It was reported in 1997 that Zeneca, the UK pharmaceuticals group, in an attempt to link management activities to share price performance introduced the use of Value-based Management (VBM), which is based on cash-flow returns on investment. It was thought that this measure would be less complicated to use than similar profitability based measures such as Economic Value Added (EVA) which can be easily manipulated to show better performance. Zeneca's leadership found good value in this measure's u...
BPIR Categories8.2.5 Leaders review org performance/capabilities
14.1.1 Design & deploy performance measurement system
11.1.4 Manage cash flow