From cost control to cost management: How is the current state of the Italian context?

Author/s Anna Lucia Missaglia, Alberto Bubbio, Dario Gulino
Publishing Year 2024 Issue 2024/1 Language English
Pages 24 P. 203-226 File size 298 KB
DOI 10.3280/MACO2024-001010
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

The change in markets’ dynamics occurred during the last 50 years led to a signifi-cant transformation within the cost structure of companies, resulting in a gradual loss of cost control systems’ effectiveness. This caused a progressive shift from cost control to cost management (CM), involving the use of innovative tools and approaches that provide more suitable cost allocation methods, cost computation logics, and allow to detect value-creating costs in order to support the decision-making process. The present work aims at exploring the current state of CM application in the Ital-ian context, identifying the main mechanisms implemented and the key percep-tions of organizations concerning the upsides, downsides and innovativeness of CM logics. The findings show that the level of CM diffusion has increased in the most recent years compared to the evidence of prior research, but most companies still don’t use CM systems. Processes and activities-based approaches are increasingly ap-plied; however, besides traceable costing logics, the traditional full costing methods are still highly used. Companies benefited from the implementation of CM sys-tems, since they supply data that allow to understand which are the main causes of complexity, what costs really create value and facilitate participation in the de-cision-making process. However, the high quantity of resources required for the system’s development and the resilience of people to the process of change still represent barriers that hinder the diffusion of CM. The main implication of the study is raising awareness about the importance of using suitable CM systems to evaluate costs as well as signaling the potential chal-lenges of their application. The twofold role of human resources in the process of CM innovation is explored.

Keywords: Cost Management, Cost Control, Italy, Activity-Based Costing, Com-plexity, Decision Making

  1. Ahrens, T., Chapman, C.S. (2006), Doing qualitative field research in management accounting: Positioning data to contribute to theory, Accounting, organizations and society, 31(8), pp. 819-841.
  2. Anthony, R. N. (1956) Management Accounting, Richard D. Irvin, Homewood, Illinois.
  3. Baird, K.M., Harrison, G.L., Reeve, R.C. (2004), Adoption of activity management practices: A note on the extent of adoption and the influence on organizational and cultural factors. In: Management Accounting Research, 15, pp. 323-399.
  4. Bennett, N., Lemoine, J. (2014), What VUCA really means for you. Harvard business review, 92(1/2).
  5. Brierley, J.A., Cowton, C.J., Drury, C. (2001), Research into product costing practice: A European perspective. In: European Accounting Review, 10(2), pp. 215-256.
  6. Bubbio, A. (2020), Un problema ancora «aperto»: il passaggio dalle logiche del «cost control» a quelle del «cost management», in Giannetti, R., Tenucci, A. (Ed.) Analisi, misurazione e gestione dei costi. Contesti e approcci emergenti nello studio dei costi, SIDREA, FrancoAngeli.
  7. Burns, J., Scapens, R. W. (2000), Conceptualizing management accounting change: an institutional framework. Management accounting research, 11(1), pp. 3-25.
  8. Caglio, A., Ditillo, A. (2021), Reviewing interorganizational management accounting and control literature: A new look. Journal of Management Accounting Research, 33(1), pp. 149-169.
  9. Candio P. (2023), On the role of cost-effectiveness in accounting, Management Control, Suppl. 2, pp. 215-225. DOI: 10.3280/MACO2023-002-S1010
  10. Carenzo, P. Turolla, A. (2010), The diffusion of management accounting systems in manufacturing companies: an empirical analysis of Italian firms, in Epstein, M.J., Manzoni, J.-F., Davila, A. (Ed.) Performance Measurement and Management Control: Innovative Concepts and Practices (Studies in Managerial and Financial Accounting, Vol. 20), Emerald Group Publishing Limited, Bingley, pp. 457-499.
  11. Centorrino, G., Noto, G., Rupo, D. (2022), Management control in inter-firm relationships: Opportunities and challenges of blockchain technology adoption, Management Control, 3, pp 65-88. DOI: 10.3280/MACO2022-003004
  12. Cescon, F., Brunetti, G. (2000), Management Accounting, Costing and the new business environment, in Dahiya, S.B. (Ed.) (2000) The current state of business disciplines, Spellbound Publications Pvt, Rohtak.
  13. Cescon, F., Costantini, A., Grassetti, L. (2019), Strategic choices and strategic management accounting in large manufacturing firms, Journal of Management and Governance, 23(3), pp. 605-636.
  14. Cinquini L., Campanale C., Marelli A., Mauro S.G., Tenucci A. (2020), La misurazione di costi e performance nei La misurazione di costi e performance nei modelli di business orientati ai servizi: una ricerca esplorativa modelli di business orientati ai servizi: una ricercar, Management Control, 3, pp. 59-85. DOI: 10.3280/MACO2020-003004
  15. Cinquini L, Collini P., Marelli A., Tenucci A. (2011), I cambiamenti del costing nelle aziende manifatturiere: risultati di una ricerca comparative, Management Control, 1, pp. 11-40. DOI: 10.3280/MACO2011-001002
  16. Cinquini, L., Collini, P., Marelli, A., Quagli, A., Silvi, R. (1999), A survey on cost accounting practices in Italian large and medium size manufacturing firms, 22th Annual Congress of the European Accounting Association, May 5-7, Bordeaux.
  17. Cinquini, L., Collini, P., Marelli, A., Tenucci, A. (2015), Change in the relevance of cost information and costing systems: evidence from two Italian surveys. Journal of Management and Governance, 19, pp. 557-587.
  18. Collini P., Coller G. (2023), Accounting in a challenging world, Management Control, Suppl. 2, pp 5-10. DOI: 10.3280/MACO2023-002-S1001
  19. Cooper, R. G. (2011), Perspective: The innovation dilemma: How to innovate when the market is mature, Journal of Product Innovation Management, 28(s1), 2-27.
  20. Cugini, A., Carù, A., Zerbini, F. (2007), The cost of customer satisfaction: a framework for strategic cost management in service industries. European Accounting Review, 16(3), pp. 499-530.
  21. D’Aveni, R.A. (1994) Hypercompetition: Managing the Dynamics of Strategic Maneuvering. Free Press, New York.
  22. D’Onza, G., Greco, G., Allegrini, M. (2016). Full cost accounting in the analysis of separated waste collection efficiency: A methodological proposal, Journal of environmental management, 167, pp. 59-65.
  23. Datar, S. M., Rajan, M.V. (2021), Horngren’s cost accounting: a managerial emphasis. Pearson.
  24. Del Baldo, M., Arcari, A.M., Ruisi, M. (2019), Controllo di gestione nelle PMI e consulenti esterni, Management Control, Suppl. 1, pp. 69-94. DOI: 10.3280/MACO2019-SU1005
  25. Del Sordo, C., Orelli, R.L. (2008), Management accounting in Higher Education System: The Italian case. ICERI 2008 Proceedings, pp. 70-80.
  26. Ferreira, A., Moulang, C., Hendro, B. (2010), Environmental management accounting and innovation: an exploratory analysis, Accounting, Auditing & Accountability Journal, 23(7), pp. 920-948.
  27. Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2014). Lean manufacturing and firm performance: The incremental contribution of lean management accounting practices. Journal of Operations Management, 32(7-8), pp. 414-428.
  28. Giannetti R., Marelli A. (2016), Il ruolo degli strumenti di cost management nello sviluppo di nuovi prodotti sostenibili, Management Control, 2, pp. 33-68. DOI: 10.3280/MACO2016-002003
  29. Giannetti, R., Cinquini, L., Miolo Vitali, P., Mitchell, F. (2021), Management accounting change as a learning process: a longitudinal analysis. Qualitative Research in Accounting & Management, 18(4/5), pp. 484-515.
  30. Gosselin, M. (1997), The effect of strategy and organizational structure on the adoption and implementation of activity-based costing. Accounting, organizations and society, 22(2), pp. 105-122.
  31. Gosselin, M. (2007), A review of activity-based costing: Technique, implementation, and consequences, in Chapman, C.S., Hopwood, A.G., Shields, M.D. (Ed.), Handbook of Management Accounting Research. Elsevier.
  32. Gupta, M., Galloway, K. (2003), Activity-based costing/management and its implications for operations management, Technovation, 23(2), pp. 131-138.
  33. Henri, J.F., Boiral, O., Roy, M.J. (2016), Strategic cost management and performance: The case of environmental costs, The British accounting review, 48(2), pp. 269-282.
  34. Hiebl, M.R., Richter, J.F. (2018), Response rates in management accounting survey research. Journal of Management Accounting Research, 30(2), pp. 59-79.
  35. Hoozée, S., Mitchell, F. (2018), Who influences the design of management accounting systems? An exploratory study. Australian Accounting Review, 28(3), pp. 374-390.
  36. Horngren, C. (1995), Management Accounting: this century and beyond, Management Accounting Research, 6(3), pp. 281-286.
  37. Hvam, L., Hansen, C.L., Forza, C., Mortensen, N.H., Haug, A. (2020), The reduction of product and process complexity based on the quantification of product complexity costs, International Journal of Production Research, 58(2), pp. 350-366.
  38. Innes, J., Mitchell, F. (1995), A survey of activity-based costing in the UK’s largest companies. In: Management Accounting Research, 6(2), pp. 137-153.
  39. Innes, J., Mitchell, F., Sinclair, D. (2000), Activity-based costing in the UK’s largest companies: A comparison of 1994 and 1999 survey results, Management Accounting Research, 11(3), pp. 349-362.
  40. Jain, N. (2021), Survey versus interviews: Comparing data collection tools for exploratory research. The Qualitative Report, 26(2), pp. 541-554.
  41. Lee, A.S. (1991). Integrating positivist and interpretive approaches to organizational research, Organization science, 2(4), pp. 342-365.
  42. Lin, R., Chen, Z., Li, Z. (2016), A New Approach for Allocating Fixed Costs Among Decision Making Units. Journal of Industrial & Management Optimization, 12(1).
  43. Magnacca, F., Giannetti, R., Cinquini, L. (2022), Inter-organizational cost management: exploring the role of maturity models, Manufacturing and Service Accounting Research Conference.
  44. Malmi, T. (1999), Activity-based costing diffusion across organizations: An exploratory empirical analysis of Finnish firms, Accounting, Organizations and Society, 22(8), pp. 649-672.
  45. Mancini, D. (2018), Evoluzione e prospettive dei sistemi di informazione e di controllo, Management Control, 2 supplemento, pp. 5-14.
  46. Marasca, S., Silvi, R., (Ed.) (2004), Sistemi di controllo e Cost management tra teoria e prassi, Giappichelli, Torino.
  47. Miraglia R.A. (2016), Modello di controllo e misure di performance nelle relazioni di fornitura tra imprese. Una ricerca empirica nel contesto italiano, Management Control, 2, pp. 69-87. DOI: 10.3280/MACO2016-002004
  48. Nassar, M., Aldeen Al‐Khadash, H., Sangster, A. (2011), The diffusion of activity‐based costing in Jordanian industrial companies, Qualitative Research in Accounting & Management, 8(2), pp. 180-200.
  49. Orelli, R.L., Visani, F. (2004). Strumenti di analisi e gestione dei costi: lo stato dell’arte nel Comuni italiani. Azienda Pubblica, 4, pp. 587-606.
  50. Oyewo, B. (2021), Do innovation attributes really drive the diffusion of management accounting innovations? Examination of factors determining usage intensity of strategic management accounting. Journal of Applied Accounting Research, 22(3), pp. 507-538.
  51. Palazzi F., Ciambotti M., Gelsomini L. (2019), L’adozione dell’Activity-Based Costing nelle PMI: analisi di un caso, Management Control, 1, pp. 97-122. DOI: 10.3280/MACO2019-001005
  52. Shank, J., Govindarajan, V. (1993), Strategic Cost Management. The new tool for competitive Advantage. Free Press, New York.
  53. Shillinglaw, G. (1977), Managerial Cost Accounting. Richard Irwin, Homewood Illinois. 4th Ed.
  54. Weygandt, J.J., Kimmel, P. D., Aly, I.M. (2020), Managerial Accounting: Tools for Business Decision-Making. John Wiley & Sons.

Anna Lucia Missaglia, Alberto Bubbio, Dario Gulino, From cost control to cost management: How is the current state of the Italian context? in "MANAGEMENT CONTROL" 1/2024, pp 203-226, DOI: 10.3280/MACO2024-001010