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Article
Publication date: 17 November 2020

Renata Biadacz

The purpose of the study is to examine the research problem that represents an attempt to approximate the importance of quality costing in managing a modern enterprise…

Abstract

Purpose

The purpose of the study is to examine the research problem that represents an attempt to approximate the importance of quality costing in managing a modern enterprise using the selected enterprises from small and medium-sized enterprises (SMEs) in Poland.

Design/methodology/approach

The primary goal of the research is a need to acquire knowledge about the use of quality cost accounts in enterprises operating in Poland. The research has been conducted in the SMEs of production and services. From October 2018 to December 2018, survey-based research was carried out in the selected SMEs of production and service in Poland. The targeted participants of the study are from the medium-sized enterprises, employing 50–250 people.

Findings

The pilot studies conducted in companies indicate that modern enterprises are focused on quality. Many enterprises declare to be continuously improving quality system and quality costing. However, generally, these are large companies that have implemented ISO standards, often part of international corporations. The survey result of the study shows that medium-sized enterprises still make little use of modern cost accounting variants. Based on the study, only 9.75% (39 enterprises) from a representative group of 400 companies from the sectors of manufacturing, services and production as well as service companies apply quality costing. Some of the other enterprises are only taking measures to implement quality cost accounting.

Research limitations/implications

The research has been conducted in randomly selected SMEs in the form of a questionnaire interview. In order to further analyze the construction of quality cost management (QCM) systems and the use of information from QCM by enterprises, case study method should be used more widely.

Practical implications

The results of the study provide useful help for companies that are quality-oriented and want to implement quality costing. The survey has been conducted in 400 enterprises, and the survey results of considered SMEs reveal the most important aspects of the application of quality costing.

Originality/value

The questionnaire used, the answers provided and the resulting conclusions fill the identified research gap. In the author's opinion, findings of research are relevant and useful, not only for accounting practice but also for theory. They show that although TQM and quality costing have been very popular in the literature since the 1990s, the degree of application of quality costing in practice (except for large, often international companies) is too low. So, the suitability of QCM in managing a modern enterprise from the SMEs should be promoted.

Details

The TQM Journal, vol. 33 no. 7
Type: Research Article
ISSN: 1754-2731

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Article
Publication date: 1 January 2006

Steve Eldridge, Mohammed Balubaid and Kevin D. Barber

The purpose of this article is to examine the difficulties associated with quality costing and propose a solution based upon the use of knowledge management techniques.

Abstract

Purpose

The purpose of this article is to examine the difficulties associated with quality costing and propose a solution based upon the use of knowledge management techniques.

Design/methodology/approach

A widely available software tool is used to create a quality costing ontology based upon the prevention appraisal failure classification of quality costs. This ontology is used for the collection, processing, sharing and use of quality cost‐related knowledge. The ontology was evaluated using case study data and compared with conventional approaches to quality costing.

Findings

The quality costing ontology is easier and more efficient than conventional quality costing methods. It has greater capability in terms of the analysis and use of quality costing knowledge and overcomes the barriers to quality costing due to poor understanding and awareness.

Research limitations/implications

The quality costing ontology provides a platform for researchers to investigate quality cost behaviour within a well‐structured environment. The use of alternative classifications to prevention appraisal failure in the ontology need to be investigated further.

Practical implications

Traditionally, training and education have been used to rectify poor understanding and awareness of quality costs but with limited success. The quality cost ontology provides an alternative solution that uses knowledge management (KM) technology and is based on information systems.

Originality/value

The authors could find no research or published paper that has discussed the role of KM in quality costing.

Details

International Journal of Quality & Reliability Management, vol. 23 no. 1
Type: Research Article
ISSN: 0265-671X

Keywords

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Abstract

Details

Servitization Strategy and Managerial Control
Type: Book
ISBN: 978-1-78714-845-1

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Article
Publication date: 8 January 2018

Odysseas Moschidis, Evrikleia Chatzipetrou and George Tsiotras

The purpose of this paper is to explore how the sophistication of a quality costing system depends on the quality management maturity (QMM) level in Food and Beverage…

Abstract

Purpose

The purpose of this paper is to explore how the sophistication of a quality costing system depends on the quality management maturity (QMM) level in Food and Beverage (F&B) enterprises. Since no previous research has taken place in this area, the paper aims at analyzing the relationships between quality costing and the specific variables that define the various maturity stages.

Design/methodology/approach

A structured questionnaire was used to survey 457 F&B companies. This produced 104 usable responses (23 percent response rate). Multidimensional correspondence analysis (MCA) with hierarchical cluster analysis (HCA) were used to detect and represent underlying structures in the categorical data set and to detect possible clusters between variables.

Findings

The more mature a company’s QMM, the more emphasis they placed on appraisal quality costs and effective use of quality costs information. Prevention costs have no statistically significant connection with the level of maturity. A generalized “expensive” use of quality costing, with no focus on problematic areas and possible solutions, does not always lead to the resolution of problems.

Research limitations/implications

A complicated – and some think unfair – tax system, combined with limited cash liquidity constitutes an unstable environment for Greek companies, in which they have to survive and develop. This environment does not support quality costing, thus resulting in limited interest by company management in participating in the authors’ research. Furthermore, the Greek Uniform Chart of Accounts and the Greek Accounting Standards do not include specific quality-related accounts, making it difficult for companies to measure quality costs and for researchers to investigate the quality costing field.

Originality/value

It is the first time that QMM levels of Greek F&B companies have been reported. The research explores the characteristics that a quality costing system of Greek F&B organizations develop at the various maturity levels. The analysis uses an exploratory method – MCA – which can highlight intense correspondences of characteristics and clusters, which cannot be predicted in advance.

Details

International Journal of Productivity and Performance Management, vol. 67 no. 1
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 1 May 2002

B.G. Dale and G.M. Wan

The paper reports the main findings of an evaluation of four separate quality costing methods which have been trialed in an organisation manufacturing flavourings for the…

Abstract

The paper reports the main findings of an evaluation of four separate quality costing methods which have been trialed in an organisation manufacturing flavourings for the food and drink industry. It was found that the semi‐structured departmental method was the most suitable and a pilot study conducted in a production unit using this method identified 15 non‐conformance cost elements. Among the main findings is that the chosen quality costing method must suit a company’s situation, be based on the concept of continuous improvement, be applicable to all departments and employ a team approach. It is also pointed out that its success will be largely dependent on company culture and the discipline of staff to follow the agreed procedures.

Details

Business Process Management Journal, vol. 8 no. 2
Type: Research Article
ISSN: 1463-7154

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Article
Publication date: 1 July 2006

Andrea Schiffauerova and Vince Thomson

This paper aims to present a survey of published literature about various quality costing approaches and reports of their success in order to provide a better…

Abstract

Purpose

This paper aims to present a survey of published literature about various quality costing approaches and reports of their success in order to provide a better understanding of cost of quality (CoQ) methods.

Design/methodology/approach

The paper's approach is a literature review and discussion of the issues surrounding quality costing approaches.

Findings

Even though the literature review shows an interest by the academic community, a CoQ approach is not utilized in most quality management programs. The evidence presented shows that companies that do adopt CoQ methods are successful in reducing quality costs and improving quality for their customers. The survey shows that the method most commonly implemented is the classical prevention‐appraisal‐failure model; however, other quality cost models are used with success as well.

Originality/value

The paper shows that the selected CoQ model must suit the situation, the environment, the purpose and the needs of the company in order to have a chance to become a successful systematic tool in a quality management program.

Details

International Journal of Quality & Reliability Management, vol. 23 no. 6
Type: Research Article
ISSN: 0265-671X

Keywords

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Book part
Publication date: 23 September 2014

Marc Wouters and Susana Morales

To provide an overview of research published in the management accounting literature on methods for cost management in new product development, such as a target costing

Abstract

Purpose

To provide an overview of research published in the management accounting literature on methods for cost management in new product development, such as a target costing, life cycle costing, component commonality, and modular design.

Methodology/approach

The structured literature search covered papers about 15 different cost management methods published in 40 journals in the period 1990–2013.

Findings

The search yielded a sample of 113 different papers. Many contained information about more than one method, and this yielded 149 references to specific methods. The number of references varied strongly per cost management method and per journal. Target costing has received by far the most attention in the publications in our sample; modular design, component commonality, and life cycle costing were ranked second and joint third. Most references were published in Management Science; Management Accounting Research; and Accounting, Organizations and Society. The results were strongly influenced by Management Science and Decision Science, because cost management methods with an engineering background were published above average in these two journals (design for manufacturing, component commonality, modular design, and product platforms) while other topics were published below average in these two journals.

Research Limitations/Implications

The scope of this review is accounting research. Future work could review the research on cost management methods in new product development published outside accounting.

Originality/value

The paper centers on methods for cost management, which complements reviews that focused on theoretical constructs of management accounting information and its use.

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Article
Publication date: 1 May 1991

Barrie Dale

A summary, in bullet‐point format, of the main issues and queries that need to be addressed in the development of quality costing, based on research work carried out at…

Abstract

A summary, in bullet‐point format, of the main issues and queries that need to be addressed in the development of quality costing, based on research work carried out at the University of Manchester Institute of Science & Technology over the previous nine years. Examines the role of quality costing in TQM and the importance of definitions to the collection, analysis and use of quality costs, arguing that without clear definitions, there can be no common understanding or meaningful communication on the subject. Suggests quality costing strategies to collect the data. Looks at the issues involved in reporting quality costs, their use and the relationship of quality costing to accountancy.

Details

The TQM Magazine, vol. 3 no. 5
Type: Research Article
ISSN: 0954-478X

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Article
Publication date: 1 June 2000

S. Roden and B.G. Dale

Reports an examination of the management’s, staff’s and operators’ attitudes to and awareness of the concept of quality costing in the division of a small‐ to medium‐sized…

Abstract

Reports an examination of the management’s, staff’s and operators’ attitudes to and awareness of the concept of quality costing in the division of a small‐ to medium‐sized enterprise (SME) manufacturing precision components for the aerospace industry. Despite a previous but unsuccessful quality costing initiative, it was found that some confusion exists, at all levels of the organisational hierarchy, over the terms used in quality costing. With respect to the perception of the scale of quality costs in the company, senior management believed them to be higher than both line managers and operators, while operators viewed them to be lower than line managers. It is also pointed out that line managers and operators were likely to be more honest about their lack of knowledge than were management.

Details

The TQM Magazine, vol. 12 no. 3
Type: Research Article
ISSN: 0954-478X

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Article
Publication date: 2 August 2011

Robert Luther and Iaad Issa Sartawi

This paper aims to use empirical data to classify and contextualize the various practices of quality costing.

Abstract

Purpose

This paper aims to use empirical data to classify and contextualize the various practices of quality costing.

Design/methodology/approach

The paper uses 23 “best practices” of quality costing extracted from the literature to survey quality managers of 88 publicly listed Jordanian manufacturing firms. Exploratory factor analysis is then used to create an empirical taxonomic framework.

Findings

Factor analysis of the data identifies a six‐factor structure of the practices of quality costing (PQC). Inspection of the component items shows the factors to be conceptually meaningful with none of them containing conflicting items. All factors are reliable and valid and have statistically sound structures.

Research limitations/implications

The classification provided can help managers to better visualize, understand and implement the concept of quality costing. It provides a framework within which practices can be structured and evaluated; managers can identify areas in their firms that are missing and may warrant improvement. The findings should be treated cautiously: the operational definition of PQC derives from an inconsistent literature. Furthermore, the findings are based on self reported data, collected through a questionnaire in Jordan and there is potential source bias or general method variance.

Originality/value

This paper contributes to the body of knowledge through operationalizing the overall concept of quality costing by means of the PQC scale. The six factors identified represent latent constructs within PQC and the component items operationalize such constructs. Furthermore, the procedure provides an illustration of pragmatic application of exploratory factor analysis to empirical managerial data, which can be used in other contexts.

Details

International Journal of Quality & Reliability Management, vol. 28 no. 7
Type: Research Article
ISSN: 0265-671X

Keywords

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