The Discussion Of The Application Framework Of VBM With The Introduction Of ABC

With the profound transformation of the global economy, the living environment of the enterprise has faced a significantly modification, hence managers pay more attention to the long-term objectives and total value added. Value-based Management (referred to VBM) is derived from this context. VBM is not only a management concept, but also a technique, and further more a management system. As all other management theory and methods, VBM cannot be successful implemented in the organization without a favorable micro-foundation. But the general VBM theory, solely on the basis of the evaluation indicators of the economic value of the company or further broken it down into some lag financial index as gross margin, profitability, cost rate and so on, still not free from the shackles of the traditional accounting concept, cannot explore the real drivers of value creation motivations and establish the information systems that support the business process and the effective implementation, and thus lose the micro-environment foundation for the successful execution of the VBM required. Activity-based Costing (ABC) as a cutting-edge theory of cost management, it is not only able to provide accurate cost information, and also provide enterprises with activity based costing of business unit, value, motivation, performance of complete information the VBM required. So the essence of ABC-value analysis becomes the most powerful analysis tools of confirming value drivers and value creation, causes the enterprise put the value analysis of the whole "activity chain-value chain" into the depth of activity level, prompts the company to make better decisions, and then achieves the maximization of enterprise value.At present scholars’research only focuses on Value-based Management or Activity-based Costing, but they seldom combine them to construct an operational application framework of VBM. Therefore this paper adopts the method of combining normative research and case studies. It will introduce Activity-based Costing into the framework of VBM, from the analysis of activity value drivers, to construct a practical application framework of VBM based on ABC, and make the current framework of VBM to be more practical combining case analysis. This thesis starts from the interpretation of the basic theory and the limitations of VBM, with the introduction of Activity-based Costing, aim to build a value management theory analytical framework based on the information systems of Activity-based Costing, in order to provide direction, improvement, or even reformation to corporate management practices, improve corporate risk aversion capacity and competitiveness, consequently achieve the ultimate running goal to maximize the value of the company. This thesis consists of five parts. The first part introduces VBM and costing theory, including the connotation and basic framework of VBM, as well as the theoretical basis and the basic content of Activity-based Costing; second section explains the basic framework and its limitations of VBM. It points out that the traditional framework of VBM neither reflect the cost information of diversified business, nor reflect the characteristics of complete value chain management, and also not explore the real power of driving value creation; the third part introduce Activity-based Costing follow, then gives improvements to the VBM basic framework through the analysis of the necessity and feasibility of the activity based costing; the forth part provides the detailed description of how to build the VBM framework with the introduction of Activity-based Costing, first elaborates the general idea, then introduces the analysis of the value drivers based on activity through the value analysis of resources drivers, the value analysis of activity drivers and the comprehensive analysis of activity, and then introduces the activity-based value budget and performance evaluation, which put the balanced scorecard, EVA and Activity-based Cost into a whole; the last chapter elaborates how to practice the VBM framework with the introduction of activity based costing in actual cases, so as to get a conclusion that the activity based costing and VBM are complementary, their integration can better help enterprises achieve value-maximizing.