need to keep offering traditional concerts and reinterpreting music for the present. These changes and the associated uncertainties must be carefully addressed by effective management practice.

• Or a hospital: Its central value creation lies in treating and healing patients. Medical and technical progress is leading to increasing specialization among doctors, nurses, therapists, etc. At the same time, technological support is growing in various areas (diagnosis, treatment, and patient data management). While medical records must now be kept electronically, patients may obtain wide-ranging information about their illnesses online. This is changing the relationship between health professionals and patients from a patronal relationship to a partnership. In addition, the growth in new treatment options, with corresponding resource requirements, substantially exceeds the financial resources flowing into healthcare through tax revenues, health insurance premiums, and self-paying patients.

As a result, not only treatment decisions are becoming more complex, but so are decisions associated with devising treatment offerings, as well as developing and efficiently using physical and technical infrastructures, medical devices, IT systems, etc. Medical or care-related knowhow alone no longer suffices to meet this challenge. What is required is effective management practice, one capable of integrating changing treatment options, associated patient expectations, and the ambitions and demands of different professions to advance innovative patient-centric value creation.

Against the background of these three examples, chapter 2 explains in detail the key reference point of management: organizational value creation. Chapter 3 introduces the SGMM, illustrates the purposes of management models, and explains how the SGMM came about. [21]