Topic 21, Exercise 2 Balanced Planning to Achieve Short- and Long-Term Objectives. The notion of value-based management has become widely embraced by corporate managers. As the authors of a recent article entitled, “The Value-Based Management Commitment,” point out, the real problem associated with value-based management is the development of appropriate metrics to achieve behavioral changes. One challenge is that value-based management concepts never make it out of the finance department. After reading this article, answer the following questions: 1. What is the goal of value-based management? Is its focus on reported earning or shareholder/stakeholder wealth? The simple goal of value-based management is to improve the performance of the firm. Value-based management focuses on both current performance—as measured by tools such as Economic Value Added—and future performance represented by the present value of expected increases in performance. 2.
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This note was uploaded on 09/13/2011 for the course FIN 6301 taught by Professor El-asmawanti during the Fall '09 term at University of Texas at Dallas, Richardson.