Controversies in EVA implementation: a case study of an Australian financial services organisation

Suresh Cuganesan, Clinton Free, Michael Briers

Research output: Contribution to journalArticlepeer-review


It is now over a decade since Economic Value Added (EVA™) was held out to be a more accurate and comprehensive measure of shareholder value than available alternatives. Despite much positive sentiment, evidence on the benefits of implementing EVA™ remains limited and mixed. Not only is research equivocal on the superiority of EVA™ as a predictor of stock returns vis-á-vis other accounting measures, but studies into the performance consequences of using economic value measures are limited and provide only weak support for its claimed benefits. We respond to calls in the literature to investigate the implementation of EVA™ by examining how a large financial services organisation struggled with the introduction of EVA™ at a customer level. In so doing, the study provides a more extensive understanding of the factors that impact EVA™ implementation and shape its eventual outcome at organisations. Further, evidence is provided that contrast with popular prescriptions in the EVA™ literature as to its design and operation. Finally, in contrast to prior literature that focuses on the use of EVA™ at divisional or organisational levels, the study uncovers the novel use of EVA™ to measure customer value and profitability.
Original languageEnglish
Pages (from-to)1-34
Number of pages34
JournalAccounting, accountability & performance
Issue number2
Publication statusPublished - 2004


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