are the disadvantages of Value Based Management? VBM Drawbacks??
As often the case, the
drawbacks or disadvantages of Value Based Management are the opposite of
VBM is an
all-embracing, holistic management philosophy, often requiring culture
change. Because of this, large-scale VBM initiatives take considerable
time, resources and patience to be successful.
Value creation may
sound more simple than corporate strategy, but it isn't. It is actually
more or less the same.
Measuring for value,
performance management and balanced scorecard are very powerful management
support tools and processes, but have a cost of their own so it is not
advisable to go to deep in detail or use metrics that are over-complex.
Extreme caution must
be made not to measure the wrong things as this may almost certainly lead
to value destruction.
VBM requires strong
and explicit CEO and executive board support.
training and consulting support is advisable or even necessary, but can be
The perfect VBM or
valuation model has yet to be invented. No matter which one you choose,
there will always be drawbacks to consider.
Benefits of Value Based
History of Value Based