engleski

Value Based Management and Corporative Objective Function

Rapid development of the information technology, increasing number of the participants in the capital markets, and the appereance of large number of institutional investors, created the new trend sin business. Large number of these changes is reflected in the understanding of the existence and the goals of the business. The development and deregulation of the capital market have resulted in the following phenomenon: for many firms, to be present in the capital market does not mean any more to gain the financial resources, but also to create a apositive image through higher prices of their shares. A capital is mobile, and its owners choose only those investments and instruments that ensure the satisfying return, related to the level of the risk they took. In search for better investment possibilities, they will invest their money even across the national boundaries. Therefore, it is more and more often emphasized that creation of the additional value, whether viewed from the standpoint of the individual investment or the whole firm, represents the basic goal of every management which menages some kind of business activity.

Value Based Management; Shareholder value; Stakeholder value; Performance measurement; Manager Incentives

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