Linkage of Management Decisions to Shareholder’s Value

Abstract

In this paper, the author investigated the influence of management decisions like capital structure, dividend policies, remunerations, credit policy decisions and investment decisions on shareholder wealth maximization. The main objective of this paper is to increase awareness and relationship between management and shareholders of the companies. To achieve the objective, portfolio theory, capital asset pricing model and modern financial theory providing evidence on the linkage between management decisions to shareholder’s value. Shareholders are only concerned about the value of shares of the company and the amount of return in the form of dividend paid. Thus in order to meet the demands of the shareholders of the company, managers needs to increase their abilities and skills to overcome the organizational goals. Thus the main goal of this paper is to discuss on the role of management decisions towards increasing shareholder’s wealth and meet organizational goals.

Keywords: {'name': 'Management Decisions'}, {'name': 'Shareholder’s wealth maximization'}, {'name': 'capital asset pricing model'}, {'name': 'modern financial theory'}

Authors & affiliations

Shrikant Krupasindhu Panigrahi
Affiliation not supplied

Yuserrie Bin Zainuddin
Affiliation not supplied

Noor Azlinna Binti Azizan
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

DOI: 10.1016/S1042-444X(02)00038-5

Appannan, S. and L. W. Sim (2011). A Study on Leading Determinants of Dividend Policy in Malaysia Listed Companies for Food Industry Under Consumer Product Sector. 2 nd International Conference on Business and Economic Research.

DOI: 10.5937/jemc1202081B

Bhattacharyya, A. and B. Phani (2004). "Economic Value Added-A General Perspective." Available at SSRN 545444.

DOI: 10.1111/j.1540-6296.2000.tb00013.x

DOI: 10.2139/ssrn.1656346

DOI: 10.1108/10222529200500009

Dilon, R. and J. Owers (1997). EVA as a financial metric: attributes, utilization …Financial Practice & Education 7(1): 32-40.

DOI: 10.1111/1467-8551.00240

Gupta, S. (2012). Performance Measurement: A Comparative Study of EVA and Traditional Performance Measurement Techniques: A Case Study of Steel and Petrochemicals Industry in India, GRIN Verlag.

Issa, A. I. (2012). The Determinants of Dividend Policy: Evidence from Malaysian Firms, Universiti Utara Malaysia.

Kapoor, S. (2011). Impact of dividend policy on shareholders' value: a study of Indian firms.

DOI: 10.1007/978-0-387-78183-9_2

Mäkeläinen, E. and N. Roztocki (1998). Economic Value Added (EVA) for small business. Retrieved March 22: 2007.

Michalski, G. (2013). Portfolio management approach in trade credit decision making. arXiv preprint arXiv:1301.3823.

DOI: 10.1504/IJBPM.2000.000075

OHARA, K. (2011). "Importance Of Economic Value Added (EVA) In Japan." http://r-cube.ritsumei.ac.jp/handle/10367/2625

Pandey, I. M. (2003). Corporate dividend policy and behaviour: the Malaysian evidence. Asian Academy of Management Journal 8(1): 17-32.

PRATIWI, P. W. (2008). The Relationship Between Economic Value Added (EVA) and Market Value Added (MVA) with Reported Earnings: An Empirical Research of 40 Listed Companies in Indonesia Stock Exchange for The Year 2004-2007, BINUS.

Rana, A. S. (2011). Shareholder Value Creation in the Automobile Industry in India, Saurashtra University.

Rappaport, A. (1999). Creating shareholder value: a guide for managers and investors, Free press.

Ray, K. G. (2010). Mergers and Acquisitions, PHI Learning Pvt. Ltd.

DOI: 10.1080/1540496X.2005.11052626

DOI: 10.5539/ijef.v2n2p200

Sigler, K. J. (2011). CEO Compensation and Company Performance. Business and Economic Journal 2011: 1-8.

Stern, J. (1993). Value and people management.Corporate Finance 104: 35-37.

Stewart, G. B. (1991). The quest for value, HarperCollins.

Taufil, H., H. Isnurhadi and M. Widiyanti (2008). The influence of traditional accounting and Economic Value Added approaches on stock returns of banks listed on Jakarta Stock Exchange (JSX). 10th MFA Annual Conference on Strengthening Malaysia's Position as a Vibrant, Innovative and Competitive Financial Hub.

DOI: 10.1109/ICLSIM.2010.5461411

DOI: 10.1108/09600039910273966

DOI: 10.1109/ICIE.2010.90