Recognizing Macroeconomic Fluctuations in Value Based Management

Arbeitspapier

Value Based Management (VBM) has become a common tool for ex ante and ex post evaluation of corporate strategies and projects from the perspective of shareholder value maximization (SVM). VBM-frameworks are designed to support investment and divestment decisions, ex post evaluation of management and their major strategic decisions, and bonus-systems. Traditional VBM frameworks make no distinction between sources of temporary changes in performance, and sources of performance reflecting the intrinsic competitiveness of the firm. Temporary changes in performance are often caused by macroeconomic fluctuations. In this article we develop an approach for “filtering” the impact of macroeconomic fluctuations out of measures of performance in order for management to obtain better information for purposes of investment, divestment, and exposure management decisions. We focus on filtering for purposes of performance assessment employed in compensation schemes. A case study illustrates the approach, and shows the potential magnitude of effects from macroeconomic events.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IUI Working Paper ; No. 574

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Criteria for Decision-Making under Risk and Uncertainty ; Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
• Thema: Value Based Management (VBM) ; Shareholder Value Analysis (SVA) ; Economic Value Added (EVA) ; Performance Measurement ; Macroeconomic Fluctuations ; Bonus System ; Management ; Shareholder Value ; Betriebliche Wertschöpfung ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Oxelheim, Lars ; Wihlborg, Clas
• Ereignis: Veröffentlichung
• (wer): The Research Institute of Industrial Economics (IUI)
• (wo): Stockholm
• (wann): 2002

Weitere Informationen

• Handle: http://hdl.handle.net/10419/94954
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ