Creating Shareholder Value: A Guide for Managers and Investors (Hardcover)

~ (Author) "The idea that management's primary responsibility is to increase value has gained widespread acceptance in United States since the publication of Creating Shareholder Value in..." (more)
Key Phrases: value growth duration, market signals analysis, standard perpetuity model, Wall Street, Home Depot, Alcar Consulting Group (more...)

Editorial Reviews

Amazon.com Review

Should a company's management be most accountable to employees, customers, or management itself? In Creating Shareholder Value, Alfred Rappaport argues that management's primary responsibility is to company shareholders. First published 12 years ago, the ideas put forth by Rappaport have since become commonplace in companies around the world.

Rappaport eschews the most common measures of a company's performance, such as price-to-earnings ratios ("Cash is a fact, profit is an opinion"), return on investment, and equity measures, instead concentrating on developing a shareholder value approach that measures "value drivers" such as sales-growth rates, operating profit margins, and cost of capital. This revised and updated edition addresses the issues of corporate downsizing and the social responsibilities of business. It also includes new sections on the value of mergers and acquisitions and how to implement a shareholder value system. Both managers and investors alike will find this book useful.

Review

Harry M. Jansen Kraemer, Jr. President, Baxter International, Inc Dr. Rappaport does a phenomenal job of bridging the gap between shareholder value theory and practice. I highly recommend Creating Shareholder Value for CEOs, CFOs, business school students and anyone who wants to truly understand as well as create shareholder value. -- Review

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Product Details

• Hardcover: 224 pages
• Publisher: Free Press; Rev Sub edition (December 1, 1997)
• Language: English
• ISBN-10: 0684844109
• ISBN-13: 978-0684844107
• Product Dimensions: 9.3 x 6.1 x 0.9 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 4.6 out of 5 stars  See all reviews (9 customer reviews)
• Amazon.com Sales Rank: #336,842 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

19 of 20 people found the following review helpful:

3.0 out of 5 stars Good explanation of creating shareholder value, but..., June 8, 1999

By A Customer

Professor Rappaport's revised version of his 1986 book on creating shareholder value provides a good description of the value based management concept that he helped create. However, many of the chapters are stand alone sections that do not flow well together. In some chapters he does not provide enough depth on how this book can actually be used by managers. In addition, the chapters on using his concepts to formulate value-maximizing business strategies was somewhat lacking.

Nevertheless, the book was an easy read and many of his points were right on target. I would also highly recommend interested readers to check out "The Value Imperative" by Marakon Associates and "Valuation" by McKinsey & Co for more information on value based management.

11 of 12 people found the following review helpful:

5.0 out of 5 stars Valuation Fundamentals, September 28, 2001

By	E. Hengstmengel (alphen aan den rijn, - Netherlands) - See all my reviews (REAL NAME)

Given that investors value bonds by discounting future cash flows, it stands to reason that they value stocks in the same fashion. Alfred Rappaport is the founder of the shareholder value mindset which gained importance in the '80 and is widely accepted in this new millenium. Rappaport starts the book explaining that objections to using a discounted Cash Flow model do not hold. Strong arguments and empirical evidence is given to explain the market's valuation mechanism. What follows is a basic but thorough explanation of the 3 elements for valuing a company (cash flows , risk and the competitive advantage period). In the second part of the book, it will become clear for the reader DCF is closely linked to strategic analysis and is not in contradiction with stakeholder analysis, customer value analysis, Activity Based costing or any other tool. On the contrary, Rappaport shows DCF is a communication tool that helps investors understand a company's implied performance and how to (re)act. Together with the Valuation book from Copeland, Koller and Murrin this is the book you need.

4 of 4 people found the following review helpful:

4.0 out of 5 stars A good "HOW TO" think about Shareholdervalue" book., December 30, 1998

By A Customer

It would be nearly impossible to read such a book without finding some area of disagreement. However, as a means to provoke thought and gain a better understanding of the issue of shareholder value it does a fine job. The STRENGTH of the book is that it presents both concepts and content. This allows the reader to use the book as a touchstone when considering potential solutions for their particular area of interest and/or concern. The WEAKNESS of the book is that it tends to become academic and verbose (read boring) in the middle chapters.

On balance I recommend the book be read by anyone interested in the topic of shareholdervalue, EVA, etc. Pause to fully understand the good passages (particularly the concepts), and blow by the rest. It will most likely raise your level of thinking.