How is Shareholder Wealth Maximised?
- Maximising shareholder wealth is done through increasing profits which can be achieved through:
- § Increasing profitability, through cost reduction and efficiency programs
- § Investing in profitable projects or investments
- § Expanding through new products and new markets
- § Acquiring or merging with other organisations
- The objectives of the organisation must incorporate all stakeholders and the organisation has to "balance" the needs of all interested parties.
- Once the objectives have been identified, the organisation must then plan to achieve those
- objectives. This will involve at looking at various options available, analysing those options,
- choosing the appropriate one by ensuring there are enough funds and resources available to
- implement the option or options.
- Once implementation commences, it is important to monitor and control the chosen option to ensure it is consistent with objectives. This is mainly done through performance measures.
