The notion of value-based management has become widely embraced by corporate managers. As the authors of a recent article entitled, "The Value-Based...

The notion of value-based management has become widely embraced by corporate managers. As the authors of a recent article entitled, “The Value-Based Management Commitment,” (http://businessfinancemag.com/bpm/value-based-management-commitment )point out, the real problem associated with value-based management is the development of appropriate metrics to achieve behavioral changes. One challenge is that value-based management concepts never make it out of the finance department. After reading this article, answer the following questions:

1. What is the goal of value-based management? Is its focus on reported earning or shareholder/stakeholder wealth?

2. Describe the difficulties in developing performance measures and the role that the finance department should play in developing appropriate measures.

3. What is one of the major problems associated with the budget process as it is used by most companies in short-term planning