I. V. Ivashkovskaya. Value Based Management: A Challenge for Russian Managers

V.2, N4, 2004

The paper discusses key distinctive features of value based management (VBM), how it challenges the analysis of the firm and the treatment of its capital. The arguments to think about VBM as modern managerial innovation and major lessons for the Russian firms derived from the VBM’s innovative nature are provided. The author presents her vision of VBM as a system with five key components, the specific VBM cycle and a set of financial models and consultancy products. The paper discusses the challenges to strategic process within the firm due to VBM, the need for financial measurement of growth and for new approaches to the quality of growth assessment, focused on «multidimensional» growth. The author develops her vision for the shift in the analytical paradigm of the management teams of Russian firms and formulates the objectives for introducing value based approach.