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A case study of financialization and EVA®

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  • Gleadle, Pauline
  • Cornelius, Nelarine

Abstract

This study contributes to the literature on shareholder value and financialization, which to date has produced few case studies at the individual firm level. We provide a grounded account of management control under financialization, focusing on the apparently dramatic turnaround in performance of one factory, located in the northeast of England (Midco). However, in contrast to some of the more prescriptive accounts of shareholder value implementation, we resist overly simplistic explanations that the turnaround was ‘due to’ EVA. Instead, we suggest that both the factory's prior experience of change, particularly TQM, plus the presence of economic insecurity facilitated the turnaround. We compare our findings with other relevant studies and suggest that EVA and financialized solutions do not constitute a panacea for struggling organizations. Specifically, a strategy prioritizing new product development may be incompatible with the type of practices introduced by Midco.

Suggested Citation

  • Gleadle, Pauline & Cornelius, Nelarine, 2008. "A case study of financialization and EVA®," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 19(8), pages 1219-1238.
    • Handle: RePEc:eee:crpeac:v:19:y:2008:i:8:p:1219-1238
    DOI: 10.1016/j.cpa.2007.03.006
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    1. Ezzamel, Mahmoud & Willmott, Hugh & Worthington, Frank, 2004. "Accounting and management-labour relations: the politics of production in the 'factory with a problem'," Accounting, Organizations and Society, Elsevier, vol. 29(3-4), pages 269-302.
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    4. Stephen Riceman & Steven Cahan & Mohan Lal, 2002. "Do managers perform better under EVA bonus schemes?," European Accounting Review, Taylor & Francis Journals, vol. 11(3), pages 537-572.
    5. Paul Thompson, 2003. "Disconnected Capitalism: Or Why Employers Can't Keep Their Side of the Bargain," Work, Employment & Society, British Sociological Association, vol. 17(2), pages 359-378, June.
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    Cited by:

    1. Jean Cushen & Paul Thompson, 2016. "Financialization and value: why labour and the labour process still matter," Work, Employment & Society, British Sociological Association, vol. 30(2), pages 352-365, April.
    2. Müller, Julian, 2014. "An accounting revolution? The financialisation of standard setting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(7), pages 539-557.
    3. Modell, Sven & Yang, ChunLei, 2018. "Financialisation as a strategic action field: An historically informed field study of governance reforms in Chinese state-owned enterprises," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 54(C), pages 41-59.
    4. Gleadle, Pauline & Haslam, Colin, 2010. "An exploratory study of an early stage R&D-intensive firm under financialization," Accounting forum, Elsevier, vol. 34(1), pages 54-65.
    5. Ikseon Suh & John T. Sweeney & Kristina Linke & Joseph M. Wall, 2020. "Boiling the Frog Slowly: The Immersion of C-Suite Financial Executives into Fraud," Journal of Business Ethics, Springer, vol. 162(3), pages 645-673, March.
    6. Dillard, Jesse & Vinnari, Eija, 2017. "A case study of critique: Critical perspectives on critical accounting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 43(C), pages 88-109.
    7. Froud, Julie & Tischer, Daniel & Williams, Karel, 2017. "It is the business model… Reframing the problems of UK retail banking," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 42(C), pages 1-19.
    8. Giulio Corazza, 2019. "Value Based Management Systems and Firm Performance: An Analysis of the Literature," MIC 2019: Managing Geostrategic Issues; Proceedings of the Joint International Conference, Opatija, Croatia, 29 May–1 June 2019,, University of Primorska Press.
    9. Morales, Jérémy & Sponem, Samuel, 2017. "You too can have a critical perspective! 25 years of Critical Perspectives on Accounting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 43(C), pages 149-166.
    10. Cichorska Joanna & Klimontowicz Monika, 2016. "Financialisation as a Result of the Network Economy’s Development," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 12(2), pages 1-12.
    11. Alvehus, Johan & Spicer, André, 2012. "Financialization as a strategy of workplace control in professional service firms," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 23(7), pages 497-510.

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