Economic Value Added as an Indicator of Business Success and Company’s Management Basis Cover Image

Ekonomska dodana vrijednost kao pokazatelj uspješnosti poslovanje i upravljačka osnova preduzeća
Economic Value Added as an Indicator of Business Success and Company’s Management Basis

Author(s): Kasim Tatić
Subject(s): Economy
Published by: Ekonomski fakultet u Sarajevu
Keywords: Economic Value Added (EVA); capital; business success; management; accounting; costing; shareholders; shares

Summary/Abstract: The paper is primarily aimed at presenting the concept of economic added value and pointing to the contemporary context in which the need for such an approach is only too justified. EAV concept is presented as a good basis for viewing the degree of a business success in terms of creating shareholders’ value as a target function, as well as the basis for creating a stimulating system of rewarding company employees and management. The complex implementation of EAV-based system leads to the gradual change in corporate culture, We attempted to point both to the advantages of EAV and to certain weaknesses and limitations in its calculation and use. The paper also briefly describes the idea that EAV advantages can be used to their best, while its limitations can be relativized using modern management systems and methods based on value and on the approach that proper viewing and creating competitive positions requires the inauguration of a management system that will far more insist on the balanced and broader approach. It particularly emphasizes the positive EAV role in terms of proper treatment of an enterprise’s investment into acquisition and efficient use of knowledge in modern conditions, which are labeled with the phrase “knowledge economics”.

  • Issue Year: 2004
  • Issue No: 24
  • Page Range: 143-157
  • Page Count: 15
  • Language: Bosnian
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