In the previous chapter we discussed the process by which ABC teams were formed and described team characteristics. In this chapter, we probe more deeply into a key element of the team process and consider team functioning and team... more
In the previous chapter we discussed the process by which ABC teams were formed and described team characteristics. In this chapter, we probe more deeply into a key element of the team process and consider team functioning and team composition against a backdrop of extensive research on the effective use of teams in organizations.1
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Research Interests: Business, Marketing, Economics, Econometrics, Consumption, and 15 moreManagement Science, Elasticity, Goal Setting, Counterfactual Thinking, Information Exchange, Not applicable, Performance Improvement, Incentive, Goal Orientation, Incentives, Cross Section, Empirical Method, Pay for performance, Discrete Choice, and Computer Sciences
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This chapter provides a narrative history of the emergence of ABC as a corporate initiative in the firms in our study. A major theme that runs through both accounts is the bureaucratic processes associated with bringing ABC to corporate... more
This chapter provides a narrative history of the emergence of ABC as a corporate initiative in the firms in our study. A major theme that runs through both accounts is the bureaucratic processes associated with bringing ABC to corporate consciousness and evaluating its potential as a corporate initiative. We use the term “bureaucratic” not in a pejorative sense, but to highlight a major difference between implementing ABC in a small versus a large firm. In a small firm a single ABC model can include all costs and the “pilot” study is the forerunner of the completed model. In a large firm hundreds of ABC models are needed to capture all of the business activities and costs of the firm, and any pilot study of necessity provides only a glimpse of the likely future challenges, costs and benefits of deploying ABC to the full organization. We use our observations at General Motors and Chrysler, as well as literature on the implementation of information technology and cost management change to develop a model of ABC implementation.
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Abstract: Accountants have developed tools to evaluate firms' quality performance; however, a focus on evaluating one aspect of quality?? conformance to pre-established specifications?? has limited unnecessarily accountants'... more
Abstract: Accountants have developed tools to evaluate firms' quality performance; however, a focus on evaluating one aspect of quality?? conformance to pre-established specifications?? has limited unnecessarily accountants' contribution to quality ...
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Research Interests: Business, Management, Computer Science, Economics, Operations Research, and 11 moreManagement Science, Transaction Cost Economics, Commerce, Social Science Research Network, Resource Based View, Management Control System, Control Management, Transaction Cost, Strategic Resources, Residual risk, and Residual
The genesis of ABC at General Motors Corporation and at what is now the Chrysler Group of Daimler-Chrysler AG can be traced to the mid and late 1980’s, respectively. As researchers, we were privileged to observe and interact with these... more
The genesis of ABC at General Motors Corporation and at what is now the Chrysler Group of Daimler-Chrysler AG can be traced to the mid and late 1980’s, respectively. As researchers, we were privileged to observe and interact with these firms throughout the 1990’s, when ABC was rolled out to all manufacturing locations and some administrative functions. Our most intensive interactions occurred in 1995, with extensive Visits to 21 ABC implementation sites and interviews with 265 managers and ABC team members. Using these data and historical archives from the ABC systems, the preceding chapters provide a piercing look at the first decade of ABC through the lens of two large companies that chose to adopt and implement it. However, we would be remiss if we did not consider how events of recent years --- including dramatic changes in the boundaries and ownership of both firms, advances in information technology, and a booming U.S. consumer market --- have affected the ABC initiative. In this chapter we provide an update on the ABC initiatives. With the help of experienced corporate managers who have been involved for many years with ABC, we reflect on what ABC was, what it is today, what is envisioned for the future.
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Research Interests: Business, Finance, Sociology, Psychology, Actuarial Science, and 11 moreAccounting, Management Accounting, Governance, Performance Measurement, Applied Economics, Subjectivity, Social Science Research Network, Executive Compensation, Discretion, Salary, and Information Systems Development And Management
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In the business literature, emphasis on business activities and processes can be traced to Michael Porter’s (1980) “value chain” framework for analyzing sources of firms’ competitive advantage. During the same time period, Porter’s... more
In the business literature, emphasis on business activities and processes can be traced to Michael Porter’s (1980) “value chain” framework for analyzing sources of firms’ competitive advantage. During the same time period, Porter’s colleagues at Harvard Business School, Robin Cooper and Robert Kaplan, discovered firms that had modified traditional cost accounting systems to better represent the flow of resources to the products and services that consumed them. Traditional costing systems are typically designed to allocate overhead costs from the general ledger to an entity with reporting responsibility (e.g., profit centers, cost centers, or investment centers) and from that entity to the products or services that it produces. The latter allocation of overhead costs to products is typically accomplished by prorating overhead costs on the basis of direct labor hours, material costs, or another measure of unit variable costs.
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Katzenberg and Smith (1993) define a team as “a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.” Teams are... more
Katzenberg and Smith (1993) define a team as “a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.” Teams are considered effective organizing units because of the flexibility they offer. Unlike large organizations, teams can be assembled quickly and can focus on performing specific tasks. Once tasks are completed, team members can return to their regular job responsibilities or be redeployed to another team. Teams can range from supervised workgroups that perform routine, repetitive tasks, to those that are self-managed and involved with high level decision responsibility. According to a survey done by Lawler, Mohrman and Ledford (1995) teams have proliferated to such an extent that 68% of the Fortune 1000 firms use self-managed teams as a work unit.
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A growing empirical literature in accounting, operations management and marketing has provided evidence of a significant set of relationships between a firm’s overall customer satisfaction and operational and financial measures of... more
A growing empirical literature in accounting, operations management and marketing has provided evidence of a significant set of relationships between a firm’s overall customer satisfaction and operational and financial measures of performance. Each of these different functional areas approach the study of these relationships from divergent perspectives but all share the goal of understanding what variables are most closely related to firm financial performance. Research in accounting and operations management has demonstrated a significant linkage between operational measures of performance, customer satisfaction and financial performance (Banker et al. 2000; Behn and Richard A. Riley 1999). However, research conflicts as to whether nonfinancial variables are contemporaneous measures (Behn and Riley 1999) or leading indicators of financial performance.(Ittner and Larcker 1998). While marketing theory suggests increased profitability through both increased price premiums and increased repeat business, Banker et al. (2000) found that increased profitability was only related to increased repeat business. In marketing, a fruitful stream of research has identified and documented a strong positive relationship between customer satisfaction, market share and profitability (Anderson and Fornell 2000; Anderson et al. 1994; Anderson et al. 1997; Anderson and Mittal 2000; Capon et al. 1990). This linkage has
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List of Figures and Tables About the Authors. Preface. 1: Introduction and Overview. 1. Introduction. 2. Background for the Study. 3. Key Findings. Appendix 1: The Design of the Research. 1. Overview. 2. Field Research Procedures. 3. Data... more
List of Figures and Tables About the Authors. Preface. 1: Introduction and Overview. 1. Introduction. 2. Background for the Study. 3. Key Findings. Appendix 1: The Design of the Research. 1. Overview. 2. Field Research Procedures. 3. Data Analysis. 2: What We Know (and Don't Know) about ABC Implementation. 1. The Genesis of Activity Based Costing. 2. What We Know About ABC Implementation. 3. What We Don't Know About ABC Implementation. 3: The Emergence of Corporate ABC Initiatives: Towards A Model of ABC Implementation. 1. Overview. 2. General Motors' Adoption of ABC. 3. General Motors' Deployment of ABC. 4. Chrysler's Adoption of ABC. 5. Chrysler's Deployment of ABC. 6. A Model of ABC Implementation. 4: Influences on, and Characteristics of, the ABC Development Teams. 1. Overview. 2. Becoming a Team Member. 3. Characteristics of ABC Development Teams. 4. Profiling the ABC Development Teams. 5. Managerial Implications for Team Design. 5: Factors Influencing the Performance of ABC Teams. 1. Overview. 2. The Model and Research Expectations. 3. Variable Measurement. 4. Results. 5. Summary. 6: Evaluating ABC Projects: Sponsors, Gatekeepers, Enablers, and Impediments. 1. Overview. 2. Determinants of ABC Project Outcomes. 3. Identification and Measurement of Variables. 4. Data Analysis. 5. Results. 6. Summary. 7: Goals of ABC Implementation and Means of Attainment. 1. Overview. 2. Research Question. 3. Goals for ABC Projects as the Basis for Evaluating Project Outcomes. 4. Summary. 8: What Have We Learned? 9: Where are They Now? Reflections on the Past Five Years. 1. Overview. 2. General Motors Corporation: The Form and Substance of ABC in 2001. 3. Chrysler Group of Daimler-Chrysler AG: The Form and Substance of ABC in 2001. 4. Common Themes, Uncommon Challenges. Appendix 2: Survey of Activity Based Costing Implementation. Appendix 3: Management Survey of Activity Based Costing Implementation. References. Index.
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Research Interests: Business, Marketing, Applied Mathematics, Computer Science, Economics, and 14 moreAttribution Theory, Service Quality, Customer Satisfaction, Experimental Research, Airline Industry, Social Science Research Network, Business and Management, Service Operations, Failure Recovery, Attribution, Blame, Manufacturing and Service Operations Management, Service Provider, and service Business
Chapter 6 investigated determinants of ABC implementation success using an overall measure of ABC system effectiveness. Previous studies employ similar composite evaluation scales; however, a limitation of this approach is that it does... more
Chapter 6 investigated determinants of ABC implementation success using an overall measure of ABC system effectiveness. Previous studies employ similar composite evaluation scales; however, a limitation of this approach is that it does not permit exploration of multi-dimensional aspects of system effectiveness. One objective of this research is to provide evidence on the criteria that managers use in evaluating ABC systems and to investigate the claim that determinants of ABC project outcomes differ depending on which criteria are considered (e.g., Cooper et al., 1992). Foster and Swenson (1997) describe three evaluation measures that researchers use as components of overall ABC system evaluation. Although the components have logical appeal, they are not predicated on formal scale development methods. The field-research approach of this study allows us to investigate the evaluation criteria used by survey respondents to assess ABC system effectiveness.
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In Chapters 4 and 5 we focused on the ABC design team and how team dynamics affect project outcomes and are affected by external circumstances. In this chapter we decrease the magnification of our microscope to get a broader view of ABC... more
In Chapters 4 and 5 we focused on the ABC design team and how team dynamics affect project outcomes and are affected by external circumstances. In this chapter we decrease the magnification of our microscope to get a broader view of ABC implementation while retaining our focus on specific ABC implementation projects. Specifically, we address the question of which organizational and technical factors affect outcomes of ABC implementation projects. Historically, ABC implementation studies have focused on “fixing” traditional cost Systems’ distorted product costs by using causally related “cost drivers” to assign overhead costs. Later studies argued that a judiciously designed ABC System could also be an effective tool for modifying employee behavior to support corporate strategy.1 Since then, evidence of ABC implementation failures2 has caused researchers to suggest that achieving either objective depends critically on certain organizational and technical factors. Research3 Supports this; however, as discussed in Chapter 2, these studies focus on a firm’s overall experience with ABC rather than on specific ABC implementation projects.
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Abstract We study the relation between a manager’s growth mindset and their use of resource management practices. Growth mindset is based on implicit person theory and is an established and measurable psychological construct. It refers to... more
Abstract We study the relation between a manager’s growth mindset and their use of resource management practices. Growth mindset is based on implicit person theory and is an established and measurable psychological construct. It refers to a person’s deeply held beliefs about whether, in general, people can learn, develop, and change throughout their lives or whether “who they are” is relatively fixed by initial talent endowments (termed a ‘fixed mindset’). Given the demonstrated importance of a growth mindset for educational outcomes and the emerging research studying the influence of mindset on behavior within organizations, we explore whether school principals’ mindset is associated with their resource management practices. Using survey and archival data from 257 primary and secondary school principals, we find that a growth mindset is associated with greater use of budgets to explain and discuss budget variances with key constituents and as an enabler in their managerial role. Principals with a growth mindset also engage in fundraising activities and use non-financial rewards for their teachers significantly more than fixed mindset principals. We also find that the relations between a principal’s mindset and some of these practices are different depending on the school’s performance context.
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ABSTRACT: This study examines two questions: when do firms make greater use of sub-jectivity in awarding bonuses, and what are the effects of subjectivity on employee pay satisfaction and firm performance? We examine these questions using... more
ABSTRACT: This study examines two questions: when do firms make greater use of sub-jectivity in awarding bonuses, and what are the effects of subjectivity on employee pay satisfaction and firm performance? We examine these questions using data from a sample of 526 department managers in 250 car dealerships. First, the findings suggest that subjec-tive bonuses are used to complement perceived weaknesses in quantitative performance measures and to provide employees insurance against downside risk in their pay. Specifi-cally, use of subjective bonuses is positively related to: (1) the extent of long-term invest-ments in intangibles; (2) the extent of organizational interdependencies; (3) the extent to which the achievability of the formula bonus target is both difficult and leads to signifi-cant consequences if not met; and (4) the presence of an operating loss. Second, we find
Buku Dasar-Dasar Akuntansi Biaya ini masih mendapatkan apresiasi di pasar sebagai satu-satunya buku teks yang sangat mudah dipahami. Seluruh teks, tampilan, dan ilustrasi yang disajikan dalam buku ini memberikan gambaran jelas sehingga... more
Buku Dasar-Dasar Akuntansi Biaya ini masih mendapatkan apresiasi di pasar sebagai satu-satunya buku teks yang sangat mudah dipahami. Seluruh teks, tampilan, dan ilustrasi yang disajikan dalam buku ini memberikan gambaran jelas sehingga memudahkan mahasiswa dalam memahami topik-topik yang dibahas. Materi pembahasan disajikan berdasarkan perspektif penulis dan para pengguna, sehingga buku ini juga dapat digunakan oleh mahasiswa dari luar program studi akuntansi. Sama seperti tiga edisi sebelumnya, edisi keempat buku juga memiliki tujuan untuk memberikan pembahasan terkait dengan akuntansi biaya yang membuat para mahasiswa memahami perkembangan teknik dan prasarana akuntansi biaya sebagai respons alami terhadap upaya pengambilan keputusan. Materi pada buku Dasar-Dasar Akuntansi Biaya Edisi 4 Buku 1 ini telah diperbarui dengan menyertakan pembahasan baru yang mengaitkan antara manajemen biaya berbasis aktivitas (activity-based costing) dengan lean manufacturing dan lean accounting, serta pembahasan baru terkait strategi dan kinerja.xxiv, 574 hlm.; 28 cm
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ABSTRACT Firm boundaries no longer define the relevant entity for performance management for many firms. Competitive forces, deregulated economies and technological advances have reduced the costs of transacting with external parties and... more
ABSTRACT Firm boundaries no longer define the relevant entity for performance management for many firms. Competitive forces, deregulated economies and technological advances have reduced the costs of transacting with external parties and diminished the value of vertical integration. At the same time, the potential returns to collaboration have increased, as firms with unique capabilities join forces to more rapidly develop and deliver innovative products and services. Collaboration may take the form of arrangements that align the interests of participating parties through formal profit-sharing rules (e.g., franchises, licensing arrangements, and joint ventures). Alternatively, they may take a more amorphous form, using few mechanisms from contract law to structure their interactions or allocate the gains from trade (e.g., strategic alliances, strategic partnerships, consortia, extended enterprises, and strategic supply chains). Although the research and teaching in some management disciplines reflect the trend toward collaboration as a mode of organizing economic activity, the field of accounting has generally been unresponsive to these changes. We posit that new management accounting practices are fulfilling old demands for performance measurement and management control in new ways to facilitate this capability. At the same time, they are also fulfilling new demands for promoting learning and rich communication in a coordinated network of partner firms. In developing our case, we review theory and evidence from the corporate strategy literature, the organizational literature, and to a lesser degree, the operations management and management accounting literatures. We also conduct a thorough search of the practitioner literature to identify contemporary accounts of partner relationships. Our objective is to suggest a new research agenda for the extended enterprise that is linked to what has traditionally been termed management accounting research, but which challenges these boundaries using literatures that have begun to explore the contours of the new organizational landscape.
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Overview of Volumes 1, 2 and 3 MANAGEMENT ACCOUNTING PRACTICES 2.1. Managing Costs and Cost Structure throughout the Value Chain: Research on Strategic Cost Management Shannon W.... more
Overview of Volumes 1, 2 and 3 MANAGEMENT ACCOUNTING PRACTICES 2.1. Managing Costs and Cost Structure throughout the Value Chain: Research on Strategic Cost Management Shannon W. Anderson............................................................. 481 2.2. Target Costing: Uncharted Research Territory Shahid Ansari, Jan Bell and Hiroshi Okano............................................. 507 2.3. Cost and Profit Driver Research Rajiv D. Banker and Holly Hanson Johnston...................... ....... ... ... Overview of Volumes 1, 2 and 3 2.22. The History of Management Accounting in ...
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Performance measurement systems (PMSs) are used to diagnose and remediate problems, termed the “decision-facilitating” or feedback role of management control. We examine whether use of PMSs by individual decision makers is associated with... more
Performance measurement systems (PMSs) are used to diagnose and remediate problems, termed the “decision-facilitating” or feedback role of management control. We examine whether use of PMSs by individual decision makers is associated with better performance. Experimental studies have isolated individual-level effects of feedback on decision quality; however, it is difficult to extend these findings to natural settings. Archival and survey studies offer evidence on the association between the presence of PMSs and performance but have had limited success in measuring decision makers’ actual use of PMSs and addressing endogeneity of the decision to use PMSs. We use unobtrusively collected data on actual PMS use in 30 K–12 charter schools over three years to test whether teachers who make greater use of two PMSs are associated with greater growth in student learning. We find that teachers’ use of PMSs is associated with increased student learning, consistent with the premise that PMSs f...
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We investigate whether prior collaboration experience affects a focal partner's response to the precision of monitoring controls adopted by a new partner, with consequences for their goodwill trust in, and subsequent cooperation with,... more
We investigate whether prior collaboration experience affects a focal partner's response to the precision of monitoring controls adopted by a new partner, with consequences for their goodwill trust in, and subsequent cooperation with, the new partner. We expect the partner to interpret their new partner's adoption of precise monitoring controls as either an effort to limit their autonomy or to reduce information asymmetry. The partner's experience with past partners is posited to determine which interpretation is salient, with negative (positive) experiences favoring the former (latter). We find that partners with an uncooperative (cooperative) experience exhibit lower (higher) goodwill trust in the new partner when controls are more precise. Further, prior experience moderates the indirect relation between the precision of monitoring controls and partner cooperation acting through goodwill trust. The results demonstrate the importance of prior experiences in the design ...
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ABSTRACT Despite the growth in the number of collaborative inter-organizational relationships ('IORs'), the failure rate of these collaborations remains high. Prior studies draw attention to the fact that events which take... more
ABSTRACT Despite the growth in the number of collaborative inter-organizational relationships ('IORs'), the failure rate of these collaborations remains high. Prior studies draw attention to the fact that events which take place during the formation phase of IORs have a large impact on the subsequent development and success of IORs. We add to this research by examining how two factors in the formation phase of IORs - the buyer managers’ autonomy to choose suppliers and the willingness displayed by managers of suppliers ('supplier managers') to share information - affect the initial trust which managers of buyer firms ('buyer managers') have in their supplier firms ('suppliers'); and how initial trust subsequently affects the buyer managers’ control and collaboration decisions. We hypothesize that buyer managers with the autonomy to select suppliers will emphasize the positive attributes and deemphasize the negative attributes of the selected suppliers, which causes them to view the selected suppliers in a more positive light and to increase their initial trust in the supplier. Also, we posit that buyer managers will attribute the willingness of supplier managers to share information to the trustworthiness of the supplier managers; and that this trust will be transferred, at least in part, to the supplier firms. Therefore, we expect the buyer managers’ autonomy to select suppliers, and the supplier managers’ willingness to share information, to increase the initial trust that buyer managers have in the suppliers. We predict that the higher level of initial trust will, in turn, cause buyer managers to reduce the level of ex-post controls used to manage suppliers and to increase investment in the collaboration. Using an experimental approach, we provide evidence that supports these hypotheses. As distinct from prior studies that focus on partner characteristics and the content of information shared between transacting partners, this study finds that the freedom to choose partners, independent of partner characteristics, and the act of sharing information, independent of the content of information shared, are sufficient to shape initial trust perceptions and affect subsequent economic decisions.
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... Using Brazilian data, de Medeiros and de Souza Costa [2004] find that costs are stickier for Brazilian firms than for US firms. ... Page 14. Understanding Cost Management 12 becoming insignificant when four-year periods were... more
... Using Brazilian data, de Medeiros and de Souza Costa [2004] find that costs are stickier for Brazilian firms than for US firms. ... Page 14. Understanding Cost Management 12 becoming insignificant when four-year periods were aggregated. In a similar test, de Medeiros and de ...