Inter-organizational Cost Management Research Articles

Techniques of interorganizational cost management: A review essay

Cost management involves initiating and making decisions which will improve the cost effectiveness of an organization. This paper reviews the interorganizational cost management practices. In a dyadic relationship, two collaborating firms emphasize on intensive and long-term relationships. In a network relationship, the coordinating principles facilitate cooperation among members in the network. A dynamic learning capability that creates competitive advantage needs to be extended beyond firm boundaries. A number of inter-organizational cost management techniques such as target costing, open book accounting, value chain analysis, information sharing etc. are greatly focused in different studies. Reviewed papers within the literature have a mixture of theoretical models, such as transaction cost economics, resource-based view, agency theory, actor network theory, contingency theory, industrial network approach, and structuration theory.

Effect of internal cost management, information systems integration, and absorptive capacity on inter-organizational cost management in supply chains

Inter-organizational cost management is a strategic cost management approach to managing costs that span organizational boundaries in supply chains. Drawing on the resource-based view of the firm, we develop a model to predict which inter-related resources might enable companies to manage inter-organizational costs. We test this model using a survey of managerial accountants whose organizations are part of a supply chain. Using structural equation modeling, we conclude that the resources of internal electronic integration, external electronic integration, internal cost management, and absorptive capacity play significant direct and indirect roles in the development of an inter-organizational cost management (IOCM) resource. We find that these resources are inter-related and together are useful in enabling companies to ultimately benefit from managing inter-organizational costs. We find in particular the importance of relational resources associated with absorptive capacity in the development of an IOCM resource. Our research contributes to theory and practice by explaining how specific resources can be combined in allowing companies to better manage inter-organizational costs.

Research on the Composition and Management Strategy of Enterprise Logistics Cost in Supply Chains

Taking the combination of the theory of the modern cost management and supply chains management as the key point and taking the whole supply chains as the target in the study, this thesis analyzes composition of logistics cost and further puts forward the means of optimizing enterprise logistics cost management such as inter-organizational cost management, unified cost accounting, target cost management measure, and integrated cost control.

Interorganizational Cost Management in Supply Chains: A Review and Agenda for Future Research

Interorganizational Cost Management in Supply Chains: A Review and Agenda for Future Research

Research on the Composition and Management Strategy of Enterprise Logistics Cost in Supply Chains

Taking the combination of the theory of the modern cost management and supply chains management as the key point and taking the whole supply chains as the target in the study, this thesis analyzes composition of logistics cost and further puts forward the means of optimizing enterprise logistics cost management such as inter-organizational cost management, unified cost accounting, target cost management measure, and integrated cost control.

The effect of relational factors on open-book accounting and inter-organizational cost management in buyer–supplier partnerships

Open-book accounting (OBA) – the systematic disclosure and discussion of cost data between partner firms – is indispensable for revealing additional cost reduction opportunities that become feasible through the joint efforts of different organizations within supplier–buyer partnerships (inter-organizational cost management). However, evidence from previous case studies indicates that the adoption of OBA and inter-organizational cost management (IOCM) depends on the relational context. This study hypothesizes that the relational factors trust and commitment influence the implementation of OBA and IOCM. The results of a structural equation model used to evaluate data from 147 automotive suppliers partly support this hypothesis. While supplier's commitment promotes cost data disclosure, the buyer's commitment is a key enabler for the inter-organizational cost management.

Open book accounting in practice – exploring the faces of openness

PurposeIn spite of the increased research activity on inter‐organizational cost management (IOCM) and open‐book accounting (OBA), detailed evidence on the application of these tools in real‐life settings is still relatively sparse. Increased outsourcing and supplier responsibilities call for more thorough understanding on the possibilities and variations of supply chain cost management. As a research avenue, in‐depth case studies have been invited to elaborate the cost management interaction between companies. This paper aims to address these issues.Design/methodology/approachThis paper is based on an interventionist research within two supply networks. By making research interventions on the development of cost management practices among the suppliers, the researchers have set the ground for implementation of OBA, which, then, has provided a box seat to observe the process of OBA and its associations with the different forms of control. Within these two networks, this paper focuses on two OBA episodes portraying different facets of openness in IOCM.FindingsThis paper presents OBA as an accounting template with a seemingly flexible character. By relying on the empirical study, the paper shows how OBA might be used for mitigating the component's price increasing pressures and, thus, controlling the costs of the end product in hybrids resembling very much market conditions. However, the very similar OBA procedures can be applied for achieving the long‐term goals of partnering in hybrids resembling to a great extent hierarchical structures. As the paper shows, the best corresponding control archetype for a given OBA application largely depends on the purpose defined for the IOCM activity by participating stakeholders.Originality/valueThus, far, there are no interventionist studies on OBA and, hence, the research setting provides an interesting new element to the extant literature on OBA and IOCM. However, the research method does not have intrinsic value. Thus, the contribution, and therefore also the originality, of this paper is based on new aspects provided to the theory on OBA.

Interorganizational cost management in the exchange process

This paper explores interorganizational cost management (IOCM) practices in the exchange process. IOCM can be defined as buyers’ and suppliers’ coordinated efforts to reduce costs. Past research has primarily argued that such practices depend on component characteristics, relationship characteristics, and characteristics of the transaction. Based on a study of three buyer–supplier relationships, this article also finds variations in IOCM practices between six main activities in the exchange process. In this process, the supplier's management accounting is found to be more important than recognized by prior research. The deepest collaboration around IOCM issues and the greatest joint use of suppliers’ management accounting in the three cases typically occurs in earlier activities in the exchange process, including supplier selection, joint product design and joint manufacturing process development. In later activities in the process, during full-speed production as well as in product and manufacturing process redesign, suppliers’ managerial accounting plays a lesser role in our study.

Developments Around the Activity-Based Costing Method: A State-of-the Art Literature Review

This paper analyzes the management accounting applications which try to improve the Activity-based Costing method. In the first part, we describe them using the Strategic Management Accounting stream. Then, we present the main features of these applications. In the second part, we examine in detail two of these features: The widening of the analysis perimeter and the relevant level of details to analyze the costs. Finally, we analyze several proposals: Customer-driven ABC, Inter-organizational Cost Management, Resource Consumption Accounting and Time-driven ABC.

The Effect of Internal Cost Management, Information Systems Integration, and Absorptive Capacity on Interorganizational Cost Management: A Pilot Study

The Effect of Internal Cost Management, Information Systems Integration, and Absorptive Capacity on Interorganizational Cost Management: A Pilot Study

Interorganizational Cost Management: The Effects of Strategic and IT Integration on the Perceived Value of Supply Chain Partner

Interorganizational Cost Management: The Effects of Strategic and IT Integration on the Perceived Value of Supply Chain Partner

Kostenmanagement in der deutschen Unternehmenspraxis

Cost management practice has changed over time. New tools such as target costing and activity-based costing have been developed and the focus of cost management activities has been enlarged from individual departments to business processes as well as from a single company towards the entire supply chain. This paper analyses current cost management practice in large German companies based on a cross-sector field study. The results indicate that the design of cost management systems largely depends on the industry, competitive strategy, intensity of competition and environmental dynamics. The new cost management tools have been implemented in many companies, however, the type and intensity of use differs a lot. Interorganizational cost management is limited primarily to the manufacturing industry and is mainly focused on upstream partners in the supply chain. The empirical findings finally suggest that detailed cost analyses, inter-firm cost management and the integrated use of cost management tools can improve the effectiveness of cost management.

Interorganizational cost management and relational context

Many firms today form alliances with their suppliers and customers that do not fit into the classical dichotomy of hierarchies and markets. The emergence of so-called hybrid relational forms makes the make-or-buy decision more complicated than the neo-classical economic perspective indicates. One outcome of these hybrid relational forms appears to be the development of cost management techniques that cross the organizational boundary between buyers and suppliers and whose objective is to reduce costs through collaborative efforts. This paper explores how firms enact interorganizational cost management during product design and the characteristics of the relational contexts associated with them. It also discusses the implications of such developments for the make-or-buy decision.

How to undertake effective interorganizational cost management in product development

How to undertake effective interorganizational cost management in product development

Inter-organizational cost management systems: The case of the Tokyo-Yokohama-Kamakura supplier chain

Japanese firms are opting to blur their organizational boundaries in many ways. Approaches adopted include sharing research and development projects, placing their employees in other firms, and the development of inter-organizational cost management systems. Blurring organizational boundaries improves the efficiency of the entire value chain from raw material to customer. Organizational blurring typically occurs when information that is critical to one firm is possessed by another firm either further up or down the value chain. The two or more firms then create relationships that share organizational resources including information. The sharing of resources improves both inter and intra organizational coordination. A field study analyzing the cost management practices of three Japanese firms in the same supplier chain identified the development of inter-organizational cost management systems. These systems are designed to create downward cost pressures on the entire supplier chain. This pressure is achieved through several different mechanisms including target costing systems, minimum cost investigations, and quality-price-functionality tradeoffs. These mechanisms relieve sales of the responsibility for pressuring manufacturing on cost and allows them to focus on other areas of coordination between the functions. The objective of these inter-organizational systems is to identify innovative ways to reduce the cost of the products supplied by the chain. In theory, these mechanisms should result in lower cost products by allowing all of the firms in the chain to share information. This sharing leads to better solutions to the cost reduction problem. By designing products jointly, the firms can try to reach a global minimum cost instead of a series of local minimum costs.