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:

  1. Creating Value (ways to actually increase or generate maximum future value ~ Strategy)
  2. Managing for Value (governance, change management, organizational culture, communication, leadership)
  3. Measuring Value (valuation)

Source of Value Based Management:

J. H. M. de Jonge Management & Advisers