Empirical Evidence from Germany
3 Review of prior research
A multinational’s corporate cost accounting system is generally formed by the accounts of their subsidiaries.295 Nevertheless, subsidiaries have rarely been chosen as a research object in cost accounting studies. Essentially, this lack of research can be traced back to the separation of functional and organisational aspects of management accounting research,296 or more generally the split-up of business disciplines concerning organisational behaviour and management accounting.297 Hence, despite this study’s focus on subsidiaries, this section reviews research on cost accounting in both legal and economic organisational sub-units. In order to avoid misconceptions about such organisational structures, they are briefly introduced at this point.
Legal structures describe the different legal entities in a multinational and their interrelations with respect to share property, control agreements or profit transfer agreements.298 In research, legal structures facilitate the identification of research objects. Yet, these provide little information with respect to managerial authority or reporting obligations in MNCs.299 These authorities, however, also affect the design of management and cost accounting systems in multinationals.300 Thus, various studies in international cost accounting research are focussed on economic structures. Typically, these studies look at business units, i.e. divisions of a MNC which are responsible for all value chain activities with respect to different products, regions or customers.301 In addition, there is some research on functionally specialised units of MNC such as different production sites.302 In functionally specialised companies, top-level departments reflect different value chain activities, such as procurement, production, sales or administration....