Value Based Management

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What is Value-Based Management?

Value-based management (VBM) is a management approach that focuses on creating value for the company's stakeholders, including shareholders, customers, employees, and the community. The goal of VBM is to maximize the long-term value of the company by aligning all of the company's activities and decision-making with this objective.

VBM involves setting clear value-based goals and objectives for the company and then measuring and evaluating the company's performance against these goals. It also involves aligning the incentives and rewards of executives and employees with the creation of value, so that everyone in the company is working towards the same objectives.

VBM emphasizes the importance of making decisions based on the long-term value they will create, rather than just focusing on short-term financial performance. It also involves considering the impact of business decisions on all of the company's stakeholders, rather than just shareholders.

Overall, VBM is a holistic approach to management that seeks to create value for the company and all of its stakeholders through strategic decision-making and effective resource allocation.

See Also