DISTINGUISHING CAPACITIES AND FINANCIAL STRATEGIES OF ENTERPRISE MANAGEMENT FOR VALUE CREATION AND DESTRUCTION

Abstract

Due to competitiveness, fast-changing businesses and the globalization of markets demand that enterprise managers adopt increasingly efficient attitudes and techniques, allowing for the management to concentrate in increasing the owners’ wealth by eliminating the distortions that result from using historic data of traditional accounting records. A company’s success is measured by its capacity to generate wealth for its owners in a given time and not merely by a quick view of accounting results. The goal of this paper is to analyze the basic determinants of value creative enterprise management. These determinants were conceptualized using the distinguishing capacities and financial strategies variables. The sample was composed of 235 companies from the various sectors of Brazilian economy. The data were analyzed with multivariate analysis, checking for the existence of significant differences among the companies studied. It was verified that “operational” financial strategies and distinguishing capacities of “business relations” were more intensely used by value creative companies.  Value destructive companies made more intense use of “operational” financial strategies and distinguishing capacities of “business relations”. The distinguishing difference between value creative and value destructive companies was established by the real evolution stability, that is, by the operational returns stability.