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Value Based Management (VBM) (PowerPoint PPT)
PowerPoint (PPT) 22 Slides FlevyPro Document
DESCRIPTION
Value Based Management (VBM) is a management philosophy driven by the goal of maximizing shareholder value. VBM encompasses the processes for creating, managing, and measuring value.
VBM differs from a profit-focused way of managing business. Specifically, VBM means that the decisions that you make today are not simply driven by short-term profit. Instead, we consider the longer-term effects that the decisions will have on organizational sustainability and profitability, reflected in future cash flows. The fundamental principle of VBM is the belief that future cash flow and growth are the source of our company's value.
VBM asks people within a company to think like owners and to make decisions that will ultimately benefit the owners. Managers and executives must constantly look for investment and growth opportunities that will create value—and use the company's capital in ways that ensure long-term, sustainable success.
This PPT delves into the core components of Value Based Management, emphasizing the importance of a Value Creation Mindset and robust Management Processes and Systems. It highlights how a value creation mindset ensures senior managers are fully aware that their ultimate financial objective is maximizing value. The document also outlines the necessity of management processes and systems that encourage managers and employees to behave in a way that maximizes the value of the organization.
The presentation provides a detailed breakdown of how to define value through discounted cash flows (DCF) and why this metric is crucial for taking a long-term view while focusing on the balance sheet. It also includes practical examples of value drivers at various levels, from generic to operational, and offers guidelines for successful VBM implementation. This comprehensive guide is essential for any executive looking to embed a value-based approach within their organization, ensuring decisions are made with a focus on long-term value creation and sustainability.
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Source: Best Practices in Value Creation, Shareholder Value, Value Based Management, Value Drivers PowerPoint Slides: Value Based Management (VBM) PowerPoint (PPT) Presentation, PPT Lab
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