What is Value Based Management?
Definition.
First
Definition of value based management: 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
3. Measuring Value: valuation.
Second Definition of value
based management: 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).
References:
http://www.valuebasedmanagement.net/faq_what_is_value_based_management.html
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