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.

Management accounting networks in corporate processes – a cross-national study

2017 ◽  
Vol 13 (1) ◽  
pp. 25-43 ◽  
Author(s):  
Christoph Endenich ◽  
Rouven Trapp ◽  
Michael Brandau
Keyword(s):  
Decision Making ◽  
Field Study ◽  
Corporate Culture ◽  
Management Accounting ◽  
Actor Network Theory ◽  
National Study ◽  
Content Type ◽  
Theoretical Approaches ◽  
Corporate Context ◽  
Management Accountants

Purpose This study aims to compare styles of management accounting (MA), i.e. the way in which MA influences corporate decision-making, in German and Spanish companies. The study illustrates relevant differences by comparing the role of management accountants in decision-making processes and puts a particular emphasis on their networking activities in a corporate context. Design/methodology/approach This study builds on field study data from semi-structured interviews with senior management accountants in German and Spanish companies. The authors analyze the data within the framework of the actor-network theory (ANT). Findings In the sampled German companies, strong networks between management accountants and other corporate functions have been established, whereas the corresponding Spanish networks are emerging but remain fragile because of interference from anti-programs, mistrust and defensive departmental attitudes. Although MA in Spain has established only few accepted routines and remains distant from managerial decision-making, it enjoys an unquestioned standing in the German companies, because its routines and procedures are embedded into corporate culture. This embedding is facilitated by not only information technology but also relatively simple tools such as templates, timetables and standardized agendas. Research limitations/implications The present study underlines how combining the field study approach with rationales from ANT can provide relevant insights into MA practices in its corporate context. Practical implications The present study provides guidance for management accountants striving for an increased influence on corporate decision-making and an improved collaboration with corporate management. Originality/value The authors extend the traditional spectrum of theoretical approaches in comparative MA studies. The ANT lens allows to show how styles of MA are shaped by interdependencies between institutional settings and networking processes. In this way, this paper complements previous cross-country research, which has mainly relied on contingency theory to examine static, country-specific differences in relation to distinct environmental and cultural conditions.

Managerial perceptions of cost-system obsolescence and factors that might affect it

2019 ◽  
Vol 31 (7) ◽  
pp. 2884-2913
Author(s):  
Emre Cengiz ◽  
Funda Cengiz ◽  
Muhittin Cavusoglu ◽  
Cihan Cobanoglu
Keyword(s):  
Decision Making ◽  
Factor Analysis ◽  
Significant Relationship ◽  
Hotel Industry ◽  
Competitive Environment ◽  
Equation Modeling ◽  
Additional Insight ◽  
Content Type ◽  
Cost System ◽  
Insight Into

Purpose This study aims to report the descriptive statistics of cost-system obsolescence (CSO) in the Turkish hotel industry and contingent factors that affect the CSO. Design/methodology/approach To validate the reflective measurement model, first, an exploratory factor analysis in statistical package for social sciences was conducted. Then, a confirmatory factor analysis using maximum likelihood in analysis of moment structures was performed to establish the reliability and validity of the construct measurements. Findings The results demonstrate that CSO symptoms did not occur frequently in sample Turkish hotels. Turkish hotels were found to operate in intense competition and a significant relationship between competition intensity (CI) and CSO takes place. The hospitability industry has been perceived as rather uncertain. However, perceived environmental uncertainty (PEU) had no significant effect on CSO, and there was no mediation effect on the relationship between CI and CSO. Turkish hotels were found to perform market-orientated activities at a mediocre level. However, no significant relationship was found between market orientation (MO) and CSO. Additionally, Turkish hotels with decentralized decision-making structures and “prospector-type” strategies were found to have less CSO. On average, Turkish hotels have centralized decision-making structures and pursue “analyzer-type” strategies. Practical implications This study contributes to previous literature related to accounting information in the hotel industry. It also aims to give additional insight into Turkish hotels’ competitive environment, MO activities, decision-making structures and strategies and their association with CSO. Originality/value The study examined CSO in the Turkish hotel industry and factors that affect CSO. The study results provide additional insight into Turkish hotels’ competitive environment, MO activities, hotel structure and strategy. A new model to test CSO was created and validated using structural equation modeling (SEM).

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.

GEZ petrol station: CVP analysis and spread sheet modelling for planning and decision making

2015 ◽  
Vol 5 (3) ◽  
pp. 1-6
Author(s):  
Ku Nor Izah Ku Ismail ◽  
Wan Nordin Wan Hussin ◽  
Mat Supian Salleh
Keyword(s):  
Decision Making ◽  
Learning Outcomes ◽  
Management Accounting ◽  
Fixed Costs ◽  
Product Lines ◽  
Financial Model ◽  
Content Type ◽  
Petrol Station ◽  
Spreadsheet Model ◽  
Income Statement

Subject area Management Accounting and Financial Modelling. Study level/applicability Undergraduate and post-graduated levels. Case overview Aiman, the Area Manager of GEZ Berhad, realised the importance for petrol station operators to have an understanding of fundamental management accounting concepts such as cost behaviour and cost–volume–profit (CVP) analysis. He also believed that the petrol station operators should be proficient in using Microsoft Excel functionality and able to construct “intelligent” financial model with extended sensitivity analysis. Being a manager responsible for training the petrol station operators, Aiman would like to introduce the CVP concepts and spreadsheet model-building process to the petrol station operators, to aid them in planning and decision making. To construct the Excel spreadsheet model, Aiman sought the assistance of Rizal, a university lecturer in accounting, who in turn gathered the relevant operational and financial data from Baron Service Station, a typical petrol station under GEZ stable. The model should be flexible enough to allow the petrol station operator to anticipate, for example: What will happen to overall profitability of the petrol station if the fuel prices go up? What is the minimum volume of fuel that needed to be sold to break even? How much extra profit can be generated if credit card sale is reduced? and Is it viable to install an automated teller machines (ATM) kiosk and incurring administrative charges from bank to lure more customers to visit the petrol station? As the petrol station sells multiple products (petrol, diesel and convenience goods), the owner is also interested to know which product lines are the most and least profitable. Thus, the model should be able to generate segmented income statement with appropriate allocation of the common fixed costs to the each of the products. Expected learning - outcomes The case discussion is intended to achieve the following learning outcomes: students are able to prepare a financial model which include a segmented contribution income statement based on the information on product mix; students are able to calculate the break-even point and distinguish between fixed and variable costs; students are able to differentiate between traceable fixed costs and common fixed costs; students are able to build a financial model that is sufficiently flexible to allow various what if analysis to be performed; and students are able to use what if analysis tools in Excel such as Goal Seek and Data Tables. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes.

scholarly journals Costing in the Newcastle Infirmary, 1840-1888

2014 ◽  
Vol 27 (3) ◽  
pp. 465-488 ◽  
Author(s):  
Warwick Funnell ◽  
Andrew Holden ◽  
David Oldroyd
Keyword(s):  
Nineteenth Century ◽  
Decision Making ◽  
Financial Support ◽  
Design Methodology ◽  
Content Type ◽  
Provincial Hospital ◽  
Ex Post ◽  
Costing System ◽  
And Function ◽  
Decision Making Tool

Purpose – This paper examines the nature and function of cost accounting at the Newcastle Infirmary, a large voluntary provincial hospital, established in 1751. In particular, the paper adds to the literature on accounting within early voluntary hospitals by identifying the relative contributions of the costing system to planning and controlling the operations, assisting decision making and holding managers accountable for their performance. Design/methodology/approach – The paper relies primarily on original documents preserved in the archives of the Newcastle Infirmary. Findings – Although evidence was found of quite sophisticated costing systems, the findings suggest that the majority of the information was produced ex post by the hospital management to demonstrate good stewardship and to engender financial support. Research limitations/implications – More cases are needed of other hospitals to ascertain how typical the Newcastle Infirmary was of the voluntary hospital sector in the nineteenth century. Originality/value – Although there are other studies of accounting within British voluntary hospitals, and studies of the use of accounting to drive decision making in profit-making organisations during the nineteenth century, none have investigated the use of accounting as a decision-making tool in a voluntary hospital.

scholarly journals DESAFIOS PARA IMPLANTAR UM SISTEMA DE CUSTOS EM TRIBUNAL REGIONAL DO TRABALHO NO RIO GRANDE DO SUL

2018 ◽  
Vol 15 (1) ◽  
pp. 29
Author(s):  
Giovani Pasa Colussi ◽  
Ângela Rozane Leal de Souza
Keyword(s):  
Administrative Support ◽  
Indirect Costs ◽  
Cost System ◽  
Regional Labor ◽  
Qualitative Descriptive ◽  
Administrative Area ◽  
Costing System ◽  
The Cost ◽  
Productivity Gains

Com a obrigatoriedade para implantação de um sistema de custos no Tribunal Regional do Trabalho da 4ª Região (TRT4) até 2020, o presente estudo tem como questão problema detectar quais informações o sistema de custos deverá gerar para os gestores do TRT4. Esta pesquisa objetiva demonstrar as diretrizes do Sistema de Custos da Justiça do Trabalho (SICJT) e as necessidades do Sistema de Custos do Tribunal Regional do Trabalho da 4ª Região (SICTRT4) apontadas pelos gestores do Tribunal. A pesquisa é definida como qualitativa, descritiva e estudo de caso. Foram realizadas entrevistas com os gestores do TRT4 e analisados documentos referentes ao SICJT. Para o SICTRT4, foram apontados: (a) o método de custeio: custeio direto ou ABC; (b) o rateio dos custos indiretos: na área judiciária e administrativa; (c) os benefícios: ganho de produtividade, comparabilidade, maior transparência; (d) as informações geradas: custo do processo julgado pelas instâncias, relatórios e informações confiáveis; e (e) os centros de custos: unidades do 1º e 2º grau, apoio judiciário, apoio administrativo e as áreas autônomas. Os desafios encontrados são orçamentários, tais como a falta de conhecimento e divulgação do sistema pela administração, a resistência a mudanças e a falta de sistemas específicos.Palavras-chave: Sistema de custos. Custos aplicados ao setor público. TRT4.ABSTRACTWith the obligation to implant a cost system in the Regional Labor Court of the Fourth Region (TRT4) by 2020, the present study has as problem what information the cost system should generate for TRT4 managers. This research aims to demonstrate the guidelines of the Labor Justice Costing System (SICJT) and the needs for the Regional Labor Court of the Fourth Region Costing System (SICTRT4) pointed by the court managers. This study is defined as qualitative, descriptive and case study. Interviews were conducted with the TRT4 managers and documents related to the SICJT were analyzed. For the SICTRT4 were found: (a) costing method: direct costing method or ABC costing method; (b) apportionment: indirect costs distribution in the judicial and administrative area; (c) benefits: productivity gains, comparability, greater transparency; (d) generated information: judged cases costs from all instances, reports and reliable information; (e) costs centre: 1st and 2nd instances, legal aid, administrative support and autonomous areas. The challenges found are budget, lack of knowledge and disclosure of the system from by the administration, resistance to changes and lack of specific systems.Keywords: Costing system. Public costing. TRT4.

scholarly journals Vibration Edge Computing in Maritime IoT

2022 ◽  
Vol 3 (1) ◽  
pp. 1-18
Author(s):  
Anna Lito Michala ◽  
Ioannis Vourganas ◽  
Andrea Coraddu
Keyword(s):  
Decision Making ◽  
Edge Computing ◽  
Decision Making Process ◽  
Process Data ◽  
Content Type ◽  
Time Dynamic ◽  
Data Volume ◽  
Promising Solution ◽  
The Cost ◽  
The Impact

IoT and the Cloud are among the most disruptive changes in the way we use data today. These changes have not significantly influenced practices in condition monitoring for shipping. This is partly due to the cost of continuous data transmission. Several vessels are already equipped with a network of sensors. However, continuous monitoring is often not utilised and onshore visibility is obscured. Edge computing is a promising solution but there is a challenge sustaining the required accuracy for predictive maintenance. We investigate the use of IoT systems and Edge computing, evaluating the impact of the proposed solution on the decision making process. Data from a sensor and the NASA-IMS open repository were used to show the effectiveness of the proposed system and to evaluate it in a realistic maritime application. The results demonstrate our real-time dynamic intelligent reduction of transmitted data volume by without sacrificing specificity or sensitivity in decision making. The output of the Decision Support System fully corresponds to the monitored system's actual operating condition and the output when the raw data are used instead. The results demonstrate that the proposed more efficient approach is just as effective for the decision making process.

A novel model for risk management of outsourced construction projects using decision-making methods: a case study

2020 ◽  
Vol 10 (2) ◽  
pp. 97-123 ◽  
Author(s):  
Amin Mahmoudi ◽  
Mehdi Abbasi ◽  
Xiaopeng Deng ◽  
Muhammad Ikram ◽  
Salman Yeganeh
Keyword(s):  
Decision Making ◽  
Construction Projects ◽  
Project Managers ◽  
Analytic Hierarchy ◽  
Suitable Alternative ◽  
Content Type ◽  
Proposed Model ◽  
The Cost ◽  
First Time

PurposeSelecting a suitable contract to outsource construction projects is an ongoing concern for project managers and organizational directors. This study aims to propose a comprehensive model to manage the risks of outsourced construction project contracts.Design/methodology/approachTo employ the proposed model, firstly, the types of contracts and risks in the organization should be identified, then, to prioritize the contracts, the identified risks are considered as criteria. After receiving the experts' opinions, the best–worst method (BWM) integrated with grey relation analysis (GRA) method was used to prioritize the contracts. BWM and GRA are multi-criteria decision-making methods with different approaches and applications. In the current study, BWM has been employed to calculate the weights of criteria because it has better performance than other methods such as the analytic hierarchy process (AHP). After calculating the weights of criteria, the GRA method has been utilized for ranking the alternatives.FindingsAccording to the results obtained from the case study, the cost plus award fee contract is the most suitable alternative for outsourcing construction projects. The proposed methodology can be practically applied through different types of the projects such as construction or “engineering, procurement and construction”.Originality/valueTo the best of our knowledge, this is the first time a conceptual model has been proposed to select an appropriate contract for construction projects. Also, for the first time, the BWM integrated with GRA method has been used to prioritize project contracts based on the potential risks. The proposed model can contribute to project managers for selecting a suitable contract with the least risk in construction projects.

Including decision-makers preferences in the cost-deprivation trade-off during disaster interventions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Florian Diehlmann ◽  
Patrick Siegfried Hiemsch ◽  
Marcus Wiens ◽  
Markus Lüttenberg ◽  
Frank Schultmann
Keyword(s):  
Decision Making ◽  
Humanitarian Logistics ◽  
Decision Makers ◽  
Weighted Sum ◽  
Trade Off ◽  
Content Type ◽  
Multi Objective ◽  
Conflicting Objectives ◽  
The Cost

Purpose In this contribution, the purpose of this study is to extend the established social cost concept of humanitarian logistics into a preference-based bi-objective approach. The novel concept offers an efficient, robust and transparent way to consider the decision-maker’s preference. In principle, the proposed method applies to any multi-objective decision and is especially suitable for decisions with conflicting objectives and asymmetric impact. Design/methodology/approach The authors bypass the shortcomings of the traditional approach by introducing a normalized weighted sum approach. Within this approach, logistics and deprivation costs are normalized with the help of Nadir and Utopia points. The weighting factor represents the preference of a decision-maker toward emphasizing the reduction of one cost component. The authors apply the approach to a case study for hypothetical water contamination in the city of Berlin, in which authorities select distribution center (DiC) locations to supply water to beneficiaries. Findings The results of the case study highlight that the decisions generated by the approach are more consistent with the decision-makers preferences while enabling higher efficiency gains. Furthermore, it is possible to identify robust solutions, i.e. DiCs opened in each scenario. These locations can be the focal point of interest during disaster preparedness. Moreover, the introduced approach increases the transparency of the decision by highlighting the cost-deprivation trade-off, together with the Pareto-front. Practical implications For practical users, such as disaster control and civil protection authorities, this approach provides a transparent focus on the trade-off of their decision objectives. The case study highlights that it proves to be a powerful concept for multi-objective decisions in the domain of humanitarian logistics and for collaborative decision-making. Originality/value To the best of the knowledge, the present study is the first to include preferences in the cost-deprivation trade-off. Moreover, it highlights the promising option to use a weighted-sum approach to understand the decisions affected by this trade-off better and thereby, increase the transparency and quality of decision-making in disasters.

The implementation of activity-based costing by a local government: an actor-network theory and trial of strength perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maurice Gosselin ◽  
Marc Journeault
Keyword(s):  
Public Sector ◽  
Local Government ◽  
Network Theory ◽  
Management Accounting ◽  
Actor Network Theory ◽  
Activity Based Costing ◽  
Actor Network ◽  
Content Type ◽  
Public Sector Organizations ◽  
Human Actors

Purpose Some public sector organizations have decided to implement activity-based costing (ABC), a new cost calculation device and management accounting innovation initially designed for the private sector. The purpose of this study is to better understand the translation of this new calculation device in the context of a local government and to identify the trials of strength that actors faced during the implementation. Design/methodology/approach Building on actor-network theory and the concept of “trial of strength,” this study examines how a major change in a large local government’s structure, the merger of several cities, led to the adoption of ABC. This case study provides a setting for conducting a longitudinal analysis of the translation of a cost management innovation, ABC, in a public sector organization. Findings This study highlights how human and non-human actors interact when implementing a management accounting innovation in a local government and the trials of strength that they face. It also shows that although ABC helped the local government deal with issues such as setting fees, assessing outsourcing opportunities, increasing accountability and improving processes, the oversophistication of the technology used to implement the ABC model and the lack of links between the costing device and the budgeting process provoked a struggle among these two networks, leading actors to choose the budget over ABC. Originality/value This study’s findings extend the work on trials of strength of Christensen et al. (2019) and Laguecir et al. (2020). While those two studies focused on the struggles existing between opposing networks of human actors regarding the strategic orientation or the mission of public sector organizations, this study highlights that trials of strength may also occur when actors agree on the objectives of the new accounting innovation but not on how it is implemented.

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