Keywords: value–based management, VBM, shareholder value, automobile industry, automotive management
A value–based management perspective for the automotive industry
In recent years, the global automotive industry has generally recorded continual growth. The major market players in this industry are the original equipment manufacturers (OEMs) as well as suppliers at various stages of the value–added chain. This study examines the value–based management (VBM) strategy and its implementation by the automotive industry. The major findings of the study are four–fold. First, the automotive industry operates on the basis of the VBM model. Second, the overall goal of the VBM model there is to maximise the value of an organisation. Third, VBM enhances profitability in the automotive industry. Fourth, to achieve their target of creating value, organisations should design their VBM strategy to reflect their overall mission and goals.