Search results

The paper provides an overview of research published in the innovation and operations management (IOM) literature on 15 methods for cost management in new product development, and it provides a comparison to an earlier review of the management accounting (MA) literature (Wouters & Morales, 2014).

This structured literature search covers papers published in 23 journals in IOM in the period 1990–2014.

The search yielded a sample of 208 unique papers with 275 results (one paper could refer to multiple cost management methods). The top 3 methods are modular design, component commonality, and product platforms, with 115 results (42%) together. In the MA literature, these three methods accounted for 29%, but target costing was the most researched cost management method by far (26%). Simulation is the most frequently used research method in the IOM literature, whereas this was averagely used in the MA literature; qualitative studies were the most frequently used research method in the MA literature, whereas this was averagely used in the IOM literature. We found a lot of papers presenting practical approaches or decision models as a further development of a particular cost management method, which is a clear difference from the MA literature.

This review focused on the same cost management methods, and future research could also consider other cost management methods which are likely to be more important in the IOM literature compared to the MA literature. Future research could also investigate innovative cost management practices in more detail through longitudinal case studies.

This review of research on methods for cost management published outside the MA literature provides an overview for MA researchers. It highlights key differences between both literatures in their research of the same cost management methods.

This chapter uses data from the World Bank’s Private Participation in Infrastructure project database, and hand-collected evidence on project performance, to examine how PPPs are applied to infrastructure development in Africa, and how well they have delivered expected benefits. It has two analytical parts: an investment trend analysis and a meta-analysis of project performance and explanatory factors. The analysis shows growth both in number and volume of PPP investments that is weaker than that observed in other developing regions, and more volatile. The performance of PPP contracts appears to be improving over time with an overall cancelation rate of 7% over the assessment period. Although PPPs have contributed to increasing infrastructure stock, they have not completely met their potential, especially with respect to increasing infrastructure access rates. The main determinants of performance include accuracy of costing and allocation of risks, consistency of macro policies with the objectives and functioning of PPPs, coherence of sector policies and plans and local capacity. Contract cancellations are mainly explained by the misalignment of outcomes with government objectives, in particular, access and investment objectives. These findings suggest that PPP application should be well planned to ensure coherence of a wide range of policies, readiness of institutions and capacity of public sector actors. This chapter contributes to closing information gaps on a relatively novel policy instrument, and provides useful evidence to support prudent policy making at the time of considerable growth in PPP application.

We study changes in age-specific diabetes-related mortality and annual health care utilization. We find that half of the estimated 16% increase of diabetic mortality falls within employable age groups. We estimate that disease combination-specific increase in case fatality has resulted in premature diabetic mortality costing $3.2 billion annually. The estimated annual direct cost of treating high-risk diabetics reaches $36 billion, of which Medicare and Other Federal Programs compensate 54%. Respiratory conditions among diabetics comprise the same proportion of high-risk diabetics as do the disease combinations including coronary heart diseases. Treating of general diabetic conditions has become more efficient as indicated by the estimated declines in per unit health care costs.

This study aims to reveal the perspectives of the management and senior accountants on the subject regarding the effects of climate change on the business world, within the framework of utilisation of tools like strategic cost management and strategic management. An electronic form was sent repeatedly to the e-mail addresses of public companies listed on the Borsa Istanbul (BIST), which were obtained from the Public Disclosure Platform (PDP), between June 2018 and June 2019. According to the data obtained from the survey of this study, it is not possible to comment that these tools are effectively utilised in Turkey. Besides, it is also early to say that top management is fully aware of the need to manage climate change. This study contributes to the literature by revealing the view of management accountants and finance experts in Turkey on climate change.

Risk evaluation and management methods are used to assess the reliability of a New Zealand inter-urban road network, which is subject to closures due to snow and ice, earthquakes, volcanic activity and road accidents. Using the probabilities and consequences of closures of various durations, the expected annual costs of closures are determined for each hazard. The benefit-cost ratios for various risk mitigation options are also identified. The importance of considering both the probabilities and consequences of closures is discussed.

It is found that a ‘high-frequency, low-consequence’ hazard (snow and ice) has the highest expected annual cost, and higher than for the ‘low-frequency, high-consequence’ hazards (earthquakes and volcanic activity). It is also found that not allowing for elasticity in the demand for travel (e.g. trips being cancelled or postponed because of road closures) leads to inaccurate estimates of the costs of closure.

It is concluded that it is important to allow for the behavioural responses of network users when estimating the costs of closures, and that more attention should be given to ‘high-frequency, low-consequence’ hazards, in order to maximise the economic benefits of expenditure on risk mitigation.

Allocating risk in public–private partnership (PPP) projects based on public–private parties’ risk management (RM) capabilities is a condition for success of these projects. In practice, however, risks are allocated to these parties beyond their respective RM capabilities. Too much risk is often assigned to the private or public party, resulting in poor RM and costly contract renegotiations and terminations. This chapter proposes a methodology based on fuzzy set theory (FST) in which decision makers (DMs) use linguistic variables to assess and calculate RM capability values of public–private parties for risk events and to arrive at risk allocation (RA) decisions. The proposed methodology is based on integrating RA decision criteria, the Delphi method and the fuzzy synthetic evaluation (FSE) technique. The application of FSE allows for the introduction of linguistic variables that express DMs’ evaluations of RM capabilities. This provides a means to deal with the problems of qualitative, multi-criteria analysis, subjectivity and uncertainty that characterise decision-making in the construction domain. The methodology is outlined and demonstrated based on empirical data collected through a three-round Delphi survey. The public–private parties’ RM capability values for land acquisition risk are calculated using the proposed methodology. The methodology is helpful for performing fuzzy-based analysis in PPP projects, even in the event of limited or no data. This chapter makes the contribution of presenting a RA decision-making methodology that is easy to understand and use in PPP contracting and that enables DMs to track calculations of RM capability values.

Hospitals worldwide are facing the same opportunities and threats: the demographics of an aging population; steady increases in chronic diseases and severe illnesses; and a steadily increasing demand for medical services with more intensive treatment for multi-morbid patients. Additionally, patients are becoming more demanding. They expect high quality medicine within a dignity-driven and painless healing environment.

The severe financial pressures that these developments entail oblige care providers to more and more cost-containment and to apply process reengineering, as well as continuous performance improvement measures, so as to achieve future financial sustainability. At the same time, regulators are calling for improved patient outcomes. Benchmarking and best practice management are successfully proven performance improvement tools for enabling hospitals to achieve a higher level of clinical output quality, enhanced patient satisfaction, and care delivery capability, while simultaneously containing and reducing costs.

This chapter aims to clarify what benchmarking is and what it is not. Furthermore, it is stated that benchmarking is a powerful managerial tool for improving decision-making processes that can contribute to the above-mentioned improvement measures in health care delivery. The benchmarking approach described in this chapter is oriented toward the philosophy of an input–output model and is explained based on practical international examples from different industries in various countries.

Benchmarking is not a project with a defined start and end point, but a continuous initiative of comparing key performance indicators, process structures, and best practices from best-in-class companies inside and outside industry.

Benchmarking is an ongoing process of measuring and searching for best-in-class performance:

• Measure yourself with yourself over time against key performance indicators

• Measure yourself against others

• Identify best practices

• Equal or exceed this best practice in your institution

• Focus on simple and effective ways to implement solutions

Measure yourself with yourself over time against key performance indicators

Measure yourself against others

Identify best practices

Equal or exceed this best practice in your institution

Focus on simple and effective ways to implement solutions

Comparing only figures, such as average length of stay, costs of procedures, infection rates, or out-of-stock rates, can lead easily to wrong conclusions and decision making with often-disastrous consequences. Just looking at figures and ratios is not the basis for detecting potential excellence. It is necessary to look beyond the numbers to understand how processes work and contribute to best-in-class results. Best practices from even quite different industries can enable hospitals to leapfrog results in patient orientation, clinical excellence, and cost-effectiveness.

Despite common benchmarking approaches, it is pointed out that a comparison without “looking behind the figures” (what it means to be familiar with the process structure, process dynamic and drivers, process institutions/rules and process-related incentive components) will be extremely limited referring to reliability and quality of findings.

In order to demonstrate transferability of benchmarking results between different industries practical examples from health care, automotive, and hotel service have been selected.

Additionally, it is depicted that international comparisons between hospitals providing medical services in different health care systems do have a great potential for achieving leapfrog results in medical quality, organization of service provision, effective work structures, purchasing and logistics processes, or management, etc.

After pioneering, but insular, work on the conceptualization and measurement of customer value in business markets undertaken in the 80s and 90s, interest in this topic is substantial since the beginning of this decade. Despite this recent interest, marketing scholars concur that value in business markets is still an under-researched subject. This contribution to the debate is threefold. The paper first proposes an own model of customer value conceptualization in business markets; based on several rounds of testing this theoretically grounded model in managerial practice indications exist to conclude that this model may offer benefits over current models.

Secondly, the paper provides a comprehensive survey of pricing approaches in industrial markets. The paper integrates this literature overview with own empirical findings. Concurrently the paper summarizes extant research on the link between pricing approach and profitability in industrial markets. The paper thirdly proposes a framework for value delivery and value-based pricing strategies in industrial markets. Proposing such a framework is both useful as well as necessary. Useful, since this framework guides new product development and pricing decisions and assists in the implementation of price-repositioning strategies for existing products; necessary, since the theoretical and practical adoption of value-based delivery and pricing strategies may have suffered from the lack of a unifying conceptual framework. Two case studies, one involving the pricing decision for a major product launch at a global chemical company, the other involving value delivery at an industrial equipment manufacturer, illustrate the practical applicability of the proposed framework.