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- A practical guide to SEC ï¬nancial reporting and disclosures for successful regulatory crowdfunding
- Quality shareholders versus transient investors: The alarming case of product recalls
- The Health Equity Accelerator at Boston Medical Center
- Monosha Biotech: Growth Challenges of a Social Enterprise Brand
- Assessing the Value of Unifying and De-duplicating Customer Data, Spreadsheet Supplement
- Building an AI First Snack Company: A Hands-on Generative AI Exercise, Data Supplement
- Building an AI First Snack Company: A Hands-on Generative AI Exercise
- Board Director Dilemmas: The Tradeoffs of Board Selection
- Barbie: Reviving a Cultural Icon at Mattel (Abridged)
- Happiness Capital: A Hundred-Year-Old Family Business's Quest to Create Happiness
How Do You Win the Capital Allocation Game?
內容大綱
This is an MIT Sloan Management Review article. Why do companies frequently make bad investment decisions and continue to blunder, even after the weaknesses in their capital budgeting analyses are evident? Because, according to the authors, they don't integrate capital budgeting into their overall strategy. The authors' capital budgeting framework has six key features: it is dynamic, it is integral to the firm's strategy, it recognizes sequences of options, it is cross-functional, it aligns employee compensation with capital allocation, and it emphasizes performance-based training. The three steps of this framework should take place simultaneously: First, identify a status quo strategy and how it must perform to maximize shareholder value. The strategy helps the company determine the trade-off in capital budgeting between cycle time and risk. Second, establish a system for evaluating projects and preparing capital allocation requests that is consistent with the strategy. Finally, develop a culture consistent with the strategy and the evaluation system.