Management accounting: this century and beyond

Has Management Accounting Research been critical?

“…Gietzman, 1990;Baird et al, 2004;Wiersma, 2009) but others expressed reservations. These included: unsubstantiated claims of a crisis (Holzer and Norreklit, 1991); alleged benefits of ABC, BSC and EVA being excessive (Bromwich and Walker, 1998;Stark and Thomas, 1998); ABC being dysfunctional (Malmi, 1997;Major and Hopper, 2005); ABC, BSC and EVA not being novel (Horngren, 1995;Staubus, 1990;Bourguignon et al, 2004) and sometimes technically inaccurate (Brignall et al, 1991;Mitchell, 1994;Abernathy et al, 2001); implementation problems (Innes and Mitchell, 1990), especially if they lack collective worker participation and appropriate leadership styles (Horzée and Bruggeman, 2010); waning practitioner interest and adoption (Christensen and Wagenhofer, 1997;Innes, 2000); applications deviating from recommended prescriptions (Kellett and Sweeting, 1991;Spechbacker et al, 2003); their interpretive flexibility to accommodate conflicts over their scope and purpose when practiced deviating from claims that they are objective and well-defined (Ax and Bjornenak, 2005). Ironically given assertions that such reforms could address Japanese competition, Japanese firms proved indifferent and preferred Just-in-time and Total Quality Management philosophies emphasising simple controls, forward strategic planning, target costing, and communicating goals and strategies to employees (Yoshikawa, 1994;Scarborough et al, 1991).…”

Activity-Based Costing: Helping Small and Medium-Sized Firms Achieve a Competitive Edge in the Global Marketplace

“…ABC was originally conceptualized as an effective costing method for manufacturers, but it has been used by numerous other industries, such as hospitals and related healthcare facilities [34][35][36], by the US Postal Service [37,38], the restaurant and hotel industry [39,40], the life insurance industry [41], universities [42,43], the accounting profession [44], the banking industry [45], the energy sector [46,47], and the food production industry [48]. Large companies like Chrysler [33] and United Parcel Service (UPS) have also benefited from using ABC, particularly in the area of supply chain management [49].…”

The uses of product costs in decision-making

“…This information can be used to identify, for example, whether loss making products should be discontinued. Product discontinuation decisions can be made directly using the product profitability analysis for companies selling up to three or four products (Drury et al 1993;Drury and Tayles, 1994, 1995, 2000. However, Cooper and Kaplan (1991) argue that it is not practicable to generate the different relevant costs to use directly in decisions relating to a large number of products because of the range of possible decisions, and the range of possible costs that should be applied in those decisions.…”

“…The application of information as a guide to economic decisions has been identified as one of the major functions of management accounting systems (Horngren, 1995).…”

“…In relation to the first issue, researchers have not considered whether products costs are used all the time in decision making or are used to a lesser extent or are never used in decision making. In relation to the second issue, prior theory indicates that a decision-relevant incremental/avoidable cost approach should be adopted in decision-making (Drury and Tayles, 1994, 1995, 2000. To identify these product costs, product costing information should be used as attention directing information, rather than being used directly in decision making.…”