Are Core Groups and Core Group theory relevant within Value Based Management?
Of course they are. Managing for Value (the second of the three components of VBM) should be seen in another perspective if Kleiner is right. Perhaps the “managing” in corporations often is indeed primarily aimed at satisfying the needs of the Core Group. Also executive compensation and corporate governance regulation become even more important then than they already are. Kleiner suggests that is it is possible to create “Expanded-Core-Group Organizations”. To do this, the following elements are suggested: – employee stock-ownership plans – financial literacy – non-hierarchical decision-making – comprehensive (financial and strategy) training programs This is were Core Group theory is very much like Value Based Management thinking. As far as the Value Creation part of VBM is concerned it is important whether one should aim primarily at maximizing shareholder value or stakeholder value or that in reality the Core Group comes first, principally a form of stakeholder value. Core Group dyn
