Value Based Management: The Corporate Response to the Shareholder Revolution

By J. William Petty II, John D. Martin, James S. Wallace

Why do some firms create extraordinary value for shareholders, while others destroy it? A powerful suite of value based management tools can make the difference. Value based management (VBM) refers to tools that financial managers can use to plan, monitor, and control a firm's operations in ways that enhance shareholder value. This timely book--based on the authors' research and on an extensive study of firms that have successfully implemented VBM systems--provides the first objective, field-tested synthesis of the most popular models in use today: the free cash flow method, the economic value added/market value added (EVA/MVA) method, and the cash flow return on investment approach (CFROI). Pointing to lessons learned by VBM adopters in a wide variety of industries, the authors outline the advantages and disadvantages of each model, and guide managers in electing, implementing, and operating one that best fits their organization. At its essence, value based management involves transforming behavior in a way that encourages employees to think and act like owners. Laying the foundation for building a capital market-focused measurement and reward system that ties employee-level performance to owner-level rewards, this book will help today's leaders establish a continuous cycle of value creation that benefits all stakeholders of a company.

• Format: Hardcover
• Language: English
• ISBN: 0875848001
• ISBN13: 9780875848006
• Release Date: January 2000
• Publisher: Oxford University Press, USA
• Length: 249 Pages
• Weight: 1.30 lbs.
• Dimensions: 1.2" x 9.0" x 6.1"

Customer Reviews

VBM for Starters

Martin's book is an excellent introduction to the practice of Value Based Management. Although it is far from being an MBA type book, it explains the basics and shows some good examples. Maybe the strongest point of the book is the comparison of several approaches used by the biggest consulting companies sponsoring VBM: Stern Stewart's EVA versus BCG's and McKinsey's measures. When you're ready to climb another step, the best choice is Young and O'Byrne's "EVA and Value Based Management". It goes deep in details of implementation of EVA based systems, is comprehensive and technically advanced and also give pros and cons of the measure.