Shareholders value

At the time of better life, the Consumer Division was headed up by the late Stafford Taylor and, as well as improving shareholder value and customer satisfaction, he wanted the change to benefit employees and the wider community. 

Living on the Fault Line Managing for Shareholder Value in the Age of the Internet. New York Harper Business. 

The race to find the next blockbuster has never been more important in the pharmaceutical industry. The very existence of many companies may depend on the timely discovery of new chemical entities that can be developed into the next Celebrex or Lipitor . Adding to this is the need to reduce cost and increase shareholder value. Consequently, the productivity of the pharmaceutical industry has dramatically fallen short of its own expectations (1). 

California Management Review 28 9-40 Rappaport A (1998) Creating shareholder value, 2nd edn. The Free Press, New York... 

Foundation Develop-/ ment Expansion Diversifi-/ cation Maturity Shareholder value... 

Obviously, these six eras have occurred at different times in different parts of the world. In addition, the degree of participation has varied. In the early years, Europe led the way. Britain and Germany, with the USA joining in from the 1920s onwards, mainly drove the foundation and development phases of the industry. The expansion, diversification, and maturity eras took place in Europe and the United States at more or less the same time. They occurred in Asia rather later and somewhat less intensely. The era of shareholder value, however, came first and fastest to the United States. European firms have followed their US counterparts into this phase in the last ten years, and the same is currently happening at many Asian companies. 

To understand this recent evolution and the perspectives for the chemical industry, it is essential to understand the capital market point of view, which drives the strategies of most global chemical players today. The importance of the shareholder value era for the chemical industry is discussed in the following two chapters. 

In the early years of the shareholder value era, the current status and past development of the chemical industry are outlined ... 

The authors define six major eras of the chemical industry from its foundation through to maturity, ending with the most recent phase in which the focus is on the value created for investors -shareholder value. 

Capital Market Deviations as the Key Challenge for Shareholder Value Orientation... 

Shareholder value orientation (SHV) is by no means a new concept. Maximizing fundamental value to shareholders has been the dominant paradigm in finance and economics for decades and, after all, running a corporation in the primary interest of its shareholders, i.e., its owners, appears to be a straightforward concept in a market economy. 

Over the last decade in particular, shareholder value orientation has established itself as a guiding principle for corporate management, including the vast major-... 

In actual fact, however, shareholder value orientation is essentially about management decisions that create fundamental value. Fundamental value, defined as the sum of expected discounted cash flows available to shareholders, is by that definition a long-term concept. In theory, a company could pursue SHV without even caring about its share price (Fig. 2.1). 

Thus, doubts as to whether capital markets reflect a reasonable representation of the fundamental value of a company, and the significance and persistence of potential deviations, pose a significant conceptual and practical challenge to shareholder value orientation. 

In light of the results above, the rationale for SHV seems as valid as ever. However, to address their skepticism and try to manage the risks from capital market deviations, many companies need to develop a more sophisticated understanding of the true meaning of SHV - an advanced shareholder value orientation. 

As a further consequence of an advanced shareholder value orientation, a more targeted approach can be taken to investor relations. We feel that investor relations in many chemical companies today is predominantly aimed at providing timely, accurate, and exhaustive information to capital markets. Again, the assumption is that capital markets are perfectly efficient and will always evaluate this information correctly again, this does not match up with the real world. Behind the capital markets are investors with a wide variety of expectations and important specific investment preferences and institutional restrictions. In addition, it can be demonstrated that only a small number of investors with significant trading volume mainly influence stock prices in the short and medium term (Coyne, K. P. and Witter, J. W.). 

Shareholder value orientation has recently been scrutinized. 

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