Today's business world is characterized by increasing change – technological, cultural, economic and personal changes. The net effect of these changes is increased anxiety, insecurity and stress for employees, managers, and business owners and other stakeholders. The ability to adapt, change or even reinvent an organization is critically important to meeting the challenges of a competitive marketplace whether domestically or internationally. How do you reduce and/or alleviate anxiety, insecurity and stress? One must implement a values-based management in the organization. Numerous studies have been conducted over the years and most have concluded that a need exists for organizations to be managed by a common vision, purpose and set of values. The following essay outlines the meaning of value-based management, agency cost, and implementation of value-based management, its benefits and detriments as well as various valuation methods.
Today’s business world shows a huge diversification in the shareholders of one company. In most countries, each investor only holds a very small fraction of issued shares by one corporation. This also includes the senior management. Determining the objectives of the firm is not necessarily a straightforward task because the typical firm will have many types of stakeholders. Among these stakeholders are customers and suppliers, shareholders and creditors, managers and employees, as well as government and a variety of other special interest groups. More likely than not, the objectives of these different types of participants will be in conflict.
The main objective of every firm and its members is to make money and maximize the value. This goal is a little bit vague and may encompass various aspects and m ...