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Value-Based Management (VBM) Is a Framework for Making Key Decisions

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Essay

Value-based management (VBM) is a framework for making key decisions that add economic value to the business. Morin & Jarrell (2001) identified four aspects of VBM. Identify these four aspects and in your own words outline how these aspects assist managers in their decision making.


Definitions:

Difficulty

The measure of how challenging a task or problem is to understand, perform, or resolve.

Hobby

An activity done regularly in one's leisure time for pleasure, which can involve collecting, making, or engaging in a particular interest.

Retirement

The phase of life where one exits the workforce permanently, often due to age or health, leading to changes in lifestyle and income.

Financial Plan

A comprehensive evaluation of an individual's current and future financial state by using known variables to predict future income, asset values, and withdrawal plans.

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