Value Management (Company's Response to Shareholder Change)

Author: (USA) Martin (Martin, J.D.), (USA) Petty (Petty, J.W.) wrote, Lou Fang translated
Publisher:
Publish Date: 2005-08-01
Features: Why do some companies create value for shareholders while others reduce shareholder value? An effective set of value management tools can produce vastly different results. The number of companies that reduce shareholder value far exceeds the star companies on Wall Street that add value—this is exactly what investors don't want to see. As the call to prioritize shareholder value growth grows louder, corporate managers have begun to widely adopt value management methods. As a practical response to shareholder opinions, value management (VBM) allows financial managers to autonomously plan, monitor, and control company operations, but only if it benefits shareholder value. This book was thus created. Based on the authors' long-term research findings and extensive studies of numerous companies that have successfully implemented VBM systems, it provides a detailed description of currently common models, such as the Free Cash Flow method, Economic Value Added (EVA) or Market Value Added (MVA) method, and Cash Flow Return on Investment (CFROI). Drawing on the lessons learned from the application of VBM management methods across different industries, the book analyzes the advantages and disadvantages of each model, guiding managers on how to select and apply the most suitable model for their company. The core of value management is to encourage employees to think and work with an owner's mindset. By establishing evaluation and reward mechanisms that focus on capital markets, this book links employee performance with corporate incentives and rewards, helping capital operators to build a virtuous cycle of value creation that satisfies all shareholders.