ADVANTAGES AND DISADVANTAGES OF A VALUE BASED APPROACH TO MANAGEMENT OF ENTERPRISE
Abstract
The article investigates the features of using a value-oriented approach to enterprise management in modern changing economic conditions. It is established, that the urgent problem today is to determine a reasonable target for value-oriented management. The application of indicators and models of enterprise valuation adequate to the Ukrainian economic conditions is analyzed. The advantages of the indicator of the value of the enterprise as the main criterion for assessing the efficiency of economic entities are identified. The foreign experience of introduction of the value-oriented approach in the management of the enterprises is analyzed. The main directions of increasing the value of the company are formulated. It is established, that the indicator in the system of value-oriented management approach should reflect the value of the company and the effectiveness of management decisions. The main goal of the value-oriented management system is formulated, which is to coordinate and motivate decision-making that will lead to long-term competitive advantages. It was found, that companies which use the principles of value-oriented approach in management, have advantages over companies in similar areas of business that use traditional tools for making management decisions. The advantages of the value-oriented approach and obstacles in its implementation in the management of Ukrainian enterprises are identified. According to the VBM approach, the main indicator of evaluating the results of the enterprise is its value. This indicator of the value-oriented approach has certain advantages over traditional criteria for assessing the effectiveness of the company. It is noted, that using the approach of cost-oriented management of the enterprise does not always cause positive changes in the company's activities, which is caused by such major problems as difficulties in setting motivational goals and inconsistency between EVA and shareholder value. It is proposed to take the maximization of the market value of the domestic enterprise as a benchmark for ensuring its positive results.
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