Explaining implementation difficulties associated with activity-based costing through system uses

2018 ◽  
Vol 19 (1) ◽  
pp. 181-198 ◽  
Author(s):  
Elodie Allain ◽  
Claude Laurin
Keyword(s):  
Resistance To Change ◽  
Insurance Industry ◽  
Insurance Company ◽  
Activity Based Costing ◽  
General Applicability ◽  
Content Type ◽  
Cost System ◽  
Scope Of Application ◽  
Costing System

Purpose The purpose of this paper is to explore how and why the uses (enabling or controlling) of an activity-based costing system could cause difficulties in implementing such a cost system. Design/methodology/approach The authors conducted a case study in a French insurance company. Three successive research periods were undertaken: from March to August 2005, between October 2008 and June 2009, and in 2012. In total, 51 interviews were conducted during these periods. Other useful information was also collected through conversations, observation, and through the consultation of internal documents. Findings The results show that designing a cost system aimed at being simultaneously used in controlling and enabling ways can generate important difficulties. Furthermore, the results show that attempting to get around these difficulties could result in investing significant amounts of resources with no guarantee of success. Research limitations/implications Beyond the difficulties of extending the scope of application of case studies, the study was conducted in an organization involved in the insurance industry which could further limit its general applicability. Practical implications Based on the experience at Rassura, the authors argue that managers should be aware that designing and implementing a cost system that can simultaneously be used in both controlling and enabling ways is a very difficult, if not an insurmountable challenge. Originality/value The results highlight that one important characteristic of a cost system, how it is used, could explain, at least partially, implementation difficulties related to technical challenges, resistance to change and lack of resources.

Cognitive risk culture and advanced roles of actors in risk governance: a case study

2018 ◽  
Vol 19 (4) ◽  
pp. 327-342 ◽  
Author(s):  
Ruchi Agarwal ◽  
Sanjay Kallapur
Keyword(s):  
Systems Thinking ◽  
Systems Approach ◽  
Risk Governance ◽  
Research Approach ◽  
Insurance Company ◽  
Content Type ◽  
Cognitive Risk ◽  
Risk Culture ◽  
The Uk

PurposeThe purpose of this study is to explore the best practices for improving risk culture and defining the role of actors in risk governance.Design/methodology/approachThis paper presents an exemplar case of a British insurance company by using a qualitative case research approach.FindingsThe case study shows how the company was successful in changing from a compliance-based and defensive risk culture to a cognitive risk culture by using a systems thinking approach. Cognitive risk culture ensures that everybody understands risks and their own roles in risk governance. The change was accomplished by adding an operational layer between the first and second lines of defense and developing tools to better communicate risks throughout the organization.Practical implicationsPractitioners can potentially improve risk governance by using the company’s approach. The UK regulator’s initiative to improve risk culture can potentially be followed by other regulators.Originality/valueThis is among the few studies that describe actual examples of how a company can improve risk culture using the systems approach and how systems thinking simultaneously resolves several other issues such as poor risk reporting and lack of clarity in roles and responsibilities.

scholarly journals Xenic insurance company: ethical dilemma of an employee

2019 ◽  
Vol 13 (2) ◽  
pp. 24-29
Author(s):  
Naval Garg
Keyword(s):  
Health Policy ◽  
Ethical Dilemma ◽  
Design Methodology ◽  
Original Work ◽  
Insurance Company ◽  
Case Study Methodology ◽  
Content Type ◽  
Group Health ◽  
Study Methodology

Purpose This paper aims to depict the ethical dilemma of an employee in an insurance company who analyzed the group health policy of a major private telecommunication company. He noticed striking discrepancies and reported the findings to his superior. Design/methodology/approach Case study methodology is used for this study. Findings This paper reported the ethical dilemma faced by the employee. Originality/value This is an original work to the best of the author’s knowledge.

Dealing with the visibility created by accounting numbers – A case study of cost accounting translation in a transitional economy

2020 ◽  
Vol 10 (2) ◽  
pp. 277-303
Author(s):  
Catalin Nicolae Albu ◽  
Nadia Albu ◽  
Flavius Andrei Guinea ◽  
Mathew Tsamenyi
Keyword(s):  
Decision Making ◽  
Management Accounting ◽  
Actor Network Theory ◽  
Unintended Consequences ◽  
Content Type ◽  
Construction Companies ◽  
Cost System ◽  
Costing System ◽  
State Taxation ◽  
The Cost

PurposeThis paper investigates the process of translating a costing tool into operational use in the context of a transitional (post-communist) economy, where local institutions challenge the rationality of western methods.Design/methodology/approachBy mobilizing Actor–Network Theory, in particular Callon's four moments of translation, and by drawing data from an interventionist research, the paper focuses on the process of change instilled by the implementation of a costing tool in 20 Romanian construction companies.FindingsThe costing system is initially problematized as a tool for rational decision making. However, the visibility over the accounting figures generated by the costing tool instilled new roles for the cost system to manage internal and external interdependencies. First, two costing datasets were created, one for decision making and one for tax purposes, to manage the relationship with the state taxation authorities. Second, since the costing tool generated visibility over the field practices as well, engineers convinced management to drop the decision-making set of costs. The costing tool ultimately only became used for tax optimization, an originally unintended use, reflecting its translation process.Research limitations/implicationsBy taking an interventionist approach, the paper contributes to theorizing accounting in transitional economies by bringing their economic idiosyncrasies into the analysis.Practical implicationsThe results inform managers about the intended and unintended consequences of management accounting tools and about actors' role in shaping their use.Originality/valueOur research responds to recent calls to study how organizations configure their control systems in a rapidly changing environment and what is the role of management accounting in these arrangements.

ICICI Prudential: challenges in reaching the last mile

2020 ◽  
Vol 10 (4) ◽  
pp. 1-27
Author(s):  
Parthasarathi Das ◽  
Tapas Ranjan Moharana ◽  
Indirah Indibara
Keyword(s):  
Distribution Channel ◽  
Rural India ◽  
Insurance Company ◽  
Life Insurance Company ◽  
Market Strategy ◽  
Content Type ◽  
Rural Markets ◽  
Rural Market ◽  
Last Mile

Learning outcomes The specific learning objectives of the case are as follows: To contribute to the knowledge of environmental challenges faced by various financial companies while trying to foray into the rural markets, especially in case of insurance products’ expansion strategy; to understand the distribution strategy adopted by insurance companies in rural as well as urban markets; to apply the concepts such as mental accounting, designing and pricing of insurance products to develop an effective strategy for insurance products targeting the rural market; to be able to analyse the data available on products and the rural market structure that enables the students to derive from an implementable managerial framework and design an effective rural market strategy for insurance products; and to enable the students to evaluate the key rural market drivers, which will subsequently help them to develop a new structure of rural distribution channel. Case overview/synopsis ICICI Prudential Life Insurance Company Limited (IPRU) was trying to reach the last mile customers of rural India to tap the opportunity and meet the Indian Government's statutory requirement of financial inclusion. Even though the leadership of IPRU was optimistic about the untapped potential of rural India, and launched a separate business vertical - Rural Business Channel (RBC) in the year 2002 to cater to this target segment, yet it faced many strategic issues while foraying into the rural domain. The company struggled with both the designing of products as per the rural customers' needs, as well as the distribution of these products in rural areas. The present case study is an attempt to bring out the strategic challenges that were faced by the IPRU management, with a major focus on designing, pricing and distribution of rural insurance products. The case study will help the readers in understanding what might go wrong while entering new rural markets and how to deal with these challenges. Complexity academic level The case study can be used to teach both undergraduate and postgraduate management students. Supplementary materials Teaching Notes are available for educators only. Subject code CSS 8: Marketing.

Change readiness as fluid trajectories: a longitudinal multiple-case study

2018 ◽  
Vol 31 (5) ◽  
pp. 1153-1175 ◽  
Author(s):  
Florian Hemme ◽  
Matthew T. Bowers ◽  
Janice S. Todd
Keyword(s):  
Public Service ◽  
Resistance To Change ◽  
Multiple Case Study ◽  
Relative Strength ◽  
Change Readiness ◽  
Content Type ◽  
External Stakeholder ◽  
Multiple Case ◽  
High Level

Purpose The purpose of this paper is to analyze change process perceptions of public service employees and document how change readiness belief salience fluctuates and evolves throughout the implementation of a major organizational restructuring effort. Design/methodology/approach This research is a longitudinal multiple-case study of a major transformation initiative in a large North American public recreation organization. Over the course of 15 months, the authors conducted four rounds of personal interviews with 19 participants (65 interviews in total, each lasting 25–45 min). Additionally, the authors analyzed internal e-mail correspondence, memos, and meeting agendas, as well as external stakeholder communication. Finally, the primary researcher spent a significant amount of time collecting field notes while shadowing high-level managers and employees and attending meetings. Findings Overall, the authors documented a clear hierarchy of change readiness dimensions. The relative strength and temporal persistence of these dimensions can be traced back to various public organizing particularities. Moreover, the authors found that an initial focus on some readiness dimensions facilitated subsequent sensemaking processes whereas others hindered such engagement with the change project. Research limitations/implications This research is the first to empirically document temporal fluidity of change readiness dimensions and salience. Moreover, it offers a rare in-depth look at a changing public service organization. Practical implications This research helps change agents in developing tailored change messages and to better understand potential sources of frustration and resistance to change efforts. Originality/value No similar efforts exist to document the underlying dynamism of evolving change readiness perceptions.

An activity-based costing approach for detecting inefficiencies of healthcare processes

2015 ◽  
Vol 21 (1) ◽  
pp. 55-79 ◽  
Author(s):  
Lorella Cannavacciuolo ◽  
Maddalena Illario ◽  
Adelaide Ippolito ◽  
Cristina Ponsiglione
Keyword(s):  
Process Management ◽  
University Hospital ◽  
Management Tool ◽  
Accounting System ◽  
Methodological Framework ◽  
Activity Based Costing ◽  
Healthcare Organizations ◽  
Significant Information ◽  
Content Type

Purpose – The purpose of this paper is to set out a methodological framework to investigate how the integration of an activity-based costing (ABC) logic into the pre-existent accounting system supports healthcare organizations in identifying the inefficiencies related to their diagnostic therapeutic pathways (DTP) and related reengineering interventions. Design/methodology/approach – The BPM-ABC methodological framework has been applied to the case of a specific surgery pathway, at the Orthopaedic Division of a University Hospital in Italy. Findings – The case-study described in the paper points out: first, how the Business Process Management (BPM)-ABC methodology is able to produce significant information about consumed resources and the costs of the activities, useful to highlight opportunities for DTPs improvement; second, the barriers related to a pre-existing accounting system based on cost centres that can hinder the implementation of the BPM-ABC model. Practical implications – The case study points out the role of the ABC as a management tool for supporting decision-making processes. The ABC allows inferring information for two purposes. First, ABC supports a cost containment process as it allows highlighting the most cost-consuming activities and resources. Second, the ABC allows identifying reengineering paths, distinguishing between incremental and radical ones. Originality/value – This study represents a remarkable reference raising the awareness of the pivotal role accounting systems play in the management of the organizational processes.

Improving health care costing with resource consumption accounting

2016 ◽  
Vol 29 (6) ◽  
pp. 646-663
Author(s):  
Hasan Ozyapici ◽  
Veyis Naci Tanis
Keyword(s):  
Health Care ◽  
Real Life ◽  
Resource Consumption ◽  
Selling Price ◽  
Health Care Administrators ◽  
Content Type ◽  
The Difference ◽  
Costing System ◽  
Traditional Costing

Purpose – The purpose of this paper is to explore the differences between a traditional costing system (TCS) and resource consumption accounting (RCA) based on a case study carried out in a hospital. Design/methodology/approach – A descriptive case study was first carried out to identify the current costing system of the case hospital. An exploratory case study was then conducted to reveal how implementing RCA within the case hospital assigns costs differently to gallbladder surgeries than the current costing system (i.e. a TCS). Findings – The study showed that, in contrast to a TCS, RCA considers the unused capacity, which is the difference between the work that can be performed based on current resources and the work that is actually being performed. Therefore, it assigns lower total costs to open and laparoscopic gallbladder surgeries. The study also showed that by separating costs into fixed and variable RCA allows managers to benefit from a pricing strategy based on the difference between the service’s selling price and variable costs incurred in providing that service. Research limitations/implications – The limitation of this study is that, because of time constraints, the implementation was performed in the general surgery department only. However, since RCA is an advanced system that has the same application procedures for any department inside in a hospital, managers need only time gaps to implement this system to all parts of the hospital. Practical implications – This study concluded that RCA is better than a TCS for use in health care settings that have high overhead costs because it accurately assigns overhead costs to services by considering unused capacities incurred by a hospital. Consequently, this study provides insight into both measuring and managing unused capacities within the health care sector. This study also concluded that RCA helps health care administrators increase their competitive advantage by allowing them to determine the lowest service price. Originality/value – Since the literature review found no study comparing RCA with TCS in a real-life health care setting, little is known about differences arising from applying these systems in this context. Thus, the current study fills this gap in the literature by comparing RCA with TCS for both open and laparoscopic gallbladder surgeries.

I cross my heart, hope to live: LPCI Insurance Company’s dilemma in protecting mutual interests in Mexico

2016 ◽  
Vol 6 (1) ◽  
pp. 1-14
Author(s):  
Andrée Marie López-Fernández ◽  
Rajagopal
Keyword(s):  
Emerging Market ◽  
Holistic Approach ◽  
Subject Area ◽  
Added Value ◽  
Insurance Company ◽  
Content Type ◽  
Stakeholder Satisfaction ◽  
Doing Business ◽  
Business Dynamics

Subject area The subject area of the case study is strategic management with emphasis in stakeholder satisfaction and added value and business performance. Study level/applicability The case study illustrates the challenges of business dynamics in an emerging market. It is applicable, especially, for undergraduate and graduate students in management studies. Case overview The case of LPCI Insurance Company in Mexico illustrates the challenges that firms face when doing business in an unstable, rapidly changing environment. Conflict-affected areas pose significant threats and opportunities for firms; it is, however, up to the firm to decide whether to avoid change and risk or to design and execute effective strategies to tackle such external issues. The case has been developed in a narrative way as to demonstrate the intricacies of internal incidents and board meeting discussions, which lead to strategic planning and decision-making. Expected learning outcomes It is expected that students enhance their awareness of businesses’ role in the protection of Human Rights as a key factor in their engagement in corporate social responsibility and achievement of objectives. It is expected that students also increase their awareness of the implications of operating in a conflict-affected area in emerging markets. Also, it is expected that students learn that doing business effectively requires a holistic approach to business dynamics. Supplementary materials Teaching notes. Subject code CSS 11: Strategy.

scholarly journals Individual’s Resistance Regarding BPM Initiative: Case Study of the Insurance Company

2017 ◽  
Vol 63 (4) ◽  
pp. 29-39 ◽  
Author(s):  
Mirjana Pejić Bach ◽  
Vesna Bosilj Vukšić ◽  
Dalia Suša Vugec
Keyword(s):  
Structural Equation ◽  
Reasoned Action ◽  
Resistance To Change ◽  
Equation Model ◽  
Insurance Company ◽  
Initial Belief ◽  
Significant Barrier ◽  
The Impact ◽  
Shed Light

AbstractThough the individual’s resistance is very often considered a significant barrier to BPM success, the literature on that topic is quite scarce. With the aim to shed light on this topic, we have conducted research of a Croatian insurance company. We examined the impact of individual’s resistance regarding BPM initiative using the theory of reasoned action. Structural equation model was developed using the data collected by the survey among company employees. The results indicate that subjective norms are positively related to the individual’s resistance regarding BPM initiative, while positive initial belief regarding BPM initiative tends to decrease the probability of resistance to change.

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