This conceptual paper seeks to identify the factors external and internal to growing firms that make it necessary – in fact, inevitable – to change the traditional managerial perspective that aims at profit maximization – which is valid for small firms in the immediate start-up period and for family-run enterprises – in favor of the new approach that views the production of shareholder value as the primary objective of management. The basic thesis is that Value Based Management does not respond to tendencies in the capital market which reward companies with higher profits, but rather is the result of intrinsic needs in expanding organizations.
As companies expand in size and complexity, and as the formation of diversified business portfolios becomes more frequent, it becomes natural and inevitable to introduce Value Based Management as a normal management approach. In order to take account of this assumption we have considered five sources of explanation: the stimulus of economic growth, the genesis of the managerial firm and the separation of ownership and control, and the models elaborated by Flamholtz, Greiner and Mella.
|Keywords:||Value Based Management, Flamholtz Model, Greiner Model, Mella Model|
Chair of Business Administration, Department of Management Research, Faculty of Economics, University of Pavia, Pavia, Italy
Lecturer, Faculty of Economics, University of Pavia, Department of Business Research, University of Pavia, Pavia, Italy
There are currently no reviews of this product.Write a Review