Valuation of entrepreneurial organisations global view: a review of the factors involved in business valuation for strategic purposes

This paper notes past and present approaches to the valuation of an organisation. and assesses their adequacy and applicability for strategic organizational decisions, which may include purchase and/or disposal of the operational entity. It introduces a ji-amework based on frve categories of assets, including a People category to encompass the complex and diverse people-based factors that should be involved in valuation of the business. It proposes a more practical and comprehensive approach to business valuation than the currently acceptable (but rather simplistic) accounting-based version. The concept of Synergistic Capital (SC), a term coined by the author, is introduced Its proposed relationship to the term Imaginative Capital (!C), a term starting to appear in the academic literature, is examined. The need for global consistency in business valuation is addressed. along with the need for further discussion and research on a worldwide scale to match the perceived global implications.