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Title: Cost Accounting in German Multinational Companies

Cost Accounting in German Multinational Companies

An Empirical Analysis

by Alexander Schulz (Author)
©2018 Thesis XXVIII, 282 Pages
Law, Economics & Management
Series: Münsteraner Schriften zur Internationalen Unternehmensrechnung, Volume 16

Summary

Cost accounting traditions differ across countries, especially between Germany and the US/UK. Consequently, multinational companies often face cross-national differences in the design of their subunits’ cost accounting systems. To improve comparability and facilitate control, multinational companies seek to globally align these systems. In this respect, they have to balance the needs of the headquarters and the subunits. By the means of a mixed-method approach, this study analyses the design of cost accounting systems from both perspectives. It finds empirical evidence for cross-case and cross-country differences in the complexity and standardization of cost accounting systems in subunits of German multinational companies and identifies important determinants and success factors. The findings have implications for researchers and practitioners in the field of management accounting.

Table Of Contents

  • Cover
  • Title
  • Copyright
  • About the author
  • About the book
  • This eBook can be cited
  • Preface
  • Acknowledgement
  • Contents
  • Index of figures
  • Index of tables
  • Index of abbreviations
  • Index of symbols
  • 1 Introduction
  • 1.1 Motivation and research questions
  • 1.2 Outline of the study
  • 1.3 Scientific positioning
  • 2 Fundamentals on cost accounting in German MNCs
  • 2.1 Characterization of multinational companies
  • 2.2 Objectives of cost accounting
  • 2.3 Design of cost accounting systems
  • 2.3.1 Systematization and complexity of cost accounting
  • 2.3.2 Cost type accounting
  • 2.3.3 Cost center accounting
  • 2.3.4 Cost object accounting
  • 2.3.5 Summary
  • 2.4 Standardization of cost accounting systems
  • 2.4.1 Conceptualization
  • 2.4.1.1 Definition of cost accounting standardization
  • 2.4.1.2 Process of cost accounting standardization
  • 2.4.1.3 Degree of cost accounting standardization
  • 2.4.1.4 Summary
  • 2.4.2 Advantages and disadvantages of standardization
  • 2.4.2.1 Advantages of cost accounting standardization
  • 2.4.2.2 Disadvantages of cost accounting standardization
  • 2.4.2.3 Summary
  • 2.5 Performance of cost accounting systems
  • 3 State of research
  • 3.1 Design of cost accounting systems
  • 3.1.1 Case study research
  • 3.1.2 Survey research
  • 3.1.3 Mixed methods research
  • 3.2 Standardization of management accounting instruments
  • 3.2.1 Case study research
  • 3.2.3 Survey research
  • 3.3 Summary and implications
  • 4 Theory and hypotheses development
  • 4.1 Theoretical foundation
  • 4.1.1 Principal-agent theory
  • 4.1.2 Contingency theory
  • 4.2 Theoretical framework and basic hypotheses
  • 5 Research design
  • 5.1 Qualitative case study research
  • 5.2 Quantitative survey research
  • 5.3 Mixed methods approach
  • 5.4 Summary
  • 6 Qualitative analysis
  • 6.1 Case company selection and description
  • 6.1.1 Case selection criteria
  • 6.1.2 Description of cases
  • 6.2 Data collection and analysis
  • 6.2.1 Data collection
  • 6.2.2 Characteristics of interviews
  • 6.2.3 Qualitative content analysis
  • 6.3 Empirical results
  • 6.3.1 Context of cost accounting in German MNCs
  • 6.3.1.1 Multinational environment and philosophy
  • 6.3.1.2 Organizational structure and benchmarking
  • 6.3.1.3 ERP system and databases for cost accounting
  • 6.3.1.4 Role of accountants and cost accounting objectives
  • 6.3.1.5 Summary and discussion
  • 6.3.2 Design of cost accounting systems
  • 6.3.2.1 Systematization of cost accounting
  • 6.3.2.2 Cost type accounting
  • 6.3.2.3 Cost center accounting
  • 6.3.2.4 Cost object accounting
  • 6.3.2.5 Cost accounting complexity and national particularities
  • 6.3.2.6 Summary and discussion
  • 6.3.3 Standardization of cost accounting systems
  • 6.3.3.1 Comprehension and measurability of standardization
  • 6.3.3.2 Degree and process of standardization
  • 6.3.3.3 Advantages and disadvantages of standardization
  • 6.3.3.4 Implementation process and acceptance
  • 6.3.3.5 Summary and discussion
  • 6.4 Implications and hypotheses refinement
  • 6.4.1 Implications for the quantitative analysis
  • 6.4.2 Hypotheses refinement
  • 6.4.2.1 Internal context
  • 6.4.2.2 External context
  • 6.4.2.3 Group context
  • 6.4.2.4 Performance of cost accounting systems
  • 7 Quantitative analysis
  • 7.1 Sample selection, questionnaire and data collection
  • 7.1.1 Sampling of subunits
  • 7.1.2 Outline of the questionnaire
  • 7.1.3 Data collection and response rates
  • 7.2 Construct measurement
  • 7.2.1 Formative measurement
  • 7.2.2 Operationalization of constructs
  • 7.2.2.1 Cost accounting complexity
  • 7.2.2.2 Cost accounting standardization
  • 7.2.2.3 Cost accounting performance
  • 7.2.3 Operationalization of context factors
  • 7.2.4 Operationalization of controls
  • 7.3 Methods of data analysis
  • 7.3.1 Descriptive statistics and mean comparisons
  • 7.3.2 Multivariate regression analysis
  • 7.4 Empirical results
  • 7.4.1 Cross-case analysis
  • 7.4.1.1 Complexity of cost accounting systems
  • 7.4.1.1.1 Cost type accounting
  • 7.4.1.1.2 Cost center accounting
  • 7.4.1.1.3 Cost object accounting
  • 7.4.1.1.4 Summary and score aggregation
  • 7.4.1.2 Standardization of cost accounting systems
  • 7.4.1.2.1 Formal standardization
  • 7.4.1.2.2 Factual standardization
  • 7.4.1.2.3 Summary and score aggregation
  • 7.4.1.3 Performance of cost accounting systems
  • 7.4.2 Cross-national analysis
  • 7.4.2.1 Complexity of cost accounting systems
  • 7.4.2.2 Standardization of cost accounting systems
  • 7.4.2.3 Performance of cost accounting systems
  • 7.4.3 Explicative analysis
  • 7.4.3.1 Univariate and bivariate analysis
  • 7.4.3.1.1 Evidence on the independent variables
  • 7.4.3.1.2 Correlation analysis
  • 7.4.3.2 Regression analysis
  • 7.4.3.2.1 Complexity of cost accounting systems
  • 7.4.3.2.2 Standardization of cost accounting systems
  • 7.4.3.2.3 Performance of cost accounting systems
  • 7.4.4 Summary and discussion
  • 8 Conclusions
  • 8.1 Main findings and implications
  • 8.2 Limitations
  • 8.3 Avenues for future research
  • Appendices
  • References
  • Series index

Index of figures

Figure 1-1: Research questions and objectives

Figure 1-2: Outline of the study

Figure 2-1: Cost accounting objectives

Figure 2-2: Cost accounting systematization

Figure 2-3: Conceptual framework of cost accounting in MNCs

Figure 2-4: Important elements of cost accounting systems

Figure 2-5: Characteristics of cost accounting standardization

Figure 3-1: Classification of related empirical research

Figure 4-1: Principal-agent relationships in MNCs

Figure 4-2: Integrated research framework

Figure 6-1: Schedule of qualitative data collection

Figure 7-1: Schedule of quantitative data collection

Figure 7-2: Cost accounting complexity and standardization in German MNCs

← XVII | XVIII → ← XVIII | XIX →

Index of tables

Table 2-1: Advantages and disadvantages of standardization

Table 3-1: Case studies on cost accounting system design

Table 3-2: Survey studies on cost accounting system design

Table 3-3: Mixed methods studies on cost accounting system design

Table 3-4: Case studies on standardization of management accounting instruments

Table 3-5: Survey study on standardization of management accounting instruments

Table 5-1: Advantages and limitations of qualitative research

Table 5-2: Advantages and limitations of quantitative research

Table 5-3: Mixed methods typology

Table 5-4: Integrated research design

Table 6-1: Case companies

Table 6-2: Regional distribution of sales

Table 6-3: Regional distribution of subunits

Table 6-4: Summary of transcription rules

Table 6-5: Characteristics of interviews

Table 6-6: Context of cost accounting in German MNCs

Table 6-7: Headquarters’ perspective on contribution margin accounting

Table 6-8: Design of cost accounting systems

Table 6-9: Standardization of cost accounting systems

Table 7-1: Response rates and numbers of observations

Table 7-2: Non-response bias test

Table 7-3: Cost accounting complexity score

Table 7-4: Cost accounting standardization score

Table 7-5: Objective achievement score

Table 7-6: Number of primary cost types

Table 7-7: Number of secondary cost types

Table 7-8: Imputed depreciation

Table 7-9: Imputed interest

Table 7-10: Imputed costs

Table 7-11: Complexity of cost type accounting

Table 7-12: Number of cost centers ← XIX | XX →

Table 7-13: Proportion of primary and secondary cost centers

Table 7-14: Overhead cost allocation

Table 7-15: Number of allocation bases

Table 7-16: Intensity of cost center variance analysis

Table 7-17: Frequency of cost center variance discussions

Table 7-18: Cost center variance analysis

Table 7-19: Complexity of cost center accounting

Table 7-20: Product costing

Table 7-21: Time reference of product costs

Table 7-22: Existence of contribution margin accounting

Table 7-23: Contribution margin accounting

Table 7-24: Intensity of cost object variance analysis

Table 7-25: Frequency of cost object variance discussions

Table 7-26: Cost object variance analysis

Table 7-27: Format of P/L account

Table 7-28: Existence of operating income statement

Table 7-29: Structural difference (operating income statement – P/L account)

Table 7-30: Operating income statement

Table 7-31: Complexity of cost object accounting

Table 7-32: Aggregation of cost accounting complexity scores

Table 7-33: Existence of a cost accounting guideline

Table 7-34: Year of validity of the cost accounting guideline

Table 7-35: Actuality of cost accounting guideline

Table 7-36: Cost type accounting standards

Table 7-37: Cost center accounting standards

Table 7-38: Cost object accounting standards

Table 7-39: Level of discretion

Table 7-40: Level of monitoring

Table 7-41: Formal cost accounting standardization scores

Table 7-42: Standardization of routines

Table 7-43: Existence of a standardized numbering system

Table 7-44: Standardization of numbering system ← XX | XXI →

Table 7-45: Level of automation

Table 7-46: Standardization of templates

Table 7-47: Level of flexibility

Table 7-48: Frequency of deviations

Table 7-49: Frequency of special analyses

Table 7-50: Factual cost accounting standardization scores

Table 7-51: Aggregation of cost accounting standardization scores

Table 7-52: Objective achievement

Table 7-53: Satisfaction with cost accounting system

Table 7-54: Cost accounting complexity (geographical cluster)

Table 7-55: Cost accounting complexity (traditional cluster)

Table 7-56: Cost accounting standardization (geographical cluster)

Table 7-57: Cost accounting standardization (traditional cluster)

Table 7-58: Cost accounting performance (geographical cluster)

Table 7-59: Cost accounting performance (traditional cluster)

Table 7-60: Product diversity

Table 7-61: ERP usage

Table 7-62: Usage of standardized spreadsheets

Table 7-63: Perceived environmental uncertainty

Table 7-64: Global markets importance

Table 7-65: Group’s top management support

Table 7-66: Business functions

Table 7-67: Existence of a shared service center

Table 7-68: Type of benchmarking

Table 7-69: Number of training days

Table 7-70: Proportion of mandatory training

Table 7-71: Objectives of cost accounting

Table 7-72: German expatriates

Table 7-73: Vertical differentiation

Table 7-74: Type of investment

Table 7-75: Year of affiliation

Table 7-76: Number of employees in subunits ← XXI | XXII →

Table 7-77: Pearson and Spearman correlations (1/2)

Table 7-78: Pearson and Spearman correlations (2/2)

Table 7-79: Regression analysis of cost accounting complexity

Table 7-80: Regression analysis of cost accounting standardization

Table 7-81: Regression analysis of cost accounting performance

Table 7-82: Summary of hypotheses

← XXII | XXIII →

Index of abbreviations

Details

Pages
XXVIII, 282
Publication Year
2018
ISBN (PDF)
9783631765531
ISBN (ePUB)
9783631765548
ISBN (MOBI)
9783631765555
ISBN (Hardcover)
9783631765562
DOI
10.3726/b14565
Language
English
Publication date
2018 (December)
Keywords
Standardization Complexity Management accounting
Published
Berlin, Bern, Bruxelles, New York, Oxford, Warszawa, Wien, 2018. XXVII, 281 S.
Product Safety
Peter Lang Group AG

Biographical notes

Alexander Schulz (Author)

Alexander Schulz studied Business Administration, Economics and Law at the University of Münster (Germany) and Monash University (Melbourne). He worked as a research assistant for the Chair of International Accounting at the University of Münster.

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Title: Cost Accounting in German Multinational Companies