Superior performance through value-based management

Abstract

Value-based management provides managers with tools and techniques supporting the development and implementation of value-creating strategies. It further offers incentives which encourage managers to realize only those strategies which create value. In this chapter we present a brief overview of four important concepts of value-based management and of their popularity among the DAX-23 companies. Because of its extreme importance we then portray the EVA/MVA concept of Stern/Stewart in more detail. Moreover, we outline selected applications and techniques of value-based management with reference to strategy development,mergers & acquisitions, and performance management. We substantiate our theoretical discussion with an empirical analysis of the value creation of the DAX-23 companies. Lastly, we evaluate German utility companies' EVAs and compare them to EVAs of Austrian and Swiss utilities. © 2009 Springer-Verlag Berlin Heidelberg.