This PPT slide, part of the 69-slide Corporate Strategy Primer PowerPoint presentation, presents a concise overview of value-oriented management, highlighting 2 primary concepts: value-based management and parenting advantage.

The focus of value-based management is to enhance shareholder value, which is articulated as the primary goal of corporate strategy. It emphasizes that corporate strategy can leverage various mechanisms to achieve this objective. The definition of shareholder value is tied to free cash flow and the weighted average cost of capital (WACC), indicating a financial-centric approach to assessing corporate performance. This section references key authors, including Rappaport and Copeland, who have contributed foundational ideas to this field.

On the other side, parenting advantage shifts the focus to the relationship between a corporate parent and its subsidiaries. It stresses that the parent organization should concentrate on businesses where it can provide additional value, distinguishing itself from other corporate parents. This section also cites notable works by Gould and Campbell, which underline the importance of strategic alignment between the parent and its individual businesses.

The slide suggests that while value-based management and discounted cash flow (DCF) valuations are useful, they may overlook significant option considerations. This implies a need for a more nuanced understanding of value creation that goes beyond traditional financial metrics.

Overall, the slide serves as a foundational summary for executives looking to understand the principles of value-oriented management and its implications for corporate strategy. It encourages a deeper exploration of how corporate structures can optimize value creation through strategic alignment and effective management of subsidiaries.

EXPLORE MORE SLIDES FROM THIS PRESENTATION

EXPLORE MORE PRESENTATIONS ON

Strategy Development Growth Strategy Corporate Strategy Shareholder Value Value Creation