Purpose – The main aim of our study is to analyse some aspects of the VAIC (Value Added Intellectual Coefficient) (Pulic, 1998; 2000; 2008) starting from the re-interpretation provided by Iazzolino and Laise (2012).For achieving the goal, VAIC is compared with one of the other performance evaluation methods: the Economic Value Added (EVA). According to Pulic (2008) there is no correlation among VAIC and the traditional methods. This means that the VAIC is a method different from the more traditional ones. His research proved that EBIT does not take into account company’s capabilities in value creation; thus, firm’s managers make myopic decisions considering only EBIT. Similar considerations could be done about VAIC and EVA; as a matter of fact EVA is strictly linked to capital employed and financial flows, but is not able to assess the intellectual capital performance (Pulic, 2000). EVA has a different meaning than the VAIC: VAIC is an indicator of Intellectual Capital Efficiency, whereas EVA measures the value creation from the shareholder point of view and doesn’t contain explicit references to Intellectual Capital and to the stakeholder point of view; hence there are no conceptual linkage among these concepts. Therefore, these two concepts are useful in a context in which the performance is measured through multi-criteria methodologies, such as the Balanced Scorecard (Kaplan and Norton, 1992), Skandia Navigator (Edvinsson and Malone, 1997) or Intangible Asset Monitor (Sveiby, 1997). Design/methodology/approach – In our paper we propose a comparison between VAIC and EVA, starting from the idea of Pulic (2008) and in order to highlight that they are not correlated each other (there is no linear correlation). Thus, we have conducted a correlation analysis on a firms sample belonging to different industries. As a matter of fact EVA and VAIC are two important components for the firm’s growth, but their meanings are completely different (Mouritsen, 1998). In effect, EVA is based on the financial theory, whereas VAIC is focalized on the assessment of intellectual capital efficiency (ICE). Although methods as EVA have improved the modern accounting systems, they do not take into account information linked to intellectual capital efficiency (Pulic, 2008).Originality/value – In order to evaluate firms’ performances it could be useful to interpret both VAIC and EVA concepts. As a matter of fact, if these two aspects are not correctly interpreted, a wrong evaluation could be done. Thus, our proposal describes the differences between VAIC and EVA considering these two concepts as not rival. In fact, for better measuring firms’ performances, it could be useful to considerate VAIC and EVA as an integrated vision in order to develop multi-criteria evaluation systems rather than consider them separately. Practical implications – Managers could be misled due to the fact that they often make decisions by taking into account only financial indicators as EBIT, EVA, etc. (Pulic, 2008). Conceptually, there is no correlation between EVA and VAIC; therefore, managers that base their choices only on EVA could make mistakes. We examine the relations among VAIC and EVA demonstrating that a better evaluation could be conducted in an integrated way through a multi-criteria analysis.
Measures of Value Creation: a comparison between VAIC and EVA
IAZZOLINO, Gianpaolo;Laise D;Migliano G.
2013-01-01
Abstract
Purpose – The main aim of our study is to analyse some aspects of the VAIC (Value Added Intellectual Coefficient) (Pulic, 1998; 2000; 2008) starting from the re-interpretation provided by Iazzolino and Laise (2012).For achieving the goal, VAIC is compared with one of the other performance evaluation methods: the Economic Value Added (EVA). According to Pulic (2008) there is no correlation among VAIC and the traditional methods. This means that the VAIC is a method different from the more traditional ones. His research proved that EBIT does not take into account company’s capabilities in value creation; thus, firm’s managers make myopic decisions considering only EBIT. Similar considerations could be done about VAIC and EVA; as a matter of fact EVA is strictly linked to capital employed and financial flows, but is not able to assess the intellectual capital performance (Pulic, 2000). EVA has a different meaning than the VAIC: VAIC is an indicator of Intellectual Capital Efficiency, whereas EVA measures the value creation from the shareholder point of view and doesn’t contain explicit references to Intellectual Capital and to the stakeholder point of view; hence there are no conceptual linkage among these concepts. Therefore, these two concepts are useful in a context in which the performance is measured through multi-criteria methodologies, such as the Balanced Scorecard (Kaplan and Norton, 1992), Skandia Navigator (Edvinsson and Malone, 1997) or Intangible Asset Monitor (Sveiby, 1997). Design/methodology/approach – In our paper we propose a comparison between VAIC and EVA, starting from the idea of Pulic (2008) and in order to highlight that they are not correlated each other (there is no linear correlation). Thus, we have conducted a correlation analysis on a firms sample belonging to different industries. As a matter of fact EVA and VAIC are two important components for the firm’s growth, but their meanings are completely different (Mouritsen, 1998). In effect, EVA is based on the financial theory, whereas VAIC is focalized on the assessment of intellectual capital efficiency (ICE). Although methods as EVA have improved the modern accounting systems, they do not take into account information linked to intellectual capital efficiency (Pulic, 2008).Originality/value – In order to evaluate firms’ performances it could be useful to interpret both VAIC and EVA concepts. As a matter of fact, if these two aspects are not correctly interpreted, a wrong evaluation could be done. Thus, our proposal describes the differences between VAIC and EVA considering these two concepts as not rival. In fact, for better measuring firms’ performances, it could be useful to considerate VAIC and EVA as an integrated vision in order to develop multi-criteria evaluation systems rather than consider them separately. Practical implications – Managers could be misled due to the fact that they often make decisions by taking into account only financial indicators as EBIT, EVA, etc. (Pulic, 2008). Conceptually, there is no correlation between EVA and VAIC; therefore, managers that base their choices only on EVA could make mistakes. We examine the relations among VAIC and EVA demonstrating that a better evaluation could be conducted in an integrated way through a multi-criteria analysis.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
