Elements of Value Based Management:
Components and structure of Value Based Management ( VBM )
Principle:
Value Based Management is the management approach that ensures corporations are run consistently on value (normally; maximizing shareholder value)
Issues:
Talkers- Partial adopters True value transformers
Management capabilities, data quality
External factors change
Internal cooperation
In M&A
Value of combined companies – (Stand alone value of acquirer + Stand alone value of Target) = Strategic Value In managing the business
Applications:
External value assessment of acquisition target
Internal tool of managing value (VBM)
It is useful to understand that VBM includes all three of the following:
- Creating Value (ways to actually increase or generate maximum future value ~ Strategy)
- Managing for Value (governance, change management, organizational culture, communication, leadership)
- Measuring Value (valuation)
Source of Value Based Management:
J. H. M. de Jonge Management & Advisers