Question

What is value management, in the context of corporate valuation and decision making?

Answer 1

Value Management is used extensively in corporate valuation and decision making. Under Value Management the managers compare alternative strategies to determine the best strategy which increases the value of the firm. Business owners can use Value Management for assessing mergers and acquisitions, setting up incentive plans for the management and estate planning. Under Value Management the management processes and systems are set in such a way which encourages the employees and the managers to act in a way that maximizes the value of the organisation. Traditional Matrix searches earnings are not always indicators of value creation. The company should set targets of discounted cash flow values which is the most direct measure of value of the business. Regular planning and monitoring of the business activities are also aimed towards increasing the value of the firm.