Miss
A case study of economic value added in target costing
I. Introduction
In recent years, as the current business environment has become more competitive, its tend to be much more important for managers to develop internally, externally and logically business strategies and use tools, theories to support their decision-making, planning and control. Therefore, in order to response these needs, Strategic Management Accounting (SMA) has drew attention from academic accountants. As mentioned in the 'Management Accounting Research ' (Margaret, Lynda, Gloria, 2012), some of the developments in strategies planning and control are Strategic Business Units (SBUs) a comprehensive set of performance measures designed to assist managers in implementing competitive strategies and monitoring performance with respect to them (Kaplan and Norton, 2000) and Balanced Scorecard mission and business strategy and therefore use to analyse performance from a strategic perspectives(Shank and Govindarajan 1993; Simons 2000). All of these talked above is the aim of this case study to contribute to both the management accounting and value based management literatures by analyzing how a muti-national company can integrate Economic Value Added (EVA) into a target costing system.
In this essay, I will firstly, review and discuss the main issues in the case study in relation to management control and accountable, in terms of target costing and management performance. Also by looking at the case study that the target costing process used for the test group of Electronics the German company, therefore, to get the general idea whether it is possible to combine other SMA techniques with target costing. Secondly, I will critically evaluate the role of accountants and accounting practices in managing contemporary organizations. In order to classify the responsibilities and roles for accountants and understand the use of accounting practices in managing organization. Finally, a theoretical
I. Introduction
In recent years, as the current business environment has become more competitive, its tend to be much more important for managers to develop internally, externally and logically business strategies and use tools, theories to support their decision-making, planning and control. Therefore, in order to response these needs, Strategic Management Accounting (SMA) has drew attention from academic accountants. As mentioned in the 'Management Accounting Research ' (Margaret, Lynda, Gloria, 2012), some of the developments in strategies planning and control are Strategic Business Units (SBUs) a comprehensive set of performance measures designed to assist managers in implementing competitive strategies and monitoring performance with respect to them (Kaplan and Norton, 2000) and Balanced Scorecard mission and business strategy and therefore use to analyse performance from a strategic perspectives(Shank and Govindarajan 1993; Simons 2000). All of these talked above is the aim of this case study to contribute to both the management accounting and value based management literatures by analyzing how a muti-national company can integrate Economic Value Added (EVA) into a target costing system.
In this essay, I will firstly, review and discuss the main issues in the case study in relation to management control and accountable, in terms of target costing and management performance. Also by looking at the case study that the target costing process used for the test group of Electronics the German company, therefore, to get the general idea whether it is possible to combine other SMA techniques with target costing. Secondly, I will critically evaluate the role of accountants and accounting practices in managing contemporary organizations. In order to classify the responsibilities and roles for accountants and understand the use of accounting practices in managing organization. Finally, a theoretical
Bibliography: Anthony, R. N. 1964. Framework for analysis. Management Services (March-April): 18-24. Reprinted in Rosen, L. S. 1974. Topics in Managerial Accounting, 2nd edition. McGraw-Hill Ryerson Limited: 31-42. Accounting tools, 2012, Target costing, [Online]. Available from: http://www.accountingtools.com/target-costing Becker, A., Saxl, A., 2007 Cooper, P., Dart, E. (2009) Changing in the Management Accountant’s Role: Drivers and Diversity, [online]. Available from: http://www.bath.ac.uk/management/research/pdf/2009-06.pdf, (accessed 4 Dec 2012) Dermer, J., 1977, Management planning and control system: Advanced concepts and cases, R. D. Irwin, Homewood, I11. Jones, T. C., Luther, R., 2006. Globalization and management accounting in Germany. In: Paper Presented at the 8th Interdisciplinary Perspectives on Accounting Conference, Cardiff, July 10-12, 2006. Kaplan, R. S., and D. P. Norton, 2000, The Strategy-focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, Harvard Business School Press, Boston, MA USA. Kaplan, R, S., and Cooper, R., 1998. Cost &effect: Using Integrated Cost Systems to Derive Profitability and Performance. Havard Business School Press, Boston. Margaret, W and Lynda, T & Gloria, C, G, F., 2012, Management Accounting Research, Electronics: A case study of economic value added in target costing, G Model YMARE-471. Shank, J. K., and V. Govindarajan, 1993, Strategic Cost Management: The New Tool for Competitive Advantage, The Free Press, New York, NY USA. Simons, R., 2000, erformance Measurement and Control Systems for Implementing Strategy: Text and Cases, Prentice Hall, Upper Saddle River, NJ USA.