VBM logo

Disadvantages of Value Based Management

Categories: Articles  |  Books  |  Dictionary  |  Faq  |  Home  |  Leaders  |  Organizations  |  Search


 

What are the disadvantages of Value Based Management? VBM Drawbacks??

As often the case, the drawbacks or disadvantages of Value Based Management are the opposite of its benefits.

  • VBM is an all-embracing, holistic management philosophy, often requiring culture change. Because of this, large-scale VBM initiatives take considerable time, resources and patience to be successful.

  • Value creation may sound more simple than corporate strategy, but it isn't. It is actually more or less the same.

  • Measuring for value, performance management and balanced scorecard are very powerful management support tools and processes, but have a cost of their own so it is not advisable to go to deep in detail or use metrics that are over-complex.

  • Extreme caution must be made not to measure the wrong things as this may almost certainly lead to value destruction.

  • VBM requires strong and explicit CEO and executive board support.

  • Comprehensive training and consulting support is advisable or even necessary, but can be quite costly.

  • The perfect VBM or valuation model has yet to be invented. No matter which one you choose, there will always be drawbacks to consider.

Compare: Benefits of Value Based Management  |  History of Value Based Management

 

   
 

About us  |  Advertise  |  Privacy  |  Support us  |  Terms of Service

2016 Value Based Management.net - Last updated: Jan 6th, 2016 - All names by their owners

 

Summaries of 2,000 management methods