Abstract

The case discusses the implementation of economic value added (EVA) financial management system at Godrej Consumer Products Limited (GCPL), a leading FMCG (Fast Moving Consumer Goods) company in India, in 2001. The EVA program consists of three elements: EVA centers (business units), EVA drivers (operational practices that improve EVA results), and an EVA-based incentive program for bonus-eligible managers. The case highlights the motivations, benefits, mechanics, limitations and issues in implementing EVA. Students are required to analyze the effectiveness of the EVA compensation system.

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