Comment on the attached article and advise -
1- What is the point the Author is making?
2- Can we Agree with his point and why or why not?
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Eseentially, we are talking about EVA, or economic value added, from two different perspectives. The first paper talks heavily about the accounting aspects of EVA. It starts with the assertion that current earnings metrics are inadequate, then draws logical steps showing how EVA is a better measure. It's an interesting concept, adding value to the company. The 2nd paper discusses pay-for-performance incentive plans. Generally, in the US, PFP plans are implemented poorly with frontline employees, and are usually seen at the upper levels of an organization. The 2nd paper makes a case that by implementing PFP into all levels ...
The case study is about EVA, or economic value added, and the articles both provide a strong position in regards to EVA. The solution talks about the various points, and provides the tools needed to answer the assignment questions.
Southcorp Case Study
What is your assessment of the takeover of Southcorp by Foster's? What is the strategic logic of this acquisition? Is it likely that Foster's will be a good corporate parent for Southcorp? How will value be added at the corporate level?
Identification of issues
Analysis and assessment
Issues in implementation