Value Based Management

Die Veranstaltung "Value Based Management" richtet sich an Masterstudierende, die sich im Aufbaumodul Accounting and Taxation VI spezialisieren. Die Veranstaltung findet ab dem WS 2011/12 jeweils im Wintersemester statt. Ab dem Wintersemester 2016/17 wird die Veranstaltung ausschließlich in englischer Sprache angeboten. Die Klausur wird ebenfalls in englischer Sprache sein, wobei eine Bearbeitung in deutscher Sprache zulässig sein wird.

Den genauen Termin der Veranstaltung finden Sie in Jogustine.

Value Based Management

Vorlesung: Univ.-Prof. Dr. Louis Velthuis

Univ.-Prof. Dr. Louis Velthuis

Unterrichtssprache: englisch
Unterrichtsstunden: 4 SWS (Vorlesung mit integrierter Übung)

Course Overview

Departing from discussing the conflicting concepts of maximizing shareholder and stakeholder value this course covers the different aspects of implementing shareholder value management in a company. The focus of the course lies on the concept of residual income as a corporate and business unit performance measure. The course discusses the link to value creation of residual income and its possible advantages and disadvantages as a performance measure for corporate performance as well as for the performance of responsibility centers deeper in a company’s organizational hierarchy. The ability of residual income to provide managers with incentives to make present value maximizing decisions is discussed on a theoretical and practical basis.

The by far best known version of residual income in practice is the concept Economic Value Added (EVA). The conceptual framework of EVA is presented in detail. Several case studies are used to make the students get familiar with EVA calculations including the most relevant accounting adjustments proposed in practice and the problems and proposed solutions of calculating the cost of capital. Furthermore the alternative concepts Cash Value Added (CVA) and Earnings less Riskfree Interest Charge (ERIC) are introduced and discussed.

The use of financial and non- financial value drivers to complement the implementation of a company’s performance measurement system is also taken into consideration. Thereby the students are also introduced into the ratio analysis of a company’s financial statements to get the financial value drivers used in internal and external performance measurement.

Within the framework of management compensation the course describes and analyzes the complex problems associated with the design of compensation functions and performance measures in practice.

Course Structure

1. Main Fields of Application, Instruments & Requirements of Shareholder Value Management

2. Shareholder Value Approach and Maximizing Market Value

3. Traditional Performance Measures and their Limits

4. General Adequacy of Residual Income as a Performance Measure

5. Value Added Measures and Concepts: EVA

6. Value Added Measures and Concepts: CVA & ERIC

7. Importance and Limits of Adjustments

8. Determining the Cost of Capital

9. Risk-adjusted vs. Risk-free Costs of Capital as Hurdle Rates

10. Management Compensation Schemes: Practice vs. Theory

11. Implementing VBM, Value Drivers & Balanced Scorecard

Die aktuellen Vorlesungsunterlagen und Übungsblätter zu dieser Veranstaltung finden Sie im Downloadcenter. Informieren Sie sich bitte darüber hinaus laufend auf dem Online-Newsboard des Lehrstuhls für Controlling.

Basisliteratur der Veranstaltung

Weitere Quellen zu einzelnen Aspekten werden in der Vorlesung bekannt gegeben.