9
Value-based management
What topics are covered in this chapter?
Strategy development
Target setting
Action plans, budgets and training
Incentive programmes
Outcomes of value-based management
Summary
Value-based management is a practical operational application of the con-
cepts and frameworks presented earlier in this book. Consequently, this
chapter is mostly aimed towards people with an interest in managerial
issues, including executives, board members, entrepreneurs, etc.
As we have argued earlier in the book, the first step towards maximizing
the value of a company is to understand how to measure and calculate
its value accurately. Furthermore, the financial valuation is completely
dependent on the input variables and hence the company’s key value driv-
ers need to be analyzed. Let us now move on to a discussion regarding
how to implement these theories in a managerial context.
Value-based management (VBM) is a management approach focused on
maximizing corporate value and prioritizing decisions according to how
those decisions affect overall corporate value.
The basic concept is the transformation of DCF, EVA and other similar val-
uation models into a management tool for making major strategic as well
Get The Financial Times Guide to Corporate Valuation now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
