Value-Based Management with Corporate Social Responsibility

Value-Based Management with Corporate Social Responsibility

Value-Based Management with Corporate Social Responsibility

Value-Based Management with Corporate Social Responsibility


As the first decade of the 21st century winds down we have seen a sea change in society's attitudes toward finance. The 1990s can best be described as the decade of shareholder supremacy, with each firm trying to outdo the other in their allegiance to shareholder value creation, or as it came to be known, Value-Based Management (VBM). No one seemed to question this culture as the rising firm valuations translated into vast wealth creation for so many.

Three significant economic events have reshaped how the public feels about an unbridled devotion to VBM and have defined the last decade: the bubble in 2000, the infamous accounting scandals of 2001, and the collapse of the credit markets in 2007-2008. In all three of these events the CEOs were portrayed as reckless and greedy and Wall Street went from an object of admiration to an object of scorn.

The first edition of this book, Value Based Management: The Corporate Response to the Shareholder Revolution was written to help explain the underpinnings of Value-Based Management. At the time of its publication, few questioned whether the concept was the proper thing to do. Instead, the debate was focused on how to implement a VBM program. With this new second edition, the authors look at VBM after having seen it through good times and bad. It is not their intent to play the blame game or point fingers. Nor is it their intent to provide an impassioned defense of VBM. Instead they provide an academic appraisal of VBM, where is has been, where it is now, and where they see it going.


An important task for top management in the next society’s corpora
tion will be to balance the three dimensions of the corporation: as an
economic organization, as a human organization, and as an increas
ingly important social organization.

—Peter F. Drucker, The Daily Drucker

We begin our look into value(s)-based management (V BM) by first considering the fundamental question of what goal public for-profit corporations should set for themselves. This is not a trivial question, and it deserves careful thought. Should corporations strive to maximize value for their shareholders? Or is such a goal synonymous with greed? Would a more appropriate objective be the betterment of society? If so, which stakeholders, employees, customers, communities, governments, or other entities should take priority? If the answer to this question is none, how should tradeoffs among the conflicting needs of these various groups be made? Or is maximizing value for shareholders somehow the same thing as enhancing society in general? These are not easy questions, but answers to them are essential to determining whether and how to implement value(s)-based management.

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.