Search results

1 – 10 of over 26000
To view the access options for this content please click here
Article
Publication date: 12 February 2018

John Henry Hall

The purpose of this paper is to identify the shareholder value creation measure best suited to express shareholder value creation for a particular industry.

Abstract

Purpose

The purpose of this paper is to identify the shareholder value creation measure best suited to express shareholder value creation for a particular industry.

Design/methodology/approach

The analysis was performed on 192 companies listed on the Johannesburg Stock Exchange, classified into nine different samples or industries. Five shareholder value creation measures were examined, namely market value added (MVA), a market-adjusted stock return, the market-to-book ratio, Tobin’s Q ratio, and the return on capital employed divided by the cost of equity.

Findings

An analysis of the nine categories of firms led to the identification of different measures that are suited to express value creation. Stock returns did not provide an appropriate value measure. Instead, depending on the specific industry, Tobin’s Q ratio, MVA, and the market-to-book ratio should be used to measure and express value creation.

Practical implications

For management, the value drivers identified for each industry present a clear indication of industry-specific variables upon which they can focus in operating activities to most efficiently increase shareholder value.

Originality/value

Unlike previous studies that use only one or two different shareholder value creation measures as dependent variables, this study uses five different value creation measures. Another contribution of this study is the compilation of a unique set of value drivers that explain shareholder value creation separately for each of the nine different categories of firms.

Details

International Journal of Productivity and Performance Management, vol. 67 no. 2
Type: Research Article
ISSN: 1741-0401

Keywords

To view the access options for this content please click here
Article
Publication date: 1 February 1988

Liam Fahey

Perhaps no other individual has written as extensively on value‐based planning as Alfred Rappaport. He is Leonard Spacek Professor of Accounting and Information Systems at…

Abstract

Perhaps no other individual has written as extensively on value‐based planning as Alfred Rappaport. He is Leonard Spacek Professor of Accounting and Information Systems at Northwestern University and Chairman of The Alcar Group, Inc., a Chicago‐based firm that provides management education, consulting, and software for shareholder value analysis. Rappapon first began to formulate his ideas on how companies should manage for shareholder value in the late 1970s. In his recent book, Creating Shareholder Value (New York: The Free Press, 1986), he strongly advocated making value‐based planning a more integral part of strategic management. And this was the issue on which Planning Review focused its line of questioning.

Details

Planning Review, vol. 16 no. 2
Type: Research Article
ISSN: 0094-064X

To view the access options for this content please click here
Article
Publication date: 19 September 2019

Abdulazeez Y.H. Saif-Alyousfi

The purpose of this paper is to examine the effect of bank specific, financial structure and macroeconomic factors on the shareholder value of banks in GCC economies…

Abstract

Purpose

The purpose of this paper is to examine the effect of bank specific, financial structure and macroeconomic factors on the shareholder value of banks in GCC economies during 2000–2017.

Design/methodology/approach

To estimate the model and analyze the data collected from the BankScope and World Bank World Development Indicator database, the author uses static panel estimation techniques as well as two-step difference and system dynamic generalized method of moments estimator.

Findings

The results show that banks that are highly dependent on non-traditional activities have higher shareholder value. Higher opportunity cost, capitalization and demand deposits result in a better bank shareholder value. Furthermore, banks with higher loan exposure and growth have better shareholder value. Non-performing loans and market risk have insignificant effects on bank shareholder value. However, GCC banks suffer from diseconomies of scale and scope. The author also finds that banks located in countries with high inflation rates, high rates of interest or in financially developed economies offer better shareholder value. High credit to the private sector reduces the bank shareholder value. The paper also provides evidence that the impact of financial turmoil on the shareholder value of the GCC banking sector is negative and significant and has severely weakened the GCC banking system.

Practical implications

The results of this study necessitate formulation of various policy measures that can counter the effects of shareholder value of banks.

Originality/value

The present study is among the first to address the influence of financial turmoil on bank shareholder value. It also studies new variables, such as demand deposits, non-performing loans, loan growth, non-interest revenue and off-balance sheet activities, which have not been examined in relation to bank shareholder value. It also applies both static techniques and dynamic panel estimation techniques to analyze the data. The analysis is carried out at the aggregate level as well as at the national level and also provides several robustness analyses using various model specifications.

Details

International Journal of Managerial Finance, vol. 16 no. 2
Type: Research Article
ISSN: 1743-9132

Keywords

To view the access options for this content please click here
Article
Publication date: 15 June 2012

Chee Wong, Heather Skipworth, Janet Godsell and Nemile Achimugu

The importance of supply chain alignment has been discussed since the birth of supply chain management (SCM). Yet it remains a major challenge for supply chains. This…

Downloads
5272

Abstract

Purpose

The importance of supply chain alignment has been discussed since the birth of supply chain management (SCM). Yet it remains a major challenge for supply chains. This paper aims to systematically review the cross disciplinary literature on supply chain alignment in order to identify, and develop constructs for enablers to alignment, and an associated set of hypotheses.

Design/methodology/approach

A systematic approach has been taken to the literature review, which ensures it is auditable and repeatable. The selection criteria are clearly aligned with the review question ensuring all literature pertinent to the question is identified and reviewed. Relevant information is extracted from the selected papers and synthesised into a set of hypotheses.

Findings

Six main constructs for the enablers of alignment are identified and defined: organisational structure, internal relational behaviour, customer relational behaviour, top management support, information sharing and business performance measurement system. While the literature is disparate, across different disciplines there is good support for these enablers. The relationships between supply chain alignment and shareholder and customer value are also argued with the support of the literature. Although each of the enablers is argued to positively affect shareholder and customer value, their interactions with one another are not well supported in the literature, either theoretically or empirically, and therefore this could be an area for further research.

Research limitations/implications

While the hypotheses remain theoretical, it is now possible to test them and understand the relative significance of the various enablers to alignment.

Practical implications

The significance of shareholder and customer alignment on the delivery of shareholder and customer value can be examined, thus moving towards a theory of supply chain alignment. This is needed since in practice companies are struggling with supply chain alignment.

Originality/value

The existing literature on supply chain alignment is disparate and multi‐disciplinary as this descriptive analysis shows, with 72 papers published in 43 different journals. Moreover, most of the papers focus on particular enablers, while this paper brings together six key enablers from the literature to produce a set of hypotheses.

Details

Supply Chain Management: An International Journal, vol. 17 no. 4
Type: Research Article
ISSN: 1359-8546

Keywords

To view the access options for this content please click here
Article
Publication date: 10 April 2007

Olivier Furrer, J. Rajendran Pandian and Howard Thomas

The paper aims to assess the impact of corporate strategy on shareholder value in decline and turnaround situations.

Downloads
5694

Abstract

Purpose

The paper aims to assess the impact of corporate strategy on shareholder value in decline and turnaround situations.

Design/methodology/approach

A sample of 45 turnaround firms was selected and matched against a control sample which did not face continuous decline over the time period studied. The impact of corporate strategy on shareholder value was tested using cumulative beta excess return measures to capture the long‐term basis of corporate strategy.

Findings

The paper finds that the beta excess return measures captured the hypothesized relationships between strategy and shareholder value for the sample firms studied.

Practical implications

Beta excess return measures are superior to case studies or event studies for identifying the long‐term effects of corporate strategy.

Originality/value

Relatively few studies have compared the strategies of turnaround firms with a matched sample of non‐declining firms. The use of cumulative beta excess returns to assess long‐term valuation of corporate strategy is original.

Details

Management Decision, vol. 45 no. 3
Type: Research Article
ISSN: 0025-1747

Keywords

To view the access options for this content please click here
Article
Publication date: 1 March 2004

Erkki K. Laitinen

The purpose of the research is to analyse the ability of nonfinancial factors to predict value creation in Finnish technology firms. Nonfinancial factors are defined in…

Abstract

The purpose of the research is to analyse the ability of nonfinancial factors to predict value creation in Finnish technology firms. Nonfinancial factors are defined in terms of a large set of variables on organizational characteristics, strategy, competitive stance, consistency of performance measurement, management control systems (MCSs), and quality of MCSs. Financial ratios are used as a benchmark. The hypotheses are that, firstly, nonfinancial factors include important information for prediction and, secondly, that they provide incremental information over financial ratios. The nonfinancial variables are drawn from a postal survey carried out in 1999. Financial variables for 1998–2001 are obtained for 40 private firms of the 110 firms responding to the survey. Shareholder value is estimated on the basis of the four‐year financial data for 2001. This value divided by the shareholder book value (estimated‐to‐book value ratio, EBV) as well as its drivers are predicted by past non‐financial and financial data. Partial Least Squares (PLS) method is used to analyse the importance of information in prediction. The results give support to the hypotheses. Moreover, the results show that nonfinancial factors yield important incremental information over financial ratios when predicting value drivers, that is, growth, profitability, and risk. Especially, financial ratios are weak in predicting growth.

Details

Review of Accounting and Finance, vol. 3 no. 3
Type: Research Article
ISSN: 1475-7702

Keywords

To view the access options for this content please click here
Article
Publication date: 23 November 2010

Terhi Chakhovich

This paper seeks to elaborate on how subject positions promoting shareholder value are infused with an outcome focus.

Abstract

Purpose

This paper seeks to elaborate on how subject positions promoting shareholder value are infused with an outcome focus.

Design/methodology/approach

The study employs Foucault's perspectives on government and the interrelations between objectivity and subjectivity in the analysis of in‐depth case data gathered in one shareholder value‐oriented‐listed company and one non‐listed company.

Findings

The outside financial market discipline that objectifies shareholder value‐oriented company executives makes them subjects in their own organisation, allowing them to redirect discipline onwards and thereby objectify their subordinates. The non‐listed company executives, due to the relatively closed governance structure of their company and the lack of outside ownership, are not subject to such continuous outside discipline; they lack the same access to the means to create tangible outcomes within their organisations. The subject positions promoting shareholder value are focused on outcomes, whereas the non‐listed company subject positions are focused on processes.

Research limitations/implications

The subject positions of actors within different types of non‐listed companies and listed companies without a shareholder focus form a target for future studies.

Originality/value

The study contributes to the literatures on manager subject position formation and shareholder value. These contributions are achieved by uncovering a novel consequence of subject position formation and by revealing a mechanism by which outcome focus is tied with shareholder value.

Details

Qualitative Research in Accounting & Management, vol. 7 no. 4
Type: Research Article
ISSN: 1176-6093

Keywords

To view the access options for this content please click here
Article
Publication date: 1 May 2006

Richard Tudway and Ana‐Maria Pascal

This purpose of this paper is to examine four separate though interconnected questions concerning corporations operating, in Anglo American jurisdictions.

Downloads
7556

Abstract

Purpose

This purpose of this paper is to examine four separate though interconnected questions concerning corporations operating, in Anglo American jurisdictions.

Design/methodology/approach

The paper first examines the nature of the limited liability corporation as an entity dedicated to maximizing shareholder value, and how far this role is consistent with the pursuit of wider policies of corporate social responsibility (CSR). Second, it reviews the ownership arrangements of the corporation, the fiduciary duties of board directors and how this is translated into the task of maximizing shareholder value through the pursuit of profits. Third, it investigates how directors position themselves commercially in maximizing shareholder value and whether shareholders express views on how shareholder value can best be maximized. Finally conclusions are drawn on how best corporations and their directors can address the challenge of meeting shareholder value and how far this implies realignment in terms of wider societal expectations. The method of research used includes an examination of statute law governing the corporation, judge's law, regulatory law, other soft law in the context of outsider controlled capital markets. Relevant published research material is also declared in the bibliography.

Findings

Conclusions drawn suggest that the premise of maximization of shareholder value may very well entail the pursuit by directors of wider social and economic objectives consistent with CSR, if this is consistent with the enhancement of shareholder value. They also point to a lack of clarity on the question of what is expected of directors in meeting their fiduciary and broader director's duties as expressed in the objective of maximizing shareholder value. Evidence suggests that there is little effective communication between shareholders and directors on how best shareholder value can be maximized. Specifically the analysis focuses on how best to overhaul the mechanisms of governance and accountability if directors and the shareholders they represent are to develop and execute rational commercial policies aimed at maximizing shareholder value.

Originality/value

The paper breaks new ground in linking CSR to the enhancement of shareholder value and in suggesting that directors may be negligent in their duty to promote shareholder value if they fail do so. The paper should be of interest to company directors, company legal advisors; other corporate lawyers involved in litigation against directors, and policy makers in government.

Details

Corporate Governance: The international journal of business in society, vol. 6 no. 3
Type: Research Article
ISSN: 1472-0701

Keywords

To view the access options for this content please click here
Article
Publication date: 1 May 1999

David Walters

Much of the literature in the field of logistics and supply management is concerned with the role that should be taken by business activities to add value for the customer…

Downloads
4338

Abstract

Much of the literature in the field of logistics and supply management is concerned with the role that should be taken by business activities to add value for the customer and the shareholder. One of the problems currently under discussion is how this may be achieved. Discusses the issues underlying shareholder value management and planning. It proposes that value drivers are identified and examined in the context of both value and cost implications when related to the broader objectives of delivering shareholder value. A model is proposed which links EVA criteria, operating management criteria and logistics options. The model offers managers the opportunity to explore operational options and their impact on shareholder value criteria.

Details

International Journal of Physical Distribution & Logistics Management, vol. 29 no. 4
Type: Research Article
ISSN: 0960-0035

Keywords

To view the access options for this content please click here
Article
Publication date: 22 June 2012

Agnieszka Leszczynska

Sustainability reports have become a new trend in corporate reporting. The purpose of this paper is to: evaluate the content of sustainability reports published by…

Downloads
4745

Abstract

Purpose

Sustainability reports have become a new trend in corporate reporting. The purpose of this paper is to: evaluate the content of sustainability reports published by international companies; define trend changes in reporting; and assess the extent to which sustainability reporting can contribute to shareholder value by evaluating their usefulness for shareholders. In particular, the paper looks for the answers to the following questions: Is information published in reports sufficient for shareholders? How do they evaluate the quality of the published reports? Has the complexity of reports increased in recent years? What important information should sustainability reports also include?

Design/methodology/approach

The study applied the method of expert opinion assessment. The analysis of the documentation covered the reports published by multinational organizations in 2005 and 2010. The assessment was performed by independent experts‐shareholders. Global Reporting Initiative (GRI) standards and methodology served as a point of reference.

Findings

The results point to an evolution in sustainability reports. Considering the reports prepared in 2005 and 2010, improvement in quality can be observed. An in‐depth analysis of those reports showed an increase in attention to detail of reporting in the fundamental spheres, i.e. economic, environmental, and social. The author also highly evaluated clarity and timeliness. However, important gaps were identified in respect of inclusiveness, relevance of information, and neutrality. Shareholders found general usefulness of sustainability reports insufficient.

Originality/value

Previous studies on sustainability reports aimed at evaluating sustainability development programs or directions in the evolution of reports but their usefulness has not been examined. No one previously is believed to have conducted a study of the quality of the reports published by multinational corporations, with their evaluation from the point of view of shareholders. Therefore, this paper provides a new insight into the study of sustainability reporting. Apart from contributing to the debate about shareholder value, the paper confronts current sustainability reports with their earlier versions.

Details

Industrial Management & Data Systems, vol. 112 no. 6
Type: Research Article
ISSN: 0263-5577

Keywords

1 – 10 of over 26000