Is Standard Costing Still Used? Evidence from Turkish Automotive Industry

Badem, Abdullah; Ergin, Emre; Drury, Colin

doi:10.5539/ibr.v6n7p79

Cited by 14 publications

(10 citation statements)

References 8 publications

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“…Thus, any developments in the automobile industry influence other industries parallelly. Due to its interconnectedness and being the largest export industry in Turkey (Badem et al , 2013), understating automotive incumbents adopted MC is critical. The automotive sector requires cross-border alliances to manage increased sunk costs and attain economies of scale.…”

Section: Contextmentioning

confidence: 99%

Dynamic and marketing capabilities as determinants of firm performance: evidence from automotive industry

Cataltepe¹,

Kamaşak

Bulutlar

et al. 2022

JABS

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Purpose This study aims to explore the roles and relations of dynamic capabilities (DCs) and marketing capabilities (MCs) to generate firm performance through new empirical data from the automotive industry in an emerging market, Turkey, where volatile market conditions may compel firms to use both their DCs and MCs. The automotive industry dynamic character, which is shaped by fierce competition among car manufacturers, fluctuating customer demands and strong effect of environmental forces, provides an ideal context for examining the performance outcomes of MC and DC in non-static environments. This study aims to show whether better financial performance can be achieved through an integrated MC and DC framework; if the level of environmental dynamism (ED) influences the utilization of MCs; and the impact of MC and DC convergence on firm performance by using emerging market data, which is rare in the extant literature. Design/methodology/approach This paper empirically investigates the role of MCs on the relationship between DCs and firm performance and the effect of ED in marketing capability development through a study of 162 top level managers from the automotive industry in Turkey using multiple regression methods. A self-administered questionnaire was used to collect data. A maximum concern was given to obtain at least three questionnaires from each firm to minimize the risk of getting biased answers from only one manager. Findings The data were analyzed by the regression method, and the mediation and moderation tests were conducted to test the established hypotheses. The direct relationship between MCs and firm performance was examined through linear regression, and a significant relationship was found (ß = 0.408; t = 5.656; p < 0.001). Pricing (ß = 0.404; p < 0.001), marketing research (ß = 0.367; p < 0.001) and marketing strategy and implementation (ß = 0.336; p < 0.001) had the strongest association with firm performance. The mediating role of MC on the relationship between DC and firm performance was assessed, and the analysis result yielded a significant result (ß = 0.439; t = 6.174; p < 0.001). Finally, the moderating effect of ED on the direct relationship between MC and firm performance was assessed. Yet, the interaction term was insignificant (ß = 0.013; t = 0.103; p = 0.918) in predicting firm performance. Research limitations/implications Although the data set covers a broad range of firms operating in the Turkish automotive industry, the generalization of findings should only be possible through obtaining fresh evidence from other emerging markets that possess the similar market characteristics of Turkey. The cross-sectional nature of the study may offer insights only for a certain period of time; thus, additional longitudinal studies are recommended to see the dynamic changes on the constructs and relationships between them. Future studies may also include qualitative methods, i.e. interviews with top managers to have a deeper understanding on how DC–MC interaction creates better performance. Practical implications This study empirically shows the importance of MCs for firm performance; thus, managers should allocate significant efforts and resources for improving MCs. The demand for the electric and even autonomous vehicles is likely to increase in the following years, and this new era in the automotive industry requires more R&D and innovation-based products, i.e. green vehicles with low carbon footprint, the use of robotics and long-life batteries for electric vehicles. The cost-related pricing may no longer be a competitive advantage for the firms in emerging markets such as Turkish automotive industry; thus, more investment for disruptive technologies should be considered. Originality/value The results show that MCs of firms mediated the relationship between DCs and economic performance. Yet, ED did not play a moderating role on the relationships between MCs and performance. It is concluded that DCs were associated with improved firm performance via MCs. Furthermore, the insignificant impact of ED on the development of MCs leading to better performance was explained by firms’ given over-performing efforts in the context of emerging markets.

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Section: Contextmentioning

confidence: 99%

Dynamic and marketing capabilities as determinants of firm performance: evidence from automotive industry

Cataltepe¹,

Kamaşak

Bulutlar

et al. 2022

JABS

View full text Add to dashboard Cite

show abstract

“…Fleischman & Tyson (1998) also supported this statement and argued that standard costing no longer provides adequacy to managers in the establishment of corporate internal management strategy. The usefulness and reliability of the standard costing were questioned because they predicted that there will be many uncertainties, changes in structures, unstable fluctuations of the global economy, and inconsistency in modern company management (Badem, et al, 2013). The article by Bowhill & Lee (2002) argues that there are three main reasons that the standard costing method might not be useful today, the reasons such of lacking focus, accuracy, and relevance.…”

Section: Criticism Of Standard Costing and Variance Analysismentioning

confidence: 99%

The Relevance of Standard Costing and Variance Analysis in Global Industries Today

Hung

Shanmugam

2023

EAJMR

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Standard Costing and variance analysis are a set of management accounting tools that assist industries in controlling the cost of production. It involved the establishment of a cost standard that is required, and the standard cost was applied for comparison to the product’s actual cost. This article aimed to critically explore and assess the applicability of using standard costing and variance analysis as management accounting tools in today's varied worldwide industries. By compiling the findings from various scholars and researchers, this article primarily examines what standard costing methods and variance analysis are, as well as their advantages, limitations, and usefulness. Moreover, the proposed research framework on the motivation of industries in standard costing technique adoption and recommendations were added for future research purposes in this article. As a result, the article successfully concluded that standard costing techniques and variance analysis were relevant and crucial management accounting tools for industries today.

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“…Life cycle costing, also called ''whole life costing'' aims to identify the total cost associated with the ownership of an asset so that the decisions made at the initial acquisition have the effect of locking in certain costs in the future (Badem et al, 2013). Spickova and Myskova (2015) stated that the prominent objective of the life cycle costing approach is to optimize life cycle costs of the assets or investment project without compromising loss of their performance level.…”

Section: Life Cycle Costingmentioning

confidence: 99%

Strategic Management Accounting And Decision-Making In Small Medium Enterprises In Malaysia

Remali¹

2020

European Proceedings of Social and Behavioural Sciences

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Is Standard Costing Still Used? Evidence from Turkish Automotive Industry

Cited by 14 publications

References 8 publications

Dynamic and marketing capabilities as determinants of firm performance: evidence from automotive industry

Dynamic and marketing capabilities as determinants of firm performance: evidence from automotive industry

The Relevance of Standard Costing and Variance Analysis in Global Industries Today

Strategic Management Accounting And Decision-Making In Small Medium Enterprises In Malaysia

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