Implementation of quality cost management tool in dyadic purchaser-provider relationship context
Year: 2012
Type: dissertation
Abstract: This research deals with research areas of management accounting and networks, introducing a cost management tool with quality emphasis previously used in single organization setting into inter-organizational setting.Research focuses on dyadic relationships, particularly to purchaser-provider model.Two public organizations working within a purchaser-provider relationship are studied.Data is gathered through triangulation of observation, survey, interviews and workshop results.Data gathered is analyzed through contingency theory complemented with theory of organizational trust and transaction cost economics.Open-book accounting is introduced as a concept to illustrate the amount of needed information exchange when coordinating mutual cost reduction efforts.Research method applied is interventionist case study carried out as an action research.Implemented cost management method is studied in its implementation process and changes required for it to work in network context are analyzed.Research contributes to literature in several ways, first, it explicates existing cost management tool as currently conceptualized in the literature and further specifies the theory on the tool applied by testing its boundaries in dyadic setting.Second, it answers demands to focus on mutual co-operation in place of one-way implementation originating from focal firm.Third, using contingency theory it provides knowledge on variables that influence changes both in pre-adoption and adoption stages of cost tool implementation in dyadic context.Fourth, it proposes the concept of network as a generic contextual variable instead of handling it as a matter of size.Fifth, it analyzes the success of the tool's implementation in the network context and provides a further specified model for cost management success evaluation.Sixth, it uses transaction cost economics coupled with the theory on trust to explain division of costs and benefits gained from the implementation of the specified cost management tool.Research findings indicate that cost management tool introduced in a wider context of dyadic relationship changes in comparison to existing literature on the cost management tool.Identified differences are classified into differences arising from organization specific factors, differences caused by proposed network context of dyadic relationship, differences caused by the environment, technology based factors and reasons attributed to differences in individual factors.Research also indicates that trust plays a significant role in determining how the costs and benefits incurred from improvement initiative in dyadic relationship are divided.It is seen that trust is strengthened by the time organizations spend in mutual coordination and improvement efforts.The level of open-book accounting required is found to be modest, although some information related to work procedures, problem areas and certain costs are required to facilitate improvement and to lower costs.
Author: Toni Mättö
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1044241444