Use this URL to cite or link to this record in EThOS:
Title: An examination of the antecedents and consequences of cost system sophistication in UK manufacturing industry
Author: Banhmeid, Badr
ISNI:       0000 0004 6500 4096
Awarding Body: University of Sheffield
Current Institution: University of Sheffield
Date of Award: 2017
Availability of Full Text:
Access from EThOS:
Access from Institution:
Cost systems play a major role in contemporary organisations by determining the costs of various organisational activities and products. The provision of accurate cost information by the cost system can enhance the quality of decision making and, subsequently, organisational performance. Therefore, academics and practitioners have paid particular attention to the role of cost systems, in addition to their determinant factors and consequences. However, our understanding of the antecedents and consequences of cost system sophistication (CSS), reflected mainly by the dimensions of cost pools and cost drivers, remains contested due to mixed findings in terms of the impact of antecedent factors on the cost systems and the latter's impact on organisational performance. In response to the limitations in this stream of literature, this research develops a more comprehensive theoretical model, which can better explain the impact of a set of contextual variables on CSS and the latter's impact on firm performance. By doing so, the current study uses the mediation perspective of the contingency theory to explain (1) how contingency factors influence CSS; and (2) how strategic decisions (product planning) and operational decisions (cost management) can mediate the relationship between CSS and organisational performance. The mediation approach can consider organisational performance and examining the impact of multiple contingency factors. More specifically, it can demonstrate the causal chain of relationships between the antecedents and consequences of the cost system by simultaneously examining the causal paths between the independent, mediator, and outcome variables. An explanatory sequential design methodology was adopted in order to acquire quantitative data to test the research model, followed by the collection of qualitative data to explain the quantitative results. The quantitative element consisted of a questionnaire, distributed to 1,957 medium and large UK manufacturing companies, which yielded 401 usable questionnaires (20.5% effective response rate). The quantitative analysis adopted structural equation modelling (SEM) and showed that size, the role of management accountants, business strategy, advanced manufacturing technologies, and cost structure had a direct effect on the level of CSS, which also affected organisational performance through the improvement in cost management. However, product diversity and competition were not significantly related to CSS, while the improvement in product planning did not mediate the CSS-organisational performance relationship. The qualitative findings supported the quantitative results, but also modified some of the tested hypotheses, introducing new antecedent factors, namely enterprise resource planning systems and top management awareness of the importance of cost information, and found no relationship between sustainability and CSS. This research contributes to the development of knowledge at three levels. At the theoretical level, it adopts the mediation approach, which can enable the investigation of multiple contingency variables and outcome variables in relation to the design of cost systems in order to foster our understanding of the complexity of the business environment by depicting the links and mechanisms among different organisational variables in one holistic model. At the methodological level, it is one of the few cost system studies to provide quantitative and qualitative evidence that enhances the validity and reliability of the research findings. Finally, it contributes to practice by directing managers to the importance of aligning the design of a highly sophisticated cost system to the most important factors embedded in the business environment of UK manufacturing companies. This can direct managers' attention to increase the level of the functionality of the cost system so as to match these factors. Finally, this study highlights the most important strategic and operational decisions brought about by sophisticated cost systems, which can guide managers in improving organisational performance.
Supervisor: Brierley, John ; Hadid, Wael Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available