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Groupe Schneider: Economic Value Added and The Measurement of Financial Performance

By S. David Young
Published 01 Oct 1998
Reference 4721
Topic Economics & Finance
Industry Electrical/Electronic Manufacturing
Region Global
Length 24 page(s)
Inspection copy
Teaching note
6.00
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Prizes & Awards

2005 Best-selling Case in Finance

2004 Best-selling Case in Finance

2003 Best-selling Case in Finance

2002 ecch Best-selling Case in Finance

Winner of ecch 2000 European Case Awards, Finance Category

Summary

Groupe Schneider is a world leader in electrical distribution, industrial engineering equipment, and industrial control and automation. To promote a stronger value creating culture, Schneider implemented a performance measurement system based on Economic Value Added. The case explores the difficulties of implementing value-based metrics in large multinational companies, and the use of Economic Value Added in management compensation.

Teaching objectives

This case is a vehicle exploring Economic Value Added. The issues raised include the importance of value creation, the cost of capital, calculating Economic Value Added, management compensation, and other issues related to implementing Economic Value Added as divisional performance measure.

Keywords
  • RD0498
  • EVA
About the author
Young

S. David Young

Professor of Accounting and Control

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