Join getAbstract to access the summary!

Driving Shareholder Value

Join getAbstract to access the summary!

Driving Shareholder Value

Value-Building for Creating Shareholder Wealth

McGraw-Hill,

15 min read
10 take-aways
Text available

What's inside?

Value Drivers: More than just another lame cliché.

Editorial Rating

7

Qualities

  • Applicable

Recommendation

Every so often, the language of consultants seeps into general use throughout the business world and beyond. This is certainly the case with the phrase "value driver," which in the late 1990s became ubiquitous in corporate conference rooms. But how many of us have actually given detailed thought to what value drivers actually are, how they should be identified and managed, and how they should fit within the confines of your overall corporate strategy? Luckily, Roger Morin and Sherry Jarrell have given this subject more than enough thought to rescue a concept in dire danger of slipping into cliché. Warning: This is not a breezy, skim-it-in-an-afternoon, how-to book. If you don’t crunch numbers, this is not the book for you. However, getAbstract.com does recommend this book to anyone willing to grapple with its equations and graphs. They’re not too painful, and even if the strategic concepts are not entirely innovative, they do add weight to some overused and poorly understood business jargon.

Summary

Value-Based Management

An unprecedented wave of takeovers, shareholder activism and global competition has made corporate America aware of the importance of creating economic value for shareholders. Many companies now extol the virtues of maximizing shareholder value in their corporate mission statements, annual reports and investor communications. Even so, many of those same companies fail to see any direct connection between their business strategies and the market value of their business. You can’t increase shareholder value without incorporating that intent into all your business strategies and operations.

Understanding the relationship between strategy, finance and company value is the key to making consistent value-enhancing decisions. Value-based management (VBM) allows executives to understand how every one of their decisions is linked to economic cash flows. These, in turn, determine the company’s long-term value.

If you don’t exploit your corporation’s wealth-creation possibilities, someone else will, and their initiative could leave you on the outside looking in. When you implement a shareholder value orientation, you must do it throughout your entire...

About the Authors

Roger A. Morin, Ph.D. is a professor in Georgia State University’s Robinson College of Business Administration. He has more than 25 years of experience in executive training and corporate consulting for dozens of clients, including AT&T and Bell South. Sherry L. Jarrell. Ph.D., is assistant professor of finance and economics at Wake Forest University’s Babcock Graduate School of Management. She has also written for many publications including Journal of Business, Financial Management, Quality Managers Journal, Financial Practice and Education, and Harvard Business School Press.

Comment on this summary