NRI Papers
No.56   October 15, 2002
  The Current State of Value-Based Management in Japan and the Road Map for Success  
Toru MORISAWA and Hiroshi KUROSAKI
1. In addition to business strategies, superior corporate management also has a substantial impact on increasing corporate value.
2. Based on a survey of all listed companies, Nomura Research Institute, Ltd. (NRI) identified 15 Key Factors for Success (KFS) in fields. They include: (1) approach toward management; (2) corporate governance; (3) decision-making processes; (4) plan, do, check and act (PDCA cycle); and (5) raising awareness with respect to increasing corporate value by verifying the potential factors for successful value-based management.
3. These 15 Key Factors include the clear commitment of the president concerning the orientation of management, careful linking of budgets and policies, the establishment of clear appraisal standards for executive compensation, and a higher degree of understanding of value-based management throughout the company.
4. NRI is developing systematic solutions for building appropriate decision-making mechanisms for the re-deployment of current business resources, and means to carry out management subsequent to such changes. In particular, emphasis is given to the use of the balanced scorecard approach as a method for strategically rebuilding the PDCA cycle, which serves as the foundation of management.
5. Management reform requires a seemingly contradictory approach of maximizing the benefits of past efforts through continuous reinforcement, while constantly taking on new challenges.
Contents
I Analysis of Value-Based Management in Japanese Companies
1 Increasing Recognition of Value-Based Management
2 Survey of Listed Companies
3 The Current State of Management Reform for Increasing Corporate Value
II The Current State of Value-Based Management and 15 Key Factors for Success
1 Approach toward Management
2 Corporate Governance
3 Decision-Making Processes
4 PDCA Cycle
5 Raising Awareness with Respect to Increasing Corporate Value
III A Management Methodology for Increasing Corporate Value
1 NRI's Approach to and Framework for VBM Solutions
2 Solutions Alone Do Not Produce Effective Reforms
3 Management Reform Strikes a Balance between Continuity and Innovation

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