Creating Shareholder Value by Alfred Rappaport – In this substantially revised and updated edition of his business classic, Creating Shareholder Value. only reliable measure, is whether it creates economic value for shareholders. of his business classic, Creating Shareholder Value, Alfred Rappaport. VBM Thought Leader: Alfred Rappaport. Creating Shareholder Value. The New Standard for Business Performance. Alfred Rappaport About Alfred Rappaport.

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In the s corporate governance discussions are replete with references to “balancing the interests of all stakeholders. Readers will be particularly interested in Rappaport’s answers to three management performance evaluation questions: Customers demand high-quality products and services at competitive prices.

First, there is a significant wage and benefits premium that employees demand for the higher risk associated with a dangerous workplace. By clicking ‘Sign me up’ I acknowledge that I have read and agree to the privacy policy and terms of use. Consistent with the above premise, at least four major factors will induce management to adopt a shareholder orientation: The source of the problem here is not the use of the shareholder value approach. An active market for corporate control places limits on the divergence of interests between management and shareholders.

However, the implementation of shareholder value should not be viewed as either proprietary or a sustainable advantage, because global competitors are quickly incorporating it into their planning and decision making processes as well.

Creating Shareholder Value | Book by Alfred Rappaport | Official Publisher Page | Simon & Schuster

Those favoring privatization argue that allowing people to invest at least a part of their retirement money in an account similar to a k or an Individual Retirement Account would ensure the long-term viability of the Social Security system without major cuts in benefits or increases in taxes.

As is the case with other good ideas, rappaaport value has moved from being ignored to being rejected to becoming self-evident. Eric Connerly rated it really liked it Apr 28, Strong arguments and empirical evidence is given to explain the market’s valuation mechanism.


While the top executives in many companies often have relatively large percentages of their wealth invested in company stock, this is much less often the case for divisional and business unit managers. The problem instead is its misuse or nonuse, which has led to value-destroying downsizings for companies and their shareholders and uncalled-for dislocations and pain ehareholder employees.

The manager, however, can balance a project failure only against the other activities of the division or the company. As a result, the company began to lose money, lay off employees, and, finally, it declared bankruptcy. Thank you for signing up, fellow book lover! Brilliant and incisive, this is the one book that should be required reading for managers sharehollder investors who want to stay on the cutting edge of success in creatimg highly competitive global economy. For employees it means more jobs — in the short run.

If the company invests in a risky project, stockholders can always balance this risk against other risks in their presumably diversified portfolios.

It is, however, important to examine briefly the most frequent suggestion on how to align the interests of employees with those of shareholders. Now, in this substantially revised and updated edition of his business classic, Creating Shareholder Value, Alfred Rappaport provides managers and investors with the practical Ryan Hanson rated it it was amazing Dec 29, In contrast to the significant restructuring undertaken in the United States, overstaffed companies in Japan and Germany are just beginning to acknowledge that global competition will compel them to do the same.

Indeed, we would expect that the greater the proportion of personal wealth invested in company stock or tied to stock options, the greater would be management’s shareholder orientation. He is also affiliated with the Santa Fe Institute, a leading center for multi-disciplinary research in complex systems theory, and xreating on the board sharehloder directors of Sermo, an online community for physicians.

The passage in of the Occupational Health and Safety Act apparently did little to reduce job-related accidental deaths, since they declined at about the same rate before and after its passage.


This interference with market forces has led to less competitive, high-cost companies and unemployment rates more than twice those experienced in this country. Michael is the author of Think Twice: Shortcomings of Accounting Numbers.

Alfred Rappaport – Creating Shareholder Value

Duke Joo rated it really liked it May 13, How managers communicate their value to the labor market outside of their individual firms is less apparent. Page 8 – Even the most persistent advocate of shareholder value understands that without customer value there can be no shareholder value. BensonTom Bugnitz Alfrev preview – Columbia Business School Publishing, In too many cases, however, current layoffs are the byproduct of incumbent or prior management’s failure to pursue shareholder value strategies in earlier years.

In each of these cases the stock market predictably penalized the companies’ shares.

Creating Shareholder Value

This lower price, relative alfrd what it might be with more efficient management, offers an attractive takeover opportunity for another company, which in many cases will replace incumbent management. The price for avoiding this necessity, however, is eventually much more painful in human and economic terms. Because of its crearing and lack of enforceability, the corporate social responsibility model gets little support from policymakers and corporate governance activists today.

This is the case because the larger the investment in securities the greater the propensity of market movements to affect consumer spending decisions.

Rappaport also Co-founded L. Alfred Rappaport – Creating Shareholder Value.

In contrast, investors rappaoprt with their fund’s performance are free to move their money to another fund for a relatively small fee or in some cases no fee.