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Article
Publication date: 15 June 2012

Morten Jakobsen

The purpose of this study is to examine how the management accounting practice in an organisational unit affects the ability to conduct inter‐organisational control.

2603

Abstract

Purpose

The purpose of this study is to examine how the management accounting practice in an organisational unit affects the ability to conduct inter‐organisational control.

Design/methodology/approach

Governmentality is used as the main theoretical basis for the interpretation of empirical data. A qualitative case study is used to gather information from an electronics company.

Findings

The company enters its inter‐organisational relationships with the ambition of being in power in the relationship. To begin with, management accounting plays a central role in the negotiation process. Due to inadequate management accounting practices, the company is unable to include cost information in their response to proposals made by their suppliers during negotiations. Consequently, the cost aspect of the product fades away from negotiations as they progress.

Originality/value

The study concludes that an important part of management accounting practice is to reveal the intra‐organisational cost consequences of proposals made by suppliers during negotiation processes. These cost consequences are central during negotiation processes since they will keep the focus on costs and cost improvements during the negotiation process. The study indicates that accounting technologies and the physical presence of the management accountant are not sufficient to keep costs on the agenda. Constant cost consciousness requires that the management accountant actively takes part in the joint problem solving process.

Details

Qualitative Research in Accounting & Management, vol. 9 no. 2
Type: Research Article
ISSN: 1176-6093

Keywords

Article
Publication date: 23 March 2010

Morten Jakobsen

The literature on managing inter‐organisational relationships typically suggests managing these relationships based on the formalised exchange of information across the…

1569

Abstract

Purpose

The literature on managing inter‐organisational relationships typically suggests managing these relationships based on the formalised exchange of information across the organisational boundary with due respect to trust build‐up through successive interactions. The purpose of this paper is to argue that a focus on trust reduces the flexibility and accessibility of resources and hence ruins the advantages of inter‐organisational relationships. The paper focuses on power as a means for absorbing uncertainty when managing inter‐organisational relationships.

Design/methodology/approach

The paper is based on findings from a case study of inter‐organisational relationships. Governmentality is used as a framework for analysing the practise of managing inter‐organisational relationships.

Findings

A number of representations are employed along the boundary between the case study parties and thereby the boundary is emphasised. These representations are used to set the discourse for negotiating the terms of the cooperation. During negotiations a common understanding of cooperation is constructed and thereby fine‐grained information is assembled. In this specific case, the contract plays a central role as a representation of the project in focus. In the construction of the price for the product, open book and benchmark data are used. Information does not cross‐organisational boundaries at face value. Information is applied to the representations and brought into play during negotiations. Thereby managing and management accounting become significant components of the boundary between the parties.

Originality/value

The paper shows that power, as a means for absorbing uncertainty in inter‐organisational relationships, can solve the dilemmas regarding flexibility and access to resources that trust can cause.

Details

Journal of Accounting & Organizational Change, vol. 6 no. 1
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 13 April 2010

Petri Suomala, Tommi Lahikainen, Jouni Lyly‐Yrjänäinen and Jari Paranko

In spite of the increased research activity on inter‐organizational cost management (IOCM) and openbook accounting (OBA), detailed evidence on the application of these…

2698

Abstract

Purpose

In spite of the increased research activity on inter‐organizational cost management (IOCM) and openbook accounting (OBA), detailed evidence on the application of these tools in real‐life settings is still relatively sparse. Increased outsourcing and supplier responsibilities call for more thorough understanding on the possibilities and variations of supply chain cost management. As a research avenue, in‐depth case studies have been invited to elaborate the cost management interaction between companies. This paper aims to address these issues.

Design/methodology/approach

This paper is based on an interventionist research within two supply networks. By making research interventions on the development of cost management practices among the suppliers, the researchers have set the ground for implementation of OBA, which, then, has provided a box seat to observe the process of OBA and its associations with the different forms of control. Within these two networks, this paper focuses on two OBA episodes portraying different facets of openness in IOCM.

Findings

This paper presents OBA as an accounting template with a seemingly flexible character. By relying on the empirical study, the paper shows how OBA might be used for mitigating the component's price increasing pressures and, thus, controlling the costs of the end product in hybrids resembling very much market conditions. However, the very similar OBA procedures can be applied for achieving the long‐term goals of partnering in hybrids resembling to a great extent hierarchical structures. As the paper shows, the best corresponding control archetype for a given OBA application largely depends on the purpose defined for the IOCM activity by participating stakeholders.

Originality/value

Thus, far, there are no interventionist studies on OBA and, hence, the research setting provides an interesting new element to the extant literature on OBA and IOCM. However, the research method does not have intrinsic value. Thus, the contribution, and therefore also the originality, of this paper is based on new aspects provided to the theory on OBA.

Details

Qualitative Research in Accounting & Management, vol. 7 no. 1
Type: Research Article
ISSN: 1176-6093

Keywords

Article
Publication date: 10 August 2020

Andreas Taschner and Michel Charifzadeh

Despite growing interest in the intersection of supply chain management (SCM) and management accounting (MA) in the academic debate, there is a lack of understanding…

Abstract

Purpose

Despite growing interest in the intersection of supply chain management (SCM) and management accounting (MA) in the academic debate, there is a lack of understanding regarding both the content and the delimitation of this topic. As of today, no common conceptualization of supply chain management accounting (SCMA) exists. The purpose of this study is to provide an overview of the research foci of SCMA in the scholarly debate of the past two decades. Additionally, it analyzes whether and to what extent the academic discourse of MA in SCs has already found its way into both SCM and MA higher education, respectively.

Design/methodology/approach

A content analysis is conducted including 114 higher education textbooks written in English or in German language.

Findings

The study finds that SC-specific concepts of MA are seldom covered in current textbooks of both disciplines. The authors conclude that although there is an extensive body of scholarly research about SCMA concepts, there is a significant discrepancy with what is taught in higher education textbooks.

Practical implications

There is a large discrepancy between the extensive knowledge available in scholarly research and what we teach in both disciplines. This implies that graduates of both disciplines lack important knowledge and skills in controlling and accounting for SCs. To bring about the necessary change, MA and SCM in higher education must be more integrative.

Originality/value

To the best of the authors knowledge, this study is first of its kind comprising a large textbook sample in both English and German languages. It is the first substantiated assessment of the current state of integration between SCM and MA in higher education.

Details

Journal of Accounting & Organizational Change, vol. 16 no. 3
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 17 February 2012

Rajeev Kumra, Henrik Agndal and Ulf Nilsson

This paper seeks to explore how Indian buying firms practise an open book (OB) policy in supplier relationships in three industries, i.e. the vehicle industry, the…

1985

Abstract

Purpose

This paper seeks to explore how Indian buying firms practise an open book (OB) policy in supplier relationships in three industries, i.e. the vehicle industry, the construction industry and the information technology industry. It also aims to study determinants of open book practices.

Design/methodology/approach

Application of the OB policy is operationalised as the nature of open book practices, the extent and stage of data disclosed, the form of data disclosed, the direction of data disclosed, the attitude towards cost data disclosed, and the purpose and conditions of data disclosed. Determinants of the open book policy comprise characteristics of the exchange, the product, the buyer, the supplier and the supply market. Qualitative data were collected in the form of 22 interviews with representatives of three buying organisations and several of their suppliers in order to build three case studies.

Findings

The results suggest that the OB policy is used by buyers for diverse purposes ranging from strategic to operational, for example value engineering at the product development stage, to ensure supplier margins, for self improvements and cost reductions, and country entry decisions. Similarly, the data shared ranged from narrow to wide in scope and scale. Suppliers' attitudes ranged from fairly neutral to very negative towards open books. Power asymmetries, the number of alternative suppliers, product performance characteristics and value, incentives offered, and buyer efforts were found to influence OB practices.

Practical implications

Experiences gained from employing an OB policy in vehicle manufacturing suggests that firms in other industries can better leverage the use of open books for joint problem solving, equitable profit sharing and supplier selection.

Originality/value

The paper highlights that an OB policy can have broader applicability than recognised by many past studies and indicates that it can serve purposes of strategic decision‐making. It can also be an integrated part of a buyer's risk reduction strategy. Further, the study provides specific recommendations for Indian companies with regard to the application of an open book policy.

Details

Journal of Business & Industrial Marketing, vol. 27 no. 3
Type: Research Article
ISSN: 0885-8624

Keywords

Book part
Publication date: 19 June 2012

Jan O. Piontkowski, Andreas Hoffjan, Maik Lachmann and Lukas D. Schuchardt

Purpose – Interorganizational cost management among companies can lead to significant cost reductions. However, the determinants of the implementation and long-term use of…

Abstract

Purpose – Interorganizational cost management among companies can lead to significant cost reductions. However, the determinants of the implementation and long-term use of open book accounting as a tool in interorganizational cost management still remain unclear. We contribute to the academic literature by examining the influence of different determinants on the propensity to use open book accounting.

Design/methodology/approach – We conduct an experiment and use a covariance-based structural equation model to analyze the influence of the amount of the initially offered cost information, the offer of a relation-specific asset, and the relative power structure. The model introduced in this paper also integrates aspects of user acceptance that are derived from the Technology Acceptance Model.

Findings – The results demonstrate that both groups of variables have a significant effect on the willingness to use open book accounting. We also show that users of a management device are influenced in their choice by the perceived ease of use of the instrument; yet the extent to which open book accounting can help them achieve their goals (perceived usefulness) has an even stronger influence.

Research limitations/implications – Our findings contribute to a better understanding of the determinants that lead to the successful implementation of open book accounting as an interorganizational cost management tool, and help companies to avoid pitfalls during the implementation process.

Originality/value – This is the first study to analyze the simultaneous influence of different situational and attitudinal determinants on the propensity to engage in interorganizational cost information exchange.

Details

Performance Measurement and Management Control: Global Issues
Type: Book
ISBN: 978-1-78052-910-3

Article
Publication date: 18 April 2017

Daniel Ellström and Martin Hoshi Larsson

The purpose of this paper is to understand differences between open-book accounting (OBA) using static prices and OBA using dynamic prices. The authors identify how these…

Abstract

Purpose

The purpose of this paper is to understand differences between open-book accounting (OBA) using static prices and OBA using dynamic prices. The authors identify how these differences influence various aspects of customer–supplier relationships.

Design/methodology/approach

This paper is based on a case study involving a builders’ merchant and a wood manufacturer in the UK. The builders’ merchant under discussion has recently outsourced part of its production to the aforementioned wood manufacturer by using OBA with dynamic prices. For this case study, the authors have conducted interviews with multiple people from both parties in the agreement. Additional illustrative cases are provided through a study of other qualitative papers on OBA.

Findings

The authors find evidence supporting that, when dynamic prices are used in OBA, risk (unpredictability) is shifted from the supplier to the customer. Also, the customer frequently focuses on the supplier’s costs, both parties often aim for a long-term relationship and the customer becomes more dependent on the supplier, causing high interdependence. Furthermore, empirical evidence suggests that the customer finds price less important, and the reallocation of activities between the customer and supplier is easier in OBA setups in which dynamic prices are used.

Originality/value

This paper provides the first study of how differences between dynamic and static prices in OBA influence the customer–supplier relationship. This paper adds to the developing literature on OBA, in particular, as well as to literature on pricing, in general.

Details

Qualitative Research in Accounting & Management, vol. 14 no. 1
Type: Research Article
ISSN: 1176-6093

Keywords

Article
Publication date: 4 September 2017

Erik Hofmann and Jan Bosshard

The purpose of this paper is to summarize and analyze what is known regarding activity-based costing (ABC) applications in the context of supply chain management (SCM)…

7117

Abstract

Purpose

The purpose of this paper is to summarize and analyze what is known regarding activity-based costing (ABC) applications in the context of supply chain management (SCM). The authors present a reference framework for practical implications and areas for future research in intra-firm and inter-organizational environments.

Design/methodology/approach

The findings underlie a systematic review methodology. Research gaps and guidance for further publications are derived from the reference framework based on ABC and SCM literature.

Findings

The review illustrates four main areas for further research: determination of the role of management accounting in SCM (including supply chain finance), integration of time-driven ABC with radio frequency identification (RFID) technology and automatic data collection, analysis of inter-organizational management tools in supply chains in multiple negotiation rounds, and standardization of cost accounting data in supply chains.

Practical implications

The review provides practitioners with three main recommendations: ABC applications require a solid data basis, organizational readiness, commitment from senior management, and an ABC management philosophy; open book accounting for inter-organizational cost information-sharing purposes needs institutional arrangements and economic incentive systems; and sharing costs and benefits among supply chain members requires a change of managers’ mind-set.

Originality/value

This paper reveals practical implications and provides new directions for research based on the reference framework. The paper contributes to the interdisciplinary topic between SCM and management accounting by providing a structured overview of 87 peer-reviewed articles from 1992 to 2016.

Details

International Journal of Physical Distribution & Logistics Management, vol. 47 no. 8
Type: Research Article
ISSN: 0960-0035

Keywords

Article
Publication date: 15 January 2020

Bakil DhaifAllah, Sofiah Md-Auzair, Ruhanita Maelah and Md Daud Ismail

This paper aims to investigate the effect of product complexity and communication quality on inter-organizational cost management (IOCM) and open book accounting (OBA…

Abstract

Purpose

This paper aims to investigate the effect of product complexity and communication quality on inter-organizational cost management (IOCM) and open book accounting (OBA) practices in buyer–supplier relationships in Malaysian manufacturing firms.

Design/methodology/approach

A questionnaire survey was administrated to CFOs or accounting managers of Malaysian suppliers. Exploratory factor analysis and Structural Equation Modeling procedures were applied to test convergent and discriminant validity of the measurement model and examine the relationships among the latent constructs in the structural model.

Findings

The results suggest that IOCM and OBA scales show acceptable reliability and validity. The findings also report that both product complexity and communication quality have a positive effect on IOCM and OBA in buyer–supplier relationships. However, the results suggest that IOCM does not influence OBA practice.

Research limitations/implications

Although IOCM and OBA constructs exhibited satisfactory reliability and validity, future research is required to refine and further validate these constructs. The data were only collected from the supplier’s perspective. Thus, future research is invited to benefit from matched data from both suppliers and buyers to generate additional insights on IOCM and OBA.

Practical implications

This study may assist suppliers and buyers in relationships by suggesting that complex products require the adoption of IOCM and OBA practices to reduce information asymmetries and manage costs. Furthermore, emphasizing quality of communication may enhance the implementation of these practices.

Originality/value

Theoretically, this study contributes to the academic stream of management accounting and cost management as it enhances an understanding of contributions introduced in prior literature on IOCM and OBA. It uses a complementary approach of transaction cost theory (TCT) and social exchange theory (SET) to explain the research model. Methodologically, the study validated scales for measuring IOCM and OBA in a new environment.

Details

Journal of Accounting & Organizational Change, vol. 16 no. 1
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 23 March 2010

Juliana Meira, Nikos D. Kartalis, Mathew Tsamenyi and John Cullen

Inter‐firm relationships are increasingly being adopted as competitive tools. However, the challenges created by these relationships for the design and use of management…

3328

Abstract

Purpose

Inter‐firm relationships are increasingly being adopted as competitive tools. However, the challenges created by these relationships for the design and use of management control systems (MCS) have been well documented. The purpose of this paper is to provide a review of the literature on MCS and inter‐firm relationships. The review examines the types of relationships studied and the theoretical approaches.

Design/methodology/approach

The findings reported in the paper are based on desk research. The review is largely concentrated on the key international English language accounting journals.

Findings

Supply chain and outsourcing have been the dominant forms of inter‐firm relationships studied. Other studies have focused on joint ventures and networks. Transaction cost economics has been the dominant approach and trust has also featured as a theoretical issue in most of the studies.

Originality/value

The paper furthers the understanding of the contributions made by previous studies on MCS and inter‐firm relationships. Some suggestions for future research are offered at the end.

Details

Journal of Accounting & Organizational Change, vol. 6 no. 1
Type: Research Article
ISSN: 1832-5912

Keywords

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