A comparative study of the adoption and implementation of target costing in the UK, Australia and New Zealand (original) (raw)
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Advanced management accounting techniques have been seen by IFAC’s (1998) evolution framework as a shift towards value creation and providing timely and relevant information needed for decision making. The adoption of advanced management accounting techniques, such as Target Costing (TC), requires organizations to be able to deal with challenges and problems that may occur during the adoption process. In today’s competitive environment, many companies are continuously seeking to produce high quality and functional products based on customers’ expectations gleaned from market research. In meeting these objectives, TC has been widely adopted under the original leadership of Japanese TC since the 1960s. Hence, this paper aims to review the literature investigating the TC practices in non-Japanese contexts. The study focuses on the TC concept and its application in ten countries. The information is based on 35 articles which were written in English, translated, and published in various ...
Asia-Pacific Management Accounting Journal, 2019
The paper aims to examine the level of the adoption of the target costing (TC) system by Saudi manufacturing companies and its relationships with competition intensity, intended strategy and firm size. The paper used a questionnaire survey to measure the adoption of TC and the effect of competition intensity and intended strategy on this adoption. Descriptive statistic and regression analysis were preformed to analyse the data and obtain the results. This study found that Saudi manufacturing companies were interested to adopt the TC system. In addition, it found that the competition intensity positively affects TC adoption. Moreover, the study found that companies that used a differentiation strategy were more inclined to adopt the TC than those that used a cost leadership strategy. Finally, it found that large manufacturing companies tend to adopt TC more than small ones. This is among the pioneer studies to study the TC system in Saudi Arabia, introducing a new area of investigation. Moreover, the study contributes to managerial accounting research in developing economies by providing new insights into the underexplored Saudi Arabia market. The findings of this paper could elucidate the importance of adoption of TC as a technique with a potential to support the economic growth of the country.
Asia-Pacific Management Accounting Journal, 2019
The paper aims to examine the level of the adoption of the target costing (TC) system by Saudi manufacturing companies and its relationships with competition intensity, intended strategy and firm size. The paper used a questionnaire survey to measure the adoption of TC and the effect of competition intensity and intended strategy on this adoption. Descriptive statistic and regression analysis were preformed to analyse the data and obtain the results. This study found that Saudi manufacturing companies were interested to adopt the TC system. In addition, it found that the competition intensity positively affects TC adoption. Moreover, the study found that companies that used a differentiation strategy were more inclined to adopt the TC than those that used a cost leadership strategy. Finally, it found that large manufacturing companies tend to adopt TC more than small ones. This is among the pioneer studies to study the TC system in Saudi Arabia, introducing a new area of investigati...
Aspects of Obstacles for Applying Target Costing: A Survey of Manufacturing Firms in Egypt
2014
The present investigation aims to determine the aspects of obstacles for applying Target Costing(TC) system in Egyptian case and the significant differences among effects of these obstacles. The study used the survey method to describe and analyze the obstacles in some Egyptian firms. The population of the study is Egyptian manufacturing firms. Accordingly, the number of received questionnaires was 388 (21 Egyptian manufacturing firms) in 2013. Finally, the study found that there is a significant divergence among obstacles for applying Target Costing (TC) system in Egyptian manufacturing firms (Internal and external).The external dimensions are the most influence of internal dimensions, where the weakness of the competition is the highest effect in the external dimensions case but resistance top management is the highest effect in external dimensions case.
The Extent of Using the Target Costing Technique by Jordanian Industrial Shareholding Companies
European Journal of Business and Management, 2016
The current research aims at examining whether or not the Jordanian Industrial Public Corporations use the target costing technique. For this purpose the researchers distributed around 70 questionnaires, while just 52 questionnaires of them are examined. Each questionnaire encompasses 16 questions, whereas 8 of these questions are addressed to all companies; while the remaining questions are addressed to the companies those are used the target costing system. The results reveal that 35% of companies use the target costing system, whether partly 27% or totally 8% and 65% of companies don’t use this system. The study concludes that the major reasons behind not using the target costing system; are due to the lack of target costing knowledge and the management supporting is not enough in additional to the old habits in calculating value. The study recommends Jordanian companies to use the target costing, as it is deemed as an essential part of the management of total cost. Keywords: Tar...
The impact of target costing on the competitiveness and financial security of enterprises
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The main goal of companies operating on the market is the desire to achieve success. The feelings and criteria for assessing the company's success are varied. For employees, success means a high level of remuneration, additional non-wage benefits, job security and a good atmosphere at the workplace. Management measures success with financial results, product quality, market share, customer satisfaction, innovation, production efficiency, manufacturing costs, and the company's image.In the literature on the subject, the basic measure of the company's success is achieving a competitive advantage, gaining a relatively large market share, which will ensure financial security allowing for further development.Financial security depends largely on the extent to which management knowledge is known and understood, what are the financial skills and behavior of the management staff, the use of which contributes to the effective management of the company's resources.In the curre...
COST MEASUREMENT AND COST MANAGEMENT IN TARGET COSTING
Firms are coping with a competitive scenario characterized by quick changes produced by internationalization, concentration, restructuring, technological innovation processes and financial market crisis. On the one hand market enlargement have increased the number and the segmentation of customers and have raised the number of competitors, on the other hand technological innovation has reduced product life cycle. So firms have to adjust their management models to this scenario, pursuing customer satisfaction and respecting cost constraints. In a context where price is a variable fixed by the market, firms have to switch from the cost measurement logic to the cost management one, adopting target costing methodology. The target costing process is a price driven, customer oriented profit planning and cost management system. It works, in a cross functional way, from the design stage throughout all the product life cycle and it involves the entire value chain. The process implementation ...
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The issue of cost calculation has been largely debated in the last years under the pressure of the perceived lost of relevance of the so called" traditional cost accounting approaches". The enthusiasm for new management accounting techniques has often driven most of attention towards technical or theoretical aspects of the proposed new cost models. In particular, Activity-Based Costing (ABC) implementation literature pinpoints a large number of studies that have looked at technical and organizational/behavioral factors that ...