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What is Value Based Management - Definition

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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:

  1. Creating Value (ways to actually increase or generate maximum future value ≈ strategy).Value Based Management VBM

  2. Managing for Value (governance, change management, organizational culture, communication, leadership), and

  3. Measuring Value (valuation).

Definition 2: Value Based Management aims to provide consistency of

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

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