Influence of the concept of value-based management on the value of the interprise

Petecki Ignacy
PhD, teacher, Social Sciences Akademy, Łódź, ul. Sienkiewicza 9, Poland, E-mail:petecki@petecki.eu, ORCID ID: https://orcid.org/0000-0003-4557-027Х

Cite this article:

Petecki I. (2023) Influence of the concept of value-based management on the value of the interprise. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Vplyv kontseptsii value-based management na vartist pidpryiemstva; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 10 (311), pp. 17-22.

Abstract

The article considers the influence of the concept of value-oriented management (VBM, Value Based Management) on the formation of enterprise value. It is determined that the chosen topic has been the subject of research by many scientists, however, it is not sufficiently covered in the context of studying the factors that affect the cost of enterprise and the efficiency of its activities. The need to find effective mechanisms for managing the cost of enterprise using modern concepts, the relevance of which is growing rapidly, has been determined. It is noted that making a profit in a certain period does not guarantee its receipt in the next period due to the fact that in the conditions of dynamic development of the external environment. Under conditions of uncertainty, enterprise value management is a complex process in terms of analyzing statistical performance indicators and evaluating them. Therefore, maximizing the value of the enterprise is the most optimal criterion for determining the efficiency of activities and demonstrates the aggregate characteristics of financial indicators in which stakeholders are interested. For the effective implementation of strategic plans in the activities of the enterprise, the factors that affect the cost of the enterprise and take into account the endogenous (internal) and exogenous (external) factors are considered. The dependence of the market value of enterprise (RVP) on the stages of its development is considered. The mechanism of business (enterprise) value management is presented on the basis of the concept of Value-based management, which covers the activities of the enterprise at all levels and contributes to the achievement of the strategic goal - maximizing the value of the business depending on the system characteristics, which have a cyclical nature of strategic and tactical management decisions based on a system of interrelated performance indicators and standards. Recommended for value maximization enterprises to implement the concept of Value-Based Management (VBM), which makes it possible to predict the occurrence of certain events and prepare predictable alternative solutions

Keywords

enterprise value, profit, valuation, management efficiency, concept of value-oriented management (VBM), enterprise value maximization.

JEL classification: G300, G320; DOI: 10.32680/2409-9260-2023-10-311-17-22

UD classification: 658.15

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