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Despite arguments that traditional product costing and variance analysis operate contrary to the strategic goals of advanced manufacturing practices such as just in time (JIT), total quality management (TQM), and Six Sigma, little empirical evidence exists that cost accounting practices (CAP) are changing in the era of continuous improvement and waste reduction. This research supplies some of the first evidence of what CAP are employed to support the information needs of a world-class manufacturing environment. Using survey data obtained from executives of 121 U.S. manufacturing firms, the study examines the relationship between the use of JIT, TQM, and Six Sigma with various forms of traditional and non-traditional CAP. Analysis of variance tests (ANOVA) indicate that most traditional CAP continue to be used in all manufacturing environments, but a significant portion of world-class manufacturers supplement their internal management accounting system with non-traditional management accounting techniques.

Theeuwes and Adriaansen (1994), among others, have asserted that activity-based costing (ABC) is inappropriate for operational decision-making. In this article, ABC is modified to reflect separate flexible and committed cost driver rates for an activity. This enables the model to reflect the difference in the behavior of an activity’s flexible and committed costs needed for operational planning decisions. The modified ABC facilitates determining the resources required to produce the product mix developed from the firm’s strategic plan and the excess capacity that will result. The modifications made to ABC aid in determining an optimal product mix when the firm has excess capacity, while the traditional ABC may not. Equally important, it facilitates measuring the financial implications of the resource allocation decisions that comprise the firm’s operational plan. As the operational plan is implemented, operational control is used to ensure that it is performed in an efficient and effective manner. The modified ABC enables the firm’s managers to compute the different types of deviations that arise from using flexible and committed resources at the unit, batch, and product levels of the firm’s operations. This aids in understanding problematic aspects of the firm’s operations and identifying where management resources are needed to improve operational efficiency.

This study investigates the relationship between lean manufacturing practices, management accounting and performance measurement (MAC & PM) practices, organizational strategy, structure, and culture, and facility performance. We extended past research by examining the relationships between lean manufacturing, MAC & PM practices and performance in a broader organizational context. Our study was performed using survey data provided by managers and executives at 368 facilities that had contacted the Shingo Institute for information or that had entered a Shingo Prize competition. Consistent with past research we found a significant positive association between lean manufacturing practices and lean MAC & PM practices. We found that greater employee empowerment, use of process performance measures, and use of lean accounting practices were driven primarily by lean strategy and secondarily by the extent of lean manufacturing practices. We also found that changes in organization structure to support lean are driven primarily by lean strategy and secondarily by lean manufacturing practices. Change toward lean culture, on the other hand, is driven by the extent of lean manufacturing practices. Further, we found that emphasizing process performance measures does not reduce emphasis on results performance measures and emphasizing results performance measures leads to improved financial performance. Process and results measures are being used in tandem and value stream costing has not replaced traditional accounting. The results of our study provide important insights for managers of companies engaged in lean transformation and for academics who teach or research lean accounting.

Despite the many proposed benefits of activity-based costing (ABC), many managers oppose implementing it. One important reason for this resistance that has generally not been addressed in the literature is the effect of cost reallocations on managers’ evaluations and compensation. This study examines how the impact of installing an ABC system on managers’ bonuses affects their support for ABC implementation. Because ABC systems usually allocate costs in different proportions than traditional systems, some products may appear to be more profitable while others may appear less so. This, in turn, causes the business units responsible for the products to appear to be more or less profitable.

Based on prospect theory (Kahneman & Tversky (1979). Econometrica, 47, 263–291; Tversky & Kahneman (1992). Journal of Risk and Uncertainty, 5, 297–323), we predict that the negative effect on managers’ support for ABC in business units reporting less profit is greater than the positive effect on managers’ support in the more profitable units. The results of an experiment support this prediction. Since management support is critical to successful system implementation, this asymmetric effect has implications for cost management system changes.

The objective of the research, and paper, is to determine first whether or not the accounting abstraction appears to dominate the manager’s perceptions of the physical reality of the firm’s utilization of its physical assets, and second, whether changes in the accounting abstraction (e.g. the addition of Capacity cost management reports and measurements) lead to changes in how managers perceive, and use, their physical assets. Using a cognitive decision-making structure developed by Wagenaar et al. (1995), this study explores the interplay between the structure and nature of capacity reporting (the surface structure of the decision) and the subsequent analysis and choice of managers within the firm (the deep structure of the decision). A five-site field research methodology was used to gather data from companies across a multitude of industry contexts and situations. Results suggest that the nature of capacity measurement and reporting does shape manager’s perceptions of current and potential future performance (the cognitive surface structure), with major implications for the nature and type of decisions and trade-offs made (the deep structure). Specifically, managers appear to make decisions that are illogical when considered in light of the physical reality of their operations based on the representations of this reality (e.g. the capacity measures and reports). Analysis and interpretation of these results suggest that what accounting makes visible appears to drive decision-making and performance in organization.

This study examines the association between the use of a package of contemporary and a package of traditional management accounting practices with organizational change and organizational performance.

Data were collected based on a mail survey distributed to a sample of 740 public sector organizations.

The findings indicate that while the prevalence of traditional practices is still dominant, such practices were not associated with organizational change or performance. Rather, those organizations that use contemporary management accounting practices to a greater extent experienced greater change and stronger performance.

The findings suggest that contemporary management accounting practices can assist public sector practitioners in improving performance and promoting organizational change.

The study provides an empirical insight into the use and effectiveness of management accounting practices in the public sector. The study provides the first empirical analysis of the effect of using a package of management accounting practices in the public sector.

Organizational scholars increasingly appreciate the role of categories as bases of order or “cognitive infrastructures” in markets. Yet they construe categories as disciplinary devices. They understand category formation, implementation, and revision as the purview of professionals. And they tie those processes to notions of institutional development that sharply distinguish settled from unsettled or disordered eras. We challenge these conceptions through a historical study of how manufacturers, associations, and cost accountants broke from the disciplinary functions of accounting categories underlying mass production to create new categorical schemes devoted to learning, innovation, and improvement. Reformers reconfigured the uses of categories in markets, mobilizing classifications to spark reflection, experimentation, and improvement among firms by perturbing taken-for-granted assumptions. They also redesigned the practices of producing, implementing, and revising categories. Manufacturers themselves produced and routinely revised classifications through collective deliberation, while accountants served as their consultants, rather than autonomous authorities who monopolized category formation and implementation. In so doing, reformers forged foundations for upgrading markets and fostering competition based on innovation and improvement in a variety of industries. Based on these findings, we extend existing research beyond categorical imperatives to highlight how categories also serve as cognitive infrastructures for learning, discovery, and innovation in markets.

This chapter is devoted to the study of the standard control of the material costs of production as a factor of technical growth of an enterprise of manufacturing industries: ways of integration in a single information space of information that allows you to manage the cost and quality of products at all stages of the value creation; theoretical and methodological approaches to the implementation of control functions of material costs (technological waste and production losses) according to preestablished consumption rates in the value creation of an industrial enterprise, especially in a number of machine-building factories of Nizhny Novgorod industrial cluster; theoretical methods of synthesis and comparison data, structured description of characteristics of the object of study, system analysis, as well as empirical methods of observations and descriptions of the subject area. The necessity of further improvement of effectiveness and methodology of a control function of a standard cost accounting system in the aspect of maintaining the technical growth of an enterprise is substantiated. Current condition is analyzed, and ways of modernization of organizational, managerial, methodological, metrological, and competence types are proposed. Also, sets of conditions for implementation of standard control and procedures incorporated into instrumental information space are substantiated. It is proved that the application of standard accounting of material costs for production within the framework of a system of standard accounting effectively contributes to noticeable technical growth and meets modern criteria and parameters of an effective management. It is substantiated that conditions for the implementation of a standard control of material costs for the production of an industrial enterprise that contributes to technical growth are availability and comprehensiveness of organizational, managerial, methodological, and metrological types of security control of material resources in the production; compliance with technical standards for processing, warehousing, storage, transportation of material resources; and matching competencies of management personnel with their functions. It is expected to introduce a standard control of material costs within the framework of a standard accounting system in practices of machine-building enterprises, as a significant factor of technical growth. Scientific understanding of an essence of the standard control of material costs within the framework of a standard cost accounting system, justified and outlined by the author, ensures incorporation into practice of effective production management, contributes a noticeable technical growth of industrial enterprises of the processing industries; provides a significant improvement in a quality of accounting results in general.

The value of a cost-management initiative rests on its ability in producing new and/or more accurate cost information for decision making. As such, insights on antecedents and consequences of using different types of cost information in decision making are important in evaluating cost-management initiatives. Behavioral research paradigm offers researchers a framework to interpret relationships between uses of different types of cost information and individuals’ behaviors. This chapter presents a review of behavioral studies on cost information usage in decision making published in 1998–2007. Findings of the review shows that using different types of cost information in decision making have significant impacts on individuals’ behaviors and uses of cost information are likely to be moderated by various human, system, and market factors.