FORMING OF THE MECHANISM OF THE ENTERPRISE’S MARKET CAPITALIZATION FOR ACHIEVEMENT OF ITS MAIN GOALS OF INVESTMENT ACTIVITY

Abstract

The article summarizes arguments and counterarguments in the framework of scientific discussion on the formation of a mechanism for managing the market capitalization of an enterprise from the point of view of achieving its established investment goals. The main goal of the research is to create a new approach to the formation of the mentioned mechanism, which was implemented through a critical analysis of the modern scientific publications within the topic. A detailed analysis of the internal structure of the enterprise’s market capitalization management mechanism allowed to define its main components list which includes: a main goal of the mechanism (which is related to enterprise’s value maximization), management methods (financial, administrative, legal), principles (purposefulness, planning, competence, disciplines, incentives, hierarchy), tools (business valuation, financial analysis, benchmarking), subjects, objects, management factors (improving of financial, administrative or production system) and result (which is measured by enterprise’s market capitalization dynamics). Also, it was revealed that there’s a connection between internal components of enterprise’s market capitalization management mechanism and external factors, which can be microeconomic (are under direct enterprise’s influence) or macroeconomic (can’t be influenced from an enterprise’s side). Having summarized the main goals of an enterprise’s investment strategy, three main groups of the goals were selected to reveal the existence of a direct relationship between formation of a mechanism for managing the market capitalization of an enterprise and its main goals of investment activity. First one is related to improvement of enterprise’s value (based on changes in capital), second is related to level of enterprise’s profitability, and third is defined with achieving a positive social effect. The study empirically confirms and theoretically proves that the expression of the effectiveness of the market capitalization management mechanism of an enterprise is a direct identification of the achievement of the goals of its investment strategy.