Yvonne P. Shanahan

Target costing in New Zealand manufacturing firms

Purpose – As there is scant research outside Japan on the implementation of target costing, the purpose of this research is to examine target costing practices in New Zealand.Design/methodology/approach – A mail questionnaire survey was sent to 80 New Zealand manufacturers, with a response rate of 31 (39 per cent).Findings – A total of 12 of the 31 respondents use target costing. Findings on the use of target costing that contrast with or add to prior studies include the following: target costing is being applied to existing products; the manufacturing department is highly involved in target costing; the involvement of suppliers in target costing is relatively low; considerable adjustments are made to the calculated allowable costs, especially in order to assist sales of future products and to ensure the achievement of target costs; and higher achievement of target costs is associated with higher firm performance. The goals of target costing and the departments involved in the practice were similar to tho...

The Balanced Scorecard: A New Zealand Perspective

The Balanced Scorecard (BSC), first introduced by Kaplan and Norton in 1992, is described as a comprehensive performance measurement system as well as a strategic management tool. Over the past decade, the BSC has attracted increasing attention in mainstream management accounting research. A review of the literature identifies five main areas of criticism relating to the BSC. Using particularly Norreklit’s (2000, 2003) criticisms of the BSC’s assumptions, this research gained views (using both a pilot and follow up survey of New Zealand companies) on the number and titles of perspectives in the BSC; the existence and understanding of cause‐and‐effect relationships; whether or not the BSC was perceived as a strategic control model; the number of performance measures and perceptions of the ability to judge performance based on those measures; and the credibility and effectiveness of the BSC as a management solution. The findings show that the BSC is not used extensively by the firms studied but those that do use it take full advantage of the BSC’s flexibility, using broader perspective names, as needed, to incorporate the desired aspects of organisational performance. There appears to be no concern over whether the cause‐and‐effect relationships meet a set of academic criteria relating to empirical verification and logical independence. However, Norreklit’s (2000) criticism that the BSC fails to increase strategy awareness finds some support. The findings also contradict the suggestion that the BSC necessitates an excessive number of performance measures which could be detrimental to managerial performance evaluation. Finally, the criticism that the BSC is merely a trend, popularised by management consulting firms, is also not supported.

The Use and Perceived Merit of Customer Accounting in New Zealand

As Lindsay (1994, 1995) encourages validation of existing results, this research replicates Guilding and McManus (2002) in a New Zealand (NZ) context. The usage and perceived merit of customer accounting practices were lower in NZ than in the Australian study. Few of the regressions where customer accounting usage and perceived merit were dependent variables revealed a statistically significant role for competition intensity and market orientation. There was some minor support for the perceived merit of customer accounting being higher in companies experiencing medium levels of competition intensity.

Ernest Adams Ltd: the demise of a family business:

This article tells of the changes experienced by a family business, through restructuring under outside professional management, until being taken over by a multinational company. Evidence was collected from interviews, annual reports and media articles. As a family business, the company exploited lower agency costs and sustained its profitability. Debt levels remained low. Under external professional managers, profitability declined and debt levels rose sharply. Informal communication networks were no longer utilized, and the professional managers were subject to criticism for excessive spending, inappropriate skills and a lack of industry knowledge. The board of directors began to function less effectively. Poor performance led to restructuring under three different CEOs, yet costs continually increased, profitability declined, and a takeover bid was successful. However, all responsibility, of course, cannot be placed on the new professional managers, who inherited responsibility for some decisions made prior to their period of stewardship. Also the family did not adequately plan for successful transition to professional management.

The importance of innovative management practices as part of business success in a developing Nation: A case study of Communications Fiji Ltd

Abstract Communications Fiji Limited (CFL) is a profitable, high-profile, publicly owned media organisation originally set up in Fiji by William Parkinson in 1986. This company is a market leader and has expanded throughout the Pacific over the last decade to include radio stations in Papua New Guinea and the Solomon Islands. Much of the success of this small medium enterprise (SME) has been due to the innovative management practices employed and encouraged by Parkinson. Awareness of cultural differences, knowledge of indigenous traditions and viewpoints, and sensitivity to macro, societal, and internal influences, has allowed the company to successfully incorporate these sensibilities into everyday management philosophy. The CFL experience provides an example of functional and innovative management practices that may have utility for other SMEs in developing nations.