What is Value Based
Management? Definition.
Definition 1: Value
Based Management is the management approach that ensures corporations are
run consistently on value (normally: maximizing shareholder value).
It is useful to understand that Value Based Management 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),
and
-
Measuring Value
(valuation).
Definition 2: Value
Based Management aims to provide consistency of:
-
the corporate
mission (business philosophy),
-
the corporate
strategy (courses of action to achieve corporate mission and purpose),
-
corporate governance
(who determines the corporate mission and regulates the activities of the
corporation),
-
the corporate
culture,
-
corporate
communication,
-
organization of the
corporation,
-
decision processes
and systems,
-
performance
management processes and systems, and
-
reward processes and
systems,
with the corporate
purpose and values a corporation wants to achieve (normally: maximizing
shareholder value).
Note 1: Value Based
Management is dependent on the corporate purpose and the corporate values.
Note 2: The corporate
purpose can either be economic (Shareholder Value)
or can also aim at other constituents directly (Stakeholder Value).
Compare:
Clarkson Principles |
History of Value Based
Management |
Benefits of Value Based Management | Intrinsic
Stakeholder Commitment |
Strategic
Stakeholder Management |
Seven Surprises
| Strategic
Intent
|
