Profit oriented organizations are teleonomic systems that can continue to exist only as long as their performance as systems for the production of value is appreciated by shareholders. In this organizations the internal cognition - data gathering processes, strategies, decisions, planning and controls – are carried out by the management, which produces rational calculations for decision-making, strategies, programmes and controls from which the organization’s actions derive. So the management needs suitable models for economic calculations, in order to control revenues capacity to remunerate all productive factors, equity included. We start from two remarks. First: measuring the EVA permits a valuation of the impact of the resource allocation choices, since it provides a progressive estimate of the value created by management for the shareholders, however, it can become an effective instrument of support for managerial decisions only if it is systematically applied to the operational levels of the organization as well. Second: activity based costing informations fit long term decisions but in the calculation of the full cost of product the ABC methodology does not call for the calculation of the effective or implicit costs and charges connected with capital. So we show how the logic of Economic Value Added and Activity Based Costing must be linked in order to strengthen the cognitive activity of organizations in order to make the production of value maximally efficient, combining the determination of ABC cost with the direct and indirect charges regarding the invested capital and applying EVA logic at the operational levels.
|Keywords:||Activity Based Costing, Economic Value Added, Product Cost, Cost of Capital|
Researcher, Department of "Ricerche aziendali Riccardo Argenziano", University of Pavia, Pavia, Italy
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