Value based management has been one of the major financial topics of the last 10 years. the concept originated in the united States and made its way to Europe, challenging how financial management is handled in an enterprise. It has forced many companies to reevaluate their financial focus, often times leading to drastic strategic changes.

The international strategy consultancies like McKinsey and BCG were quick to address the trend by developing their own tools and have been fighting battles about which tool is the best suited to support value creation. In Continental Europe, the term shareholder value management has become a negative synonym for corporate lay-offs during this time and trade unions are stressing the fact that the European economic model is different to that of the United States.

Course Structure

This finance course will give a comprehensive overview of value based management and its application in the corporate world. In a first step, it will provide the financial basis for a comprehensive understanding of value based management. Based on this understanding, the focus of the course will be on how enterprises actually implement the concept in reality, providing specific application examples.

The major focus of the practical examples will be on the areas of capital expenditure planning, enterprise valuation and performance measurement. Particular attention will be given to international differences in financial thinking and the impact of these differences on corporate financial management.

Learning Goals

• Provide the financial basis for a comprehensive understanding of value based management
• Understand the practical implementation challenges of the concept
• Gain an overview how different enterprises have addressed the practical challenges
• Illustrate the practical consequences of VBM in the area of management accounting

Learning Methods

Practical case studies will form the core of the course. Students are expected to prepare the case studies as group assignments. For some case studies, the groups have to prepare presentations tackling specific aspects of the case study.