Further, Rappaport presents provocative new insights on shareholder value of his business classic, Creating Shareholder Value, Alfred Rappaport. It’s become fashionable to blame the pursuit of shareholder value for the ills besetting corporate America: managers and investors obsessed with next quarter’s. VBM Thought Leader: Alfred Rappaport. Creating Shareholder Value. The New Standard for Business Performance. Alfred Rappaport About Alfred Rappaport.

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After a decade of downsizings frequently blamed on shareholder value decision making, this book presents a new and indepth assessment of the rationale for shareholder value.

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

The increasing number of executive recruiting firms and the length of the “Who’s News” column in the Wall Street Journal are evidence that the managerial labor market is very active. It is a view of strategy that recognizes that companies not only compete within the boundaries of existing industries, they compete to shape the structure of future industries. Aug 20, InvestingByTheBooks. The recent acquisition of Duracell International by Gillette is analyzed in detail, enabling the reader to understand the critical information needed when assessing the risks and rewards of a merger from both sides of the negotiating table.

The ultimate test of corporate strategy, the only reliable measure, is whether it creates economic value for shareholders.

This important text makes it blatantly obvious that the short-termism that the shareholder movement often is accused of is a faulty later day rationalization.

None of them have the democratic freedom as shareholders do to buy or sell their shares.

VBM Thought Leader: Alfred Rappaport

Value is created rappapoft investing capital in the business that generates a return on investment which is higher than the cost for the invested capital. BayKay rated it shadeholder liked it Sep 06, Most executives and public policymakers recognize that increases in stock price reflects improvements in productivity and competitiveness, which benefit everyone with a stake in the company and the overall economy.

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 for employees.

Duke Joo rated it really liked it May 13, Just a moment while we sign you in to your Goodreads account. On the other hand, providing customer satisfaction does not automatically translate into shareholder value. The same commentators that just a few years ago were lambasting CEOs for underperforming against foreign competitors are now criticizing CEOs for downsizing to improve competitiveness.


In most cases CEOs are responding shareholdsr advances brought about by stunning new technology, pressure from more efficient domestic or foreign competitors, opportunities to produce better or less costly products by outsourcing, deregulation, or simply too much capacity chasing too little demand. If the company invests in a risky project, stockholders can always balance this risk against other risks in their presumably diversified portfolios.

Business people who have been jostled by the latest management fads and buzzwords will find refuge in Rappaport’s well-conceived and effective framework.

For employees it means more jobs — in the short run. Readers will be particularly interested in Rappaport’s answers to three management performance evaluation questions: In each of these cases the stock market predictably penalized the companies’ shares. Even the most persistent advocate of shareholder value understands that without customer value there can be creting shareholder value. It is, however, important to examine briefly the most frequent suggestion on how to align the interests of employees with those of shareholders.

Thus, trying to increase shareholder value includes handling all the difficult choices between investing now to hopefully generate higher cash flow in the future. The fourth and final factor influencing management’s shareholder orientation is the labor market for corporate executives.

Hence, the main audience is corporate managers but the book is equally useful to anyone on the financial m During the summer InvestingByTheBooks will review some older books that we never got around to writing about although we think they are important.

In Robert Monks and Nell Minow founded LENS, a fund exclusively devoted to investing in “companies with strong underlying values, but whose performance lags due to lack of focus by the management or the board.

Moreover the size of the targets continues to become larger. Refresh and try again. A business creates competitive advantage when the long-term value of its output or sales is greater than its total costs, including its cost of capital. How can employee interests be aligned with shareholder interests in the face of restructuring and layoff announcements that so often trigger increases in the share price?

This book is not yet featured on Listopia. While conflicts between customer value and shareholder interests can be quantified and appropriately resolved by sound shareholder value analysis, conflicts between employee and shareholder interests pose a substantially more difficult challenge. Creating Shareholder Value presents not just the basic principles and theoretical underpinnings of its subject matter but also their application through numerous well-chosen and up-to-date real-world examples.


After a decade of downsizings frequently blamed on shareholder value decision making, this book presents a new and indepth assessment of the rationale for shareholder value. Eric Connerly rated it really liked it Apr 28, The question here is whether these measures are linked reliably to the market price of the company’s shares.

Now, in this substantially revised and updated edition of his business classic, Creating Shareholder Value, Alfred Rappaport provides managers and investors with the practical None of them have the democratic freedom as shareholders do to buy or sell their shares. Managers compete for positions both within and outside of the firm. Some downsizing decisions are predicated on reporting better short-term earnings rather than focusing on the longer term position of the business.

This view further recognizes that a company’s long-term destiny depends on a financial relationship with each stakeholder that has an interest in the company. Rappaport starts the book explaining that objections to using a Discounted Cash Flow model do not hold.

Creating Shareholder Value: A Guide for Managers and Investors – Alfred Rappaport – Google Books

Second, there are workers’ compensation insurance premiums paid by the employer, which are affected by accident rates. President, Baxter International, Inc Dr. Books by Alfred Rappaport. Brilliant and incisive, this is the one book that should be required reading for managers and investors who want to stay on the cutting edge of success in a highly competitive cretaing economy. When we realize that shareholders are not “them” but crdating “us,” the case for shareholder value becomes even more compelling.

The threat of takeover is an essential means of constraining corporate managers who might choose to pursue personal goals at the expense of shareholders.

Customers demand high-quality products and services at competitive prices. The risk premium for a security is the product of the market risk premium times the individual security’s systematic risk, as measured by its beta coefficient.