Bringing Strategy Back into Financial Systems of Performance Measurement: Integrating EVA and PBC

Abstract

This paper proposes a performance and cost measurement system that integrates the Economic Value Added criteria (EVA) with Process Based Costing (PBC). The EVA-PBC methodology allows us to implement the EVA management logic non only at the firm level, but also at lower levels of the organization. We discuss the role of EVA-PBC methodology in bringing strategy back into financial performance measures.

Keywords: EVA, Processes, Capital Costs, Corporate Strategy, Business Strategy

JEL Classification: M1