1. ES Inc. Case

2. GROUP-WORK In 1982 ESI, a large diversified company with 4 business areas (semiconductor, electrical products, industrial products, consumer products), was starting a process which could lead to major changes in its planning and measurement systems Cliff Jamieson, Planning and Services Director, assigns to your group-work (5-6 people) the task of analyzing ESI planning and measurement systems In particular, he would like to receive from you a written relation providing an answer to some specific questions (see next slide) The relation should be briefly presented to a Corporate Committee for discussion by your group-speaker (time for presentation: 10-15 minutes) Time for reading the case: 30-40 minutes

3. QUESTIONS –Which are the techniques for measuring results traditionally used by ES Inc managers? –Using such traditional techniques, which are the results of ES Inc. in the 70s? –Despite to accounting measures, what is the shareholders’ situation? –Do the accounting measures select strategies that are bad for the shareholders? Do the accounting measures delete strategies that are good for the shareholders? (See exhibit 5 and 6). Does the VALUmod improve the evaluation procedure? −Which are then the main advantages and limits of traditional techniques versus VALUmod with respect to the general requirements of a MCS (completeness, long term orientation, timeliness, measurability, identification of specific responsibilities)? –As concerns “the future of the shareholder value model” which open issues related to the implementation of the VALUmod can be pointed into evidence?