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Abstract

Groupe Schneider is a world leader in electrical distribution, industrial engineering equipment, and industrial control and automation. In order 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. 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 a divisional performance measure. A technical note 'Management Compensation and Economic Value Added' (298-027-6) is available as a supplement to the case.

Teaching and learning

This item is suitable for postgraduate and executive education courses.

Time period

The events covered by this case took place in 1997.

Geographical setting

Region:
World/global
Country:
France

Featured company

Groupe Schneider
Employees:
10000+
Industry:
Electrical distribution, industrial engineering, control and automation

Featured protagonist

  • Jean-Claude Perrin (male), CFO

About

Abstract

Groupe Schneider is a world leader in electrical distribution, industrial engineering equipment, and industrial control and automation. In order 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. 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 a divisional performance measure. A technical note 'Management Compensation and Economic Value Added' (298-027-6) is available as a supplement to the case.

Teaching and learning

This item is suitable for postgraduate and executive education courses.

Settings

Time period

The events covered by this case took place in 1997.

Geographical setting

Region:
World/global
Country:
France

Featured company

Groupe Schneider
Employees:
10000+
Industry:
Electrical distribution, industrial engineering, control and automation

Featured protagonist

  • Jean-Claude Perrin (male), CFO

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