Value Based Management (VBM) Focus on Shareholders is Narrow

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Value Based Management (VBM) Focus on Shareholders is Narrow
Jose Luis Roces, Premium Member
VBM focus on shareholders interest is a narrow concept. To improve value in a lasting way, you also need to consider the employees and the clients in an equitable manner.

Stakeholder Management
Carol Peters, Member
I concur, employees and the clients are the hub for those of us in management. Thoughtful consideration of both are necessary for any leader to be effective within any organization. Personally, I believe a leader is only as good as the ethics and morality he/she possesses. Without stakeholder interest being considered as part of the decision making process by management, I dare to think how long an organization can survive.

Renew Value Based Management
Jose Luis Roces, Premium Member
@Carol Peters: I agree with your comments. To renew capitalism, we need a different type of management. As Gandhi said: "we must be the change we want to see in the world".

Value Based Management and Stakeholders
Olaf de Hemmer, Member
I'd say the company has to manage value for/from all stakeholders: customers (actual and potential), employees, shareholders (if there are!), but also suppliers, environment and society.

Value to Whom?
Peter Jetter, Member
The concept of value is dependent on value systems. Different stakeholders usually have different value systems and interests. So the question is: value to whom (and under which circumstances)?
Maximizing value for a single group of stakeholders is likely deteriorating value for other stakeholders.
A company that only considers its shareholders as stakeholders deliberately ignores other stakeholders’ interests and thus neglects major influences on desired outcomes.
An additional challenge is in the increased need to measure the value of intangibles and quantifying NET effects. Knowledge business is not a static linear assembly line. Dynamic and indirect contributions dominate value creation in networks.


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