Shareholder value drivers

Line managers who are focused on traditional drivers of shareholder value and view stakeholder-related issues as a distraction from their business objectives. 

Essentially, value drivers are performance drivers for each network partner and transactions are negotiated around the notion of optimizing the performance of the outcome of the transaction such that each partner has the result that meets the satisfaction of internal stakeholders (employees and shareholders) and external shareholders (end-user customers). Without this outcome, the longevity of the network structure is in doubt either it will fail due to the lack of overall economic viability or it will undergo structural (or repositioning activities) in order to find a structure that meets the returns expectations of all partners. 

The five basic drivers of enhanced shareholder value are shown in Figure 3.4. They are revenue growth, operating cost reduction, fixed capital efficiency, working capital efficiency and tax minimisation. All five of these drivers are directly and indirectly affected by logistics management and supply chain strategy. 

ROI is an important measure for assessing shareholder value and is underpinned by two main drivers ... 

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