Case | HBS Case Collection | October 2004

Continuing Transformation of Asahi Glass, The: Implementing EVA

by Mihir A. Desai, Masako Egawa and Yanjun Wang

Abstract

This case explores the use of EVA--economic value added--methodology at Asahi Glass. EVA is among the changes initiated by the CEO aimed at transforming Asahi Glass from a traditional Japanese company to a global firm. Other changes included a corporate reorganization into worldwide business groups, the appointment of non-Japanese managers to key positions, and corporate governance reforms. The EVA methodology was introduced to improve resource allocation across Asahi's numerous businesses around the world and to evaluate the managerial performance of top executives. It examines how the company calculated EVA and, in particular, how it calculated the weighted average cost of capital for its different businesses in different countries. Is Asahi Glass gaining benefits from the EVA methodology, and does it contribute to the transformation of Asahi Glass into a truly international firm?

Keywords: Restructuring; Change Management; Global Strategy; Corporate Governance; Recruitment; Management Analysis, Tools, and Techniques; Performance Evaluation;

Citation:

Desai, Mihir A., Masako Egawa, and Yanjun Wang. "Continuing Transformation of Asahi Glass, The: Implementing EVA." Harvard Business School Case 205-030, October 2004.