The Era of Emphasis on Corporate Economic Value and Management Efficiency.

Abstract

The Japanese businesses used to set management goals on attaining a certain rate of increase in sales or increasing the share in the domestic industry, but they have finally begun to place emphasis on return on equity (ROE), which is an indicator of how efficiently shareholders’ equity is being used. Calls for more rigorous corporate governance from domestic and foreign institutional investors are behind this shift. The new trend is expected to accelerate innovations in the Japanese companies’ management system as well as in management control measures. In fact, high-growth companies have been adopting economic value added (EVA) or market value added (MVA) as their management benchmarks in increasing numbers.