Value-based management in the age of digitization

Abstract

The digital economy has a growing role in the processes of socio-economic development. To support this trend and the growing contribution of the digital economy to the growth of private and public welfare, it is necessary to improve corporate governance methods and practices. Among modern business management methods, an important place belongs to value-based management. However, in the case of companies in the digital economy, the application of this management model is difficult. There are two types of digital business value-based management issues. They are due to the imperfection of the measurement methodology, as well as to the inaccessibility and incompatibility of information. The purpose of this paper is to formulate approaches to value-based management of digital economy companies. We analyze the key problems that arise in the process of managing a digital business, consider various methods for measuring the value of digital companies, and suggest ways to improve their value-based management. The scientific basis of our work is empirical and theoretical research methods. This paper uses the results of similar topics and the authors’ own developments. Analysis and generalization of this material made it possible to synthesize new approaches to solving the problem of digital business management. We conclude that value-based management changes significantly at the digitalization stage. The role of the determinants of value goes to factors that have an intangible form. Therefore, the key source of value creation, wealth growth is the ability of companies to use the capabilities of digital technology, while not forgetting the sustainability of the business. We think that the best solution to this problem is to create a management system that, on the one hand, covers the main operational, financial and social aspects of the company, and on the other, takes into account the features of digital business. A system that is designed to meet these requirements will provide managers with an effective tool for managing the company, which will ensure its sustainable development.

Keywords

• digitalization
• digital economy
• value
• management methods
• value assessment models