Limitations to the value approach - Strategic Management

Like the two sides of a coin, Value Based Management has various advantages as well as certain disadvantages:

  • Search for a flawless valuation model with impeccable results can be quite a gruesome task. Every valuation model has its own share of loopholes and setbacks.
  • VBM is a holistic management philosophy which most of the time may need a change in culture. This, in turn could result in the consumption of huge amounts of resources and time in order to reach the desired end.
  • Treading down the wrong path by measuring the wrong things can lead to an inevitable loss of value(s).
  • Although training and consulting support may prove to be beneficial for Value Based Management, they can turn out to be highly priced and expensive.

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