Title: The history and trajectory of economic value added from a management fashion perspective

Authors: Dag Øivind Madsen; Daniel Johanson; Tonny Stenheim

Addresses: School of Business, University of South-Eastern Norway, Bredalsveien 11, 3511 Hønefoss, Norway ' Department of Accounting, Auditing and Law, Norwegian School of Economics, Helleveien 30, 5045 Bergen, Norway ' School of Business, University of South-Eastern Norway, Bredalsveien 11, 3511 Hønefoss, Norway

Abstract: This paper examines the history and trajectory of economic value added (EVA), an accounting concept and calculative technique introduced and popularised by the US-based consulting firm Stern Stewart in the early 1990s. The paper applies the lens of management fashion, a theoretical perspective in management and organisation studies focusing on the macro-level evolution of management concepts and ideas as they rise and fall in popularity and salience. The historical popularity trajectory which emerges in the case of EVA is a typical 'rise and fall' story often seen in the cases of popular management concepts and ideas. During the upswing phase of the 1990s, supporters and boosters of EVA hyped the concept and created a fashion wave. Since the mid-2000s, there has been a perfect storm of events, which has led the EVA concept to lose out in the marketplace for management concepts and ideas.

Keywords: economic value added; EVA; management concept; management fashion; historical trajectory; residual income; shareholder value movement.

DOI: 10.1504/IJMCP.2020.108809

International Journal of Management Concepts and Philosophy, 2020 Vol.13 No.1, pp.51 - 79

Received: 15 Oct 2019
Accepted: 02 Nov 2019
Published online: 03 Aug 2020 *

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