Value movement, the new management challenge

• Jean-Pierre GABEN
  Vice president, Mercer Management Consulting
  

Summary

The Mercer group has studied the factors which influence company growth while taking into account the limits of restructuring. Mercer discovered that in every industrial sector there are companies which are growing at more than ten percent per annum over a long period of time, even in sectors which appear to be in decline. This can be explained by a significant movement of share prices between different companies. Successful companies know how to "re-invent" themselves every five to seven years in order to pick up the maximum value produced within the sector. Jean-Pierre Gabin explains that this re-invention raises questions regarding the principles of the 1980s. It is necessary to be client-based rather than product-based, and to focus on the value of a share rather than market share, on re-invention of the structure of the organisation rather than relying on basic skills, and to focus on strategic control rather than employment of the work force. A debate followed, based on the advantages of the method of value movement, and how and under what conditions it should be applied, in particular with regard to the resulting relationship with shareholders.

Summary translated from French by Rachel MARLIN.

• The entire article was written by Michel BERRY.

To obtain this article, you can :

• download it for free in French (PDF help) or contact ecopar@paris.ensmp.fr (Reference CF201098).

The entire article appears in French in the Journal de l'École de Paris du management N° 16.