Asia Pacific Journal of Management

, Volume 25, Issue 2, pp 209–224 | Cite as

How to measure company productivity using value-added: A focus on Pohang Steel (POSCO)

Article

Abstract

How should the performance of a manufacturing company be assessed, relative to firms making similar products, at home and abroad? This paper shows how company-level productivity measures can be developed from public financial data to provide a more comprehensive gauge of firm performance than profit rates alone. As a specific example, we focus on the Korean steelmaker, POSCO. Founded four decades ago, POSCO is commonly regarded as the world’s most efficient and profitable integrated steel producer, and our analysis documents POSCO’s superior record of profitability and labor productivity. We find, however, that a broader assessment of POSCO’s performance is tempered by the firm’s high capital intensity relative to producers in Japan and the United States.

Keywords

Productivity Performance assessment Steel industry POSCO Value-added 

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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.UCLA Anderson School of ManagementLos AngelesUSA
  2. 2.Seoul National UniversitySeoulSouth Korea

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