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Value-Based Management, Corporate Social Responsibility, and the Purpose of the Corporation | |
The Purpose of a Corporation | p. 5 |
Adam Smith and the Invisible Hand | p. 6 |
A Stakeholder Perspective | p. 7 |
Value(s)-Based Management: A Middle Ground | p. 8 |
Summary: Creating Firm Value-Think Value(s)-Based Management | p. 10 |
John Mackey and Milton Friedman on the Goal of the Firm | p. 13 |
The Elements of Value-Based Management | p. 17 |
Wealth Creation Is Not Universal | p. 18 |
The Proper Design of a VsBM Program | p. 20 |
Alternative Valuation Paradigms: Earnings versus Discounted Cash Flow | p. 22 |
Connecting Business Strategies with the Creation of Firm Value | p. 23 |
Summary | p. 24 |
The Need to Measure What You Want to Manage | p. 26 |
The Need for a Single Metric | p. 27 |
Total Shareholder Return | p. 29 |
Total Market Value | p. 30 |
Accounting-Based Metrics | p. 31 |
Think Economic Profits, Not Accounting Profits | p. 32 |
Summary | p. 37 |
Accounting versus Economic ROIC | p. 39 |
More Problems with Accounting-Based Metrics | p. 42 |
The Finer Details of Value-Based Management and Corporate Social Responsibility | |
Free Cash-Flow Valuation: The Foundation of Value-Based Management | p. 49 |
The Beginning for Value-Based Management: Free Cash Flows | p. 50 |
What Is Free Cash Flow? | p. 51 |
Calculating a Firm's Free Cash Flows | p. 51 |
Calculating the Investors' Cash Flows | p. 53 |
Free Cash Flow and Firm Valuation | p. 55 |
Valuing the Firm: Framing the Analysis | p. 56 |
Free Cash Flows, but for How Long? | p. 56 |
Forecasting Free Cash Flows | p. 57 |
Computing a Firm's Intrinsic Value | p. 61 |
Determining the Discount Rate | p. 63 |
The Value Drivers: Digging Deeper | p. 65 |
Summary | p. 68 |
Pick a Name, Any Name: Economic Profit, Residual Income, or Economic Value Added | p. 69 |
The Fundamental Concept: Residual Income or Economic Profits | p. 70 |
Residual Income and Free Cash Flow | p. 71 |
An Illustration of Valuation | p. 72 |
A Comparison of the Residual Income and Free Cash Flow Approaches | p. 75 |
"Fine-Tuning" Residual Income with EVA | p. 75 |
What is EVA? | p. 76 |
Measuring a Firm's EVA | p. 77 |
Calculating NOPAT and Capital | p. 79 |
From EVA to MVA | p. 83 |
More Than a Financial Exercise | p. 87 |
Summary | p. 91 |
The Equivalence of the Residual Income and Discounted Dividends Valuation Approaches | p. 93 |
An Illustration of the Computation of EVA | p. 95 |
Performance Evaluation Using CFROI | p. 101 |
Corporate Social Responsibility: Putting the S in Value(s)-Based Management | p. 103 |
The Moral Argument for CSR | p. 104 |
The Economic Argument for CSR | p. 104 |
CSR within a VBM Framework: The Academic Evidence | p. 106 |
Driving the Value Drivers | p. 108 |
Red Mountain Retail Group: Creating Value through Relationships | p. 108 |
Southwest Airlines: The Employee Comes First | p. 110 |
Herman Miller, Inc.: Creating Wealth through Design and Innovation | p. 111 |
Whole Foods Market, Inc.: Creating Wealth through Whole Foods, Whole People, and Whole Planet | p. 112 |
Sony Blames Economic Value Added Mentality for Its Woes | p. 113 |
Summary | p. 116 |
VBM Applications | |
Project Evaluation Using the New Metrics | p. 121 |
Example Capital Investment Project | p. 122 |
Traditional Measures of Project Value | p. 122 |
Using EVA to Evaluate Project Value Creation | p. 124 |
Fixing the Problem | p. 124 |
Unequal Cash Flows and Positive NPV | p. 127 |
Summary | p. 127 |
The Equivalence of MVA and NPV | p. 132 |
Incentive Compensation: What You Measure and Reward Is What Gets Done | p. 133 |
All-Too-Common Mistakes | p. 136 |
Creating a Culture of Ownership | p. 139 |
Determining a Firm's Compensation Policy | p. 142 |
What Should the Level of Compensation Be? | p. 142 |
How Should Pay Be Linked to Performance? | p. 143 |
Formula for Determining Incentive Pay | p. 143 |
Single-Period Performance Measures and Managerial Incentives | p. 146 |
Managerial Decision Horizon and the Use of EVA | p. 146 |
Extending Managerial Horizons | p. 150 |
How Should Employee Compensation Be Structured? | p. 151 |
Fairness as an Additional Characteristic of a Firm's Compensation Policy | p. 152 |
Summary | p. 153 |
Whole Foods Market Executive Compensation Discussion and Analysis | p. 155 |
Lessons We Have Learned | |
Lessons Learned | p. 163 |
VBM Studies Based on Archival Data | p. 164 |
VBM Studies Based on Survey Data | p. 165 |
Factors Critical to the Success of VBM | p. 166 |
More Recent Survey Evidence | p. 168 |
Current CSR Research | p. 171 |
Summary | p. 172 |
Epilogue: Where We Are Now | p. 175 |
Notes | p. 181 |
References | p. 187 |
Index | p. 193 |
Table of Contents provided by Ingram. All Rights Reserved. |
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The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.