1. Word of theWeek
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mktg@roadmapit.com +91 413-4207 333
Value-Based Management
VBM is the management approach or philosophy
whereby top executives and managers focus on the creation,
management, and measurement of corporate value. The
value of a company is determined by its discounted future
cash flows (DCF). Value is created only when companies
invest capital at returns that exceed the cost of that capital.
VBM focuses on how companies maximize their discounted
future cash flows in both major strategic and everyday
operating decisions.

2. Word of theWeek
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mktg@roadmapit.com +91 413-4207 333
The generic VBM framework encompasses the
processes for creating, managing, and measuring value.
Value
Corporate
Governance
Financial
Strategic
Strategic

3. Word of theWeek
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mktg@roadmapit.com +91 413-4207 333
Few Critical Benefits of Value-Based Management
Can maximize value creation consistently.
It increases corporate transparency.
It helps organizations deal with
globalized and deregulated capital markets.
Aligns the interests of (top) managers with
the interests of shareholders and stakeholders.
Encourages value-creating investments.
Improves the allocation of resources.
It helps to better manage increased complexity
and greater uncertainty and risks.

4. Word of theWeek
www.roadmapit.com
mktg@roadmapit.com +91 413-4207 333
Pipeline for the Value-Based Management Process
Develop strategies &
develop organization design
Develop action plans,
select measures & set targets
Increase shareholder
value
Identify value drivers
Evaluate performance
Identify organization
objectives