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10 Ways to Create Shareholder Value

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Article critique:
- I need to summarize authors arguments
- Evaluate facts or data pertaining to finance and value
- Summarize the validity of the arguments
- Determine whether the arguments are supported using elements of financial persuasion
- Determine whether the author omits important financial data
- Evaluate the financial implications of the argument.
- I have only about ¾ of a page because the instructor wants it in our own words and only using 20% from references. I am used to using about 50% reference. Can you help?

See the following article: Rappaport, Alfred. "Ten ways to create shareholder value." Harvard Business Review 84.9 (2006): 66-77.

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Solution Summary

Performance principles for shareholder value are explained in a structured manner in this response. The answer includes references used.

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Summarize the author's arguments:

The author argues that the ten basic performance principles he lays down for value creation will help every company with a good business model to create shareholder value. According to the author most companies do not implement a majority of the ten principles laid down by him. If however, a company implements these principles then it will serve the long-term interests of the shareholders.. According to the author, companies focus on short-term gains so that the quarterly earnings targets are achieved. The author argues that the real benefit that the company gains is from the improvement that share-holder value orientation makes to the firm's long term growth strategy. The author argues that focusing on short-term performance measures are bound to fail in delivering on value creating growth. His contention is that such businesses are forced to concentrate on existing businesses and not on developing new businesses that fuel long term growth. According to the author those businesses that spend too much time on core businesses lead to a situation where there are no new opportunities for the business. According to the author even though there is a weak growth and declining margins businesses continue with its focus on core businesses. The investors' expectations are belied, new target growth rate is ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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