Value-Event Path Based Policy Management Model

Value based management (VBM) aims to promote value of enterprise. In the management process, value of enterprise is changed dynamically and the value change corresponds to an event which happens to the enterprise, such as success of new product development, fall of share price and so on. In other words, an event indicates a change of enterprise value. In this paper, the concepts of enterprise event, value-event node, and value-event path are proposed and defined formally. A process of VBM can be looked upon as a value-event path. A good management process is a value-event path along which value increases with the event sequence, otherwise value decreases with the event sequence. Furthermore, value-event path based policy management model is also proposed in this paper. In the model, a policy is a management activity which is driven by an enterprise event, and the execution result of the policy is a new event. Finally, two typical examples are given to show that value-event path based policy management model is a novel policy-based tool of VBM planning and decision support.