Key stages of the Value Based Management concept

Abstract

Today practically all financial analysts and managers consider the Value Based Management concept (VBM) to be the most correct system of realization of goals for company, which allows to take into consideration the concerns of all key stakeholders. This paper provides a review and analysis of key stages of the Value Based Management concept (VBM) evolution. Special attention is devoted to the concept based on the Shareholder Value Added model (SVA) of A. Rappaport, Economic Value Added (EVA) of Stern-Steward, Economic Profit of Copeland-Coller-Murrin and Cash Value Added (CVA) of German researcher T. Lewis. The analysis is devoted more to detecting the origin of each approach and understanding the logic used in each approach of management methods. Key words: value based management concept, economic value added, economic profit concept, value estimation, value drivers