How an industry standard may enhance the mediating capacity of calculations: Cost of ownership in the semiconductor industry

Abstract

Drawing on a field study of the semiconductor industry, we look at a standard for interorganizational management accounting—more specifically, for cost of ownership (COO) in the semiconductor industry. These COO calculations are inscriptions that make the costs of manufacturing processes and products of integrated circuit manufacturers visible to other organizations in the industry. COO calculations mediate between these organizations by guiding their R&D and capital equipment investment decisions. We consider how the standard that defines the method for calculating COO enhanced the mediating capacity of COO calculations. Drawing on Robson’s (1992) notions of mobility, stability, and combinability, we find that the standard provided a common understanding when COO calculations were exchanged and compared to targets. At the same time, the standard provided adaptability that was needed for COO calculations to be mediating instruments. Adaptability meant that companies could significantly modify calculations by inserting private data and adjusting the manufacturing setting and products. Further, companies could switch between default values of the standard and their own proprietary data, and they could use the standard to a greater or lesser extent by selectively applying different parts of the standard. The standard enabled different versions of COO calculations to coexist, which would be similar and commonly understood in exchanges but for internal use, different versions could be calculated and used.