ABSTRACT
One innovation with a long-standing pedigree in conventional management accounting thought, but also assuming wider societal relevance is Economic Value Added (EVATM). Tracing its origins to traditional notions of residual income, the concept of EVATM was devised and popularised by the US-based consulting firm Stern Stewart and subsequently heralded as a key innovation contributing to the contemporary reshaping of corporate control (see Bromwich and Walker 1998, Ittner and Larcker 1998, O’Hanlon and Peasnell 1998). As such, it evolved into a centrepiece of the broader shareholder value movement emerging since the 1980s (Froud et al. 2000a, Malmi and Ika¨heimo 2003) and exercising a notable influence on management accounting and control practices in individual organisations (Ezzamel and Burns 2005, Ezzamel et al. 2008, Gleadle and Cornelius 2008, Kraus and Stro¨msten 2012). The shareholder value movement represents a social movement held together by the imperative of maximising shareholder wealth as an over-riding premise for the structuring of governance and control practices and has allegedly been furthered by the globalisation of modern capital markets and dissemination of economics-based conceptions of the firm (Davis and Thompson 1994, Fiss and Zajac 2004, Zajac and Westphal 2004). The relevance of EVATM is here seen as primarily residing in the alignment of managerial interests and incentives with the preferences of dispersed shareholders who would otherwise be relatively powerless vis-a-vis management of large corporations (Bouwens and Spekle 2007). However, this disregards that notions of relevance are fragile, socially constructed outcomes that may vary considerably depending on whose interests are being buttressed by EVATM and similar value-based management techniques. Support for this view can be summoned from the observation that such techniques may indeed serve wider interests as vehicles of political governance and regulation in contexts where capital markets pressures and notions of shareholder value have historically been less salient (Francis and Minchington 2002, Siti-Nabiha and Scapens 2005).
