No.14   September 1, 2000   Integrated Value Management:A Multi-Faceted Approach to Creating Corporate Value   Shinichi SHIBAYAMA        An increasing number of companies are paying attention to their share price and corporate value. At NRI we have developed an integrated framework of management based on corporate value that we have labeled "Integrated Value Management" (IVM).    IVM comprises three aspects of management: (1) a decision system that uses value as the basis for management decisions (e.g., on how to allocate resources) and seeks to create value from the top down; (2) an incentive system that uses value to assess organizational structures and staff, and seeks to create value from the bottom up; and (3) a communication system that uses value as a common language to develop a common set of values both inside and outside the company, and thereby create value. As the concept of the cost of capital is central to all three, it is important to understand and use this concept properly. Contents I Corporate Value as the Basis of Management 1 Why Management Needs to Be Aware of Corporate Value 2 A Proper Understanding of the Cost of Capital as the First Step to Increasing Corporate Value 3 A Growing Awareness of the Cost of Capital II Actual and Theoretical Share Prices 1 Actual and Theoretical Share Prices in Relative Terms 2 Companies with a High Share Price Need to Achieve the Earnings Growth Expected by the Market 3 Companies with a Low Share Price Need to Communicate More Effectively with the Market III The Need for a Value-Based Approach to Management 1 Reforming a Company's Decision-Making System 2 Restructuring the Incentive System 3 Creating a New Communication System IV Towards Integrated Value Management 1 The Three Systems of IVM 2 Common Misconceptions About the Cost of Capital 3 Unresolved Issues in Calculating the Cost of Capital V Creating Corporate Value from Visions of the Future--the Fifth Resource GO to PDF