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What is Economic Value Management?
Economic Value Management is a governance approach that is based on stewardship, and that yields economic, value creating results.
"Economic Value Management is an integrated approach to managing any organization, one that is based on the principle of stewardship (and the inexorable consequences of failed stewardship)."
All three words, economic, value and management speak to the concept of stewardship and to its consequences. (Definitions come from Webster’s Collegiate and the Oxford English Dictionary.)
Stewardship is defined as the “conducting, supervising or managing of something, especially the careful and responsible management of something entrusted to one’s care." "The responsible use of resources, especially money, time, and talents.”
Economic implies not accounting or record keeping, but rather means a process “marked by careful, prudent use of resources”, “yielding advantageous returns or results”.
Value is defined as something “held in high esteem or appreciation”, “having worth”, something that is “valid, sound”. It is a “measurement of relative worth”, “the estimate in which something is held related to principles or standards of what is valuable in life”, and “the quality of a thing considered in respect of its power and validity for a specified purpose or effect”.
Management is defined as “judicious use of means to accomplish an end”, “the application of skill or care in the conduct of an enterprise”, “the exercise of executive, administrative and supervisory direction”, and “the taking of control of the course of affairs by one’s direction.” It is “the fulfillment of duties,” “handled or directed with a degree of skill”, “treated with care”, “carried on successfully” “to achieve one’s purpose”.
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