Electronics: a case study of economic value added in target costing

Margaret Woods, Linda Taylor, Gloria C.G. Fang

Research output: Contribution to journalArticlepeer-review


Whilst target costing and strategic management accounting (SMA) continue to be of considerable interest to academic accountants, both suffer from a relative dearth of empirically based research. Simultaneously, the subject of economic value added (EVA) has also been the subject of little research at the level of the individual firm.The aim of this paper is to contribute to both the management accounting and value based management literatures by analysing how one major European based MNC introduced EVA into its target costing system. The case raises important questions about both the feasibility of cascading EVA down to product level and the compatibility of customer facing versus shareholder focused systems of performance management. We provide preliminary evidence that target costing can be used to align both of these perspectives, and when combined with other SMA techniques it can serve as " the bridge connecting strategy formulation with strategy execution and profit generation" ( Ansari et al., 2007, p. 512).
Original languageEnglish
Pages (from-to)261-277
Number of pages17
JournalManagement Accounting Research
Issue number4
Early online date1 Oct 2012
Publication statusPublished - Dec 2012


  • target costing
  • strategic management accounting
  • economic value added
  • performance management
  • EVA
  • case study


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