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    Planning in Order To Achieve Superior Performance

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    Lama Al Hout
    Planning is important for companies to achieve superior performance over competitors and maximize shareholder value. When companies perform well, profits and shareholder value increase. Shareholders want to see both high, sustainable profit growth over time. Managers face challenges maintaining both short-term profitability and long-term profit growth through strategies like balancing expenses for research and development.

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    Planning in Order To Achieve Superior Performance

    Uploaded by

    Lama Al Hout
    15 views1 page
    Planning is important for companies to achieve superior performance over competitors and maximize shareholder value. When companies perform well, profits and shareholder value increase. Shareholders want to see both high, sustainable profit growth over time. Managers face challenges maintaining both short-term profitability and long-term profit growth through strategies like balancing expenses for research and development.

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    Planning is important for companies to achieve superior performance over competitors and maximize shareholder value. When companies perform well, profits and shareholder value increase. Shareholders want to see both high, sustainable profit growth over time. Managers face challenges maintaining both short-term profitability and long-term profit growth through strategies like balancing expenses for research and development.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    15 views1 page

    Planning in Order To Achieve Superior Performance

    Uploaded by

    Lama Al Hout
    Planning is important for companies to achieve superior performance over competitors and maximize shareholder value. When companies perform well, profits and shareholder value increase. Shareholders want to see both high, sustainable profit growth over time. Managers face challenges maintaining both short-term profitability and long-term profit growth through strategies like balancing expenses for research and development.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Planning in Order to Achieve Superior Performance

    For most companies, if not all, the ultimate objective is to achieve


    superior performance in comparison with the performance of their
    competitors. When superior performance is achieved, company
    profitability will increase. When profits are growing, shareholder value
    will grow. A publicly-owned for-profit company must have maximizing
    shareholder value as its ultimate goal. The shareholders are the
    owners. They have provided risk capital with the expectation that the
    managers will pursue strategies that will give them a good return on
    their investment. Thus, managers have an obligation to invest
    company profits in such a way as to maximize shareholder value.

    Shareholders want to see profitable growth: high profitability and


    also sustainable profit growth. A com- pany with profits but whose
    profits are not growing will be not be valued as highly by shareholders
    as a company with profitability and profit growth. Attaining and
    maintaining both short-term profitability and long-term profit growth is
    one of the greatest challenges facing managers.

    Example: If a company decreases its Research and Development


    expenses, its short-term profit will increase as a result of reduced
    expenses. However, its ability to generate profits in the future may be
    reduced because it will not have the products it needs to sell.

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