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Strategic Risk Management

Corporate treasurers and chief financial officers have become adept at quantifying and managing a wide variety of risks: financial, hazard, and operational. To defend themselves, they use tried-and-true tools such as hedging, insurance, and backup systems. Some companies have even adopted the concept of Enterprise Risk Management, integrating available risk management techniques in a comprehensive, [...]

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Value Creation Index

The Value Creation Index (VCI) is a tool that was designed to quantify the link between an organization’s non-financial performance and its valuation in the markets. Traditional methods of assessing organizational performance are no longer adequate in today’s economy. The price of a stock is less and less determined by earnings or its asset base. [...]

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Chinese Wall

A Chinese Wall is an ethical barrier between different divisions of a company to avoid conflict of interest.  This is typically existing in financial institutions and professional service firms. For instance, in an investment bank, there is a Chinese Wall between the advisory area and the brokering department of a financial services firm to separate [...]

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GE-McKinsey Matrix

The GE-McKinsey Matrix is a business framework to perform a business portfolio analysis on the Strategic Business Units of a corporation. It is also commonly referred to as GE Matrix, McKinsey Matrix, GE Multi-factoral Analysis, Business Assessment Array, and GE Business Screen. It was developed jointly by McKinsey and General Electric in the early 1970s as [...]

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Stakeholder Value Perspective

Stakeholder Value Perspective is a management concept that regards maximization of the interests of its all stakeholders (customers, employees, shareholders, and the community) as its highest objective. Its objective is to maximize this value by following policies that (1) minimize cost and waste while improving the quality of its products, (2) enhance the skills and [...]

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Strategy Map

A Strategy Map is a diagram that is used to document the primary strategic goals being pursued by an organization or management team. It is an element of the documentation associated with the Balanced Scorecard, and in particular is characteristic of the second generation of Balanced Scorecard designs that first appeared during the mid-1990s. The [...]

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Plausibility Theory

Something is plausible if it is conceptually supported by prior knowledge. The Plausibility Theory of Wolfgang Spohn (1985-), Collins & Michalski (reasoning, 1989), Lemaire & Fayol (arithmetic problem solving, 1995), Connell & Keane (cognitive model of plausibility, 2002) provides new insights into decision-making with risks that can’t be known. Plausibility is an ineluctable phenomenon of [...]

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RAROC

Risk-Adjusted Return on Capital (RAROC) is a risk-based profitability measurement framework for analyzing risk-adjusted financial performance and providing a consistent view of profitability across businesses. The concept was developed by Bankers Trust and principal designer Dan Borge in the late 1970s. Note, however, that more and more return on risk adjusted capital (RORAC) is used [...]

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Brand Personality Dimensions

The Brand Personality Dimensions (also called Brand Personality) is a marketing framework to describe and measure the “personality” of a brand in five core dimensions, each divided into a set of facets.  It is a model to describe the profile of a brand by using an analogy with a human being. The Brand Personality Dimensions [...]

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Value Mapping

The Value Mapping method by Andrew Jack is a second generation Performance Management model, trying to avoid some of the weaknesses of existing frameworks. Performance Management As a result of the performance measurement revolution many organizations have numerous measures of performance. However often with significant weaknesses in the way that these measures are identified, integrated, [...]

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