Journal of Accounting and Management Information Systems (JAMIS)

Implications of the EVA model use in the firm resources' performant allocation plan

Vol. 9, Nr. 1/2010 ,   p120..145

Dorel MATE┼×
Veronica GROSU
Eugenia IANCU

Keywords:   EVA model, evaluation method, performance, resources, company

Abstract:   The subject of the present paper is the EVA model and its use by the companies, as a management or result measuring instrument. The EVA method can represent a possible answer to these new strategic requirements, being adopted more and more diffuse, as a consequence of the globalization process, even in the sphere of the systems or countries distanced culturally or institutionally from the Anglo-Saxon reality, where its origin is. Moreover, resorting to this entitling of "model" or "method" called EVA resumes to highlighting the importance of this indicator in its consideration as a performance measurement instrument, the usage of the term "model" is due especially to the fact that the EVA represents a multitude of fundamental theories that are at the base of the modern economic finances. Its increasing use inserts perfectly in this finance and strategies integration context, also existing the possibility to represent the mean through which new judgments of  economical reality interpretations are introduced in the companies, thus increasing the communication and fine-tuning capacity towards the financial community, a more and more important element in the attraction dynamic of the products necessary for the growing process of the company. Second of all, EVA can become a reference parameter around which can be constructed a coherent and integrated management system, orientated to producing added value, and that can include economical objectives establishment, activity planning, performance evaluation, management motivation, portfolio activity management, capital budgeting choosing, company culture changing and least of all financial communication.