New Metrics for Value-Based Management Enhancement of Performance Me
Value-Based Management, a widely applied reference for strategic management, aims at maximizing sustainable shareholder value creation. However, respective accounting metrics to measure the firm’s wealth creation, such as residual income and Economic Valu
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GABLER RESEARCH Unternehmensführung & Controlling Herausgegeben von Universitätsprofessor Dr. Dr. habil. Wolfgang Becker, Otto-Friedrich-Universität Bamberg und Universitätsprofessor Dr. Dr. h.c. Jürgen Weber, WHU – Otto Beisheim School of Management, Vallendar
Die Schriftenreihe präsentiert Ergebnisse der betriebswirtschaftlichen Forschung im Themenfeld Unternehmensführung und Controlling. Die Reihe dient der Weiterentwicklung eines ganzheitlich geprägten Management-Denkens, in dem das Controlling als übergreifende Koordinationsfunktion einen für die Theorie und Praxis der Führung zentralen Stellenwert einnimmt.
Annette Holler
New Metrics for Value-Based Management Enhancement of Performance Measurement and Empirical Evidence on Value-Relevance With a foreword by Professor Dr. Dirk Schiereck
RESEARCH
Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at http://dnb.d-nb.de.
Dissertation European Business School, Oestrich-Winkel, 2009 D 1540
1st Edition 2009 All rights reserved © Gabler | GWV Fachverlage GmbH, Wiesbaden 2009 Editorial Office: Claudia Jeske | Anita Wilke Gabler is part of the specialist publishing group Springer Science+Business Media. www.gabler.de No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the copyright holder. Registered and/or industrial names, trade names, trade descriptions etc. cited in this publication are part of the law for trade-mark protection and may not be used free in any form or by any means even if this is not specifically marked. Umschlaggestaltung: KünkelLopka Medienentwicklung, Heidelberg Printed on acid-free paper Printed in Germany ISBN 978-3-8349-1869-7
For Raphaela, Giulia, and Mauro
Foreword
Still today, the vast majority of the German DAX 30 corporations are explicitly comitted to the shareholder value idea. However, the stock return to shareholders is an inappropriate measure for internal performance management, so that companies revert to so-called Value-Based Management Systems. These systems derive accountingbased performance measures, which shall quantify whether and how much shareholder value has been generated by the management over a specific period (overall and by business unit). Data applied for calculating the performance measure has to be publicly available and, preferably, also separately disclosed, to allow capital market participants to project results of the performance measure on the stock price. Various metrics (net earnings, residual income, EVA, REVA), which also demonstrated some correlation with stock returns in empirical studies, have been implemented for performance measurement in the past, but these measures still show methodological deficits and also the correlation with the stock performa
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