The notion of value-based management has become widely embraced by
corporate managers. As the authors of a recent article entitled, “The
Value-Based Management Commitment,”
)point out, the real problem associated with value-based management is
the development of appropriate metrics to achieve behavioral changes.
One challenge is that value-based management concepts never make it out
of the finance department. After reading this article, answer the
1. What is the goal of value-based management? Is its focus on reported earning or shareholder/stakeholder wealth?
2. Describe the difficulties in developing performance measures and
the role that the finance department should play in developing
3. What is one of the major problems associated with the budget process as it is used by most companies in short-term planning?
The just-in-time inventory system is designed to reduce the inventory
period. In essence, companies pay their suppliers to carry the inventory
for them. Reducing the inventory period reduces the operating cycle and
thus the cash cycle. This reduces the need for financing.
Consider what type of cost is being minimized and what costs are likely to increase. Please, explain.
Are JIT inventory policies appropriate for all industries?value-based mgt.docx
N.B: Need about 5 lines each for each question