A CASE STUDY IN ECONOMIC VALUE ADDED: MEASURING AND REWARDING PERFORMANCE IN A DIVISIONALIZED COMPANY

Using different metrics in order to evaluate the performance of a company, is considered a rather complex procedure but of crucial importance for any economic organization. It might reveal unidentified problems whose settlement would improve the general position of the firm and make it boost in the future. Economic Value Added (EVA) is an alternative to the traditional accounting profits that has fanatic advocators as well as opponents. The real value created for the firm has a great significance for shareholders, since they often feel unprotected against the bad decisions and choices made by the managers. A system like EVA, which motivates managers to think and act like shareholders and rewards accordingly is presented by the advocators of EVA, as the key to answer such a question. This study examines this problem based on a case study approach.