Jan Bell

Symbolism, Collectivism and Rationality in Organisational Control

The results of a longitudinal field study (1967‐89) of International Foods, a holding corporation for a group of companies in Pakistan is presented. It focuses on the influence of societal culture on the development of accounting and control practices in the organisation. Four specific issues are examined: How do organisations initiate accounting and control systems? How do such systems evolve? What roles do they play in a crisis? How does organisational action become disconnected from such systems? National culture, particularly as it shapes the world views of individuals, greatly enhances our understanding of the dynamics of accounting and control systems in organisations. The local nature of rationality is demonstrated by showing how contextualising practices allow us to make sense of them.

Target Costing: Uncharted Research Territory

Abstract Target costing is a strategic weapon that is being increasingly adopted by a number of leading firms across the world. What first captured the attention of managers is the competitive advantage that target costing has given to the Japanese auto companies—the longest and most consistent users of target costing. Ironically, as Japan exported the technique to South Korea, a number of leading Korean firms such as Samsung and Hyundai have been gaining ground over their Japanese counterparts. In the US, Chrysler and Caterpillar attribute their financial turnarounds in the mid-1990s to the adoption of target costing. Despite a proven record of success, many managers often underestimate the power of target costing as a serious competitive tool. When general managers read the word “costing,” they naturally assume that it is a topic for their finance or accounting staff. They miss the fact that target costing is really a systematic profit planning process. Rather than the inward orientation of traditional cost methods, target costing is externally focused taking its cue from the market and customers. It is market-driven costing that develops new products that meet customer price and quality requirements as opposed to cost-driven development of products that are then pushed on to customers in the hope that they will buy the products. This chapter provides a review and analysis of the target costing literature produced in the last decade. It includes more than 80 major publications written in English and more than 100 publications written in Japanese. The review builds on a comprehensive bibliography of both the English and Japanese literature contained in Ansari et al. (1997). The history of Japanese target costing efforts is discussed in a separate chapter of this handbook. 1 To organize the literature and make sense of it for the novice reader, we use the life cycle of management practice as a framework. The framework equates the maturity of knowledge in a practice-based discipline with the various stages in the life of that practice. The discipline maturity framework is used to synthesize and organize the literature as well as develop areas for future academic research on target costing. For organization and synthesis, we populated a database with target costing literature coded by five stages of our knowledge progression or life cycle approach. In addition, we also coded the database on three additional taxonomic dimensions: intended audience, nature of study, and research method used. We used the knowledge progression framework to identify gaps in existing knowledge and new research topics in the area of target costing. We use the taxonomic approach to identify areas that can benefit from replication, corroboration, and further testing.

Five easy pieces: a case study of cost management as organizational change

Purpose – The primary purpose of this paper is to merge two traditions in management accounting change – design theory and action research – to explain findings from a case study of introducing a cost leadership initiative.Design/methodology/approach – This paper is an example of action research in which design theory explains events related to the implementation of a strategic cost leadership initiative at Shell Gabon, a Royal Dutch Shell unit in West Africa.Findings – The evidence shows that technical accounting changes are, in the final analysis, change management exercises. Implementing change requires thinking as a designer and employing the logic of conjecture rather than scientific deductive or inductive reasoning. Successful implementation requires conjuring an image of a future reality that does not currently exist and making that image persuasive by connecting it with the values of the organizational participants.Research limitations/implications – This case study provides five key lessons for f...

Accounting's role in promoting social change: a guest editorial

Purpose – The purpose of this article is to present a snapshot review of the papers accepted for publication in this special issue of the 2010 Global Accounting and Organizational Change (GAOC) conference which was held in July, 2010 at Babson College, USA.Design/methodology/approach – A critical review approach was adopted to identify the lessons learned.Findings – The review reveals a variety of themes that emerged from the papers under review where authors attempted to describe and explain “best practices” in financial and managerial accounting within a variety of organizations across the world.Originality/value – This review will stimulate interest in and contribute to the body of knowledge of accounting and organizational change for the betterment of society.

Target Costing Practices in the United States

Dr. Dan Swenson is an associate professor in accounting at Arizona State University – West Campus. While many Japanese companies have been using target costing as a strategic weapon for more than 30 years, only a small number of U.S. companies have been using target costing for any length of time. Hence, target costing is a relatively new and largely undocumented technique in the U.S. During the last decade, however, U.S. companies are increasingly interested in learning more about this powerful tool for managing costs in highly competitive market environments. The following article shows the results of the first broad empirical study on target costing practices in the United States. It also highlight the findings of several indepth case studies with successful target costing adopters.

GAOC 2008 conference issue: accounting's role in organizational change

Purpose – The purpose of this paper is to introduce and review papers incorporated into this special issue of the first biennial conference of the Global Accounting and Organisational Change.Design/methodology/approach – A textual analytical approach is adopted to review the selected papers.Findings – A variety of themes emerge from the subject papers, including institutionalisation of organizational and accounting processes, top management and employee support for effective change processes, employee resistance to change, determinants of change, and economies of scale.Practical implications – Findings reported in this special issue will provide organizational practitioners with better understandings of the effectiveness of the change process.Originality/value – Findings reported here will enhance the theoretical understandings of the adoption and successful implementation of organizational innovations including accounting.

Deploying Sustainability at Solea

Solea, a multinational food and facilities management company, announced a global sustainability initiative. Within Solea, sustainability meant considering the environmental and social impacts of operations along with profitability. This case focuses on how the implementation of the sustainability initiative created organizational conflict between the sustainability group and the supply management group. Most of the disagreement arose from supply management strategies, designed to increase immediate profits, which conflicted with sustainability strategies, aimed to yield longer term impacts. Even with upper management supporting sustainability, the case demonstrates how complicated it is to implement sustainability when actions get in the way of immediate profits and financial data is missing. Students understand the need to explicitly link (map) the new strategy to financial performance metrics, to specify when and how the benefits of a new strategy should impact profitability, and to monitor lead and lag performance measures.