2025 Volume 49 Issue 1-2 Pages 29-41
This study investigates the influence of performance metrics established by executives on capital expenditure decisions made by division managers. When EBITDA, a measure of profit before depreciation and amortization, is used as a performance indicator in medium-term Strategic plans, depreciation costs are excluded from managers’ responsibilities. The analysis shows that under these conditions, managers are more likely to increase capital expenditure. This highlights the significant role of performance metrics in shaping managerial behavior and underscores their importance as a tool for guiding organizational actions and achieving strategic goals.
