Institute of Management

Nirma University
MBA (Full Time)

Course Name: Accounting for Decision Making

Group Assignment II

Contemporary Issues in Cost Accounting

Strategic Cost Management

Submitted To: Prof. Shruti Dave

Submitted By: Division B

Group B13
23MBA215 Diksha Jain
23MBA224 Jivesh Kumar
23MBA231 Mahak Daryani
23MBA235 Nandini Singh Parihar

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 Title: Strategic Cost Management: New Wine, or Just New Bottles
John K. Shank, Darthmount College

Article Summary

The document provides clear guidelines regarding the copyright ownership and usage
permissions for the Journal of Management Accounting Research, which is owned by the
American Accounting Association. It explicitly states that the content of the journal is the
property of the American Accounting Association and emphasizes that it may not be copied,
emailed to multiple sites, or posted to a listserv without the express written permission of the
copyright holder. However, it does allow users to print, download, or email articles for individual
use.

In essence, the document underscores the importance of respecting copyright laws and obtaining
proper authorization for the dissemination of content from the Journal of Management
Accounting Research. It serves as a reminder of the legal and ethical responsibilities associated
with accessing and using copyrighted materials, particularly in the context of academic and
professional research.

The document's emphasis on the need for explicit written permission before sharing or
distributing the journal's content highlights the significance of upholding intellectual property
rights. This aligns with broader efforts to protect the rights of content creators and ensure that
their work is used in accordance with legal and ethical standards.

Furthermore, the document's clear delineation of permissible and impermissible uses of the
journal's content serves to guide individuals and organizations in their interactions with the
material. By outlining specific actions that are allowed (such as printing, downloading, and
emailing for individual use) and those that require explicit permission (such as copying, emailing
to multiple sites, or posting to a listserv), the document provides a framework for responsible and
compliant engagement with the journal's content.

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Overall, the document serves as a valuable resource for researchers, educators, and professionals
who engage with the Journal of Management Accounting Research. It not only clarifies the
copyright ownership and permissible uses of the journal's content but also reinforces the broader
principles of intellectual property rights and responsible scholarly conduct. Adhering to the
guidelines outlined in the document is essential for upholding the integrity of academic and
professional research practices while respecting the rights of content creators and copyright
holders.

The document emphasizes that the copyright of the Journal of Management Accounting
Research is owned by the American Accounting Association. It explicitly states that the content
of the journal should not be copied, emailed to multiple sites, or posted to a listserv without the
express written permission of the copyright holder. However, it permits users to print, download,
or email articles for individual use. This highlights the importance of respecting copyright laws
and obtaining proper authorization for the dissemination of content from the journal. The
document underscores the need for individuals to adhere to copyright regulations and respect the
intellectual property rights of the American Accounting Association. It also emphasizes the
significance of obtaining explicit written permission before sharing or distributing the journal's
content in any form. This serves as a reminder of the legal and ethical responsibilities associated
with accessing and using copyrighted materials.

In summary, the document provides clear guidelines regarding the copyright ownership and
usage permissions for the Journal of Management Accounting Research, emphasizing the need
for explicit written permission before sharing or distributing the content. It serves as a valuable
resource for individuals and organizations engaging with the journal's material, reinforcing the
principles of intellectual property rights and responsible scholarly conduct.

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Learnings

The core learnings from the provided document can be summarized as follows:

1. Copyright Ownership: The document clearly states that the copyright of the Journal of
Management Accounting Research is the property of the American Accounting Association. This
underscores the importance of recognizing and respecting the intellectual property rights of the
association as the rightful owner of the journal's content.

2. Usage Permissions: It is emphasized that the content of the journal should not be copied,
emailed to multiple sites, or posted to a listserv without the express written permission of the
copyright holder. However, users are permitted to print, download, or email articles for
individual use. This highlights the need for individuals to adhere to copyright regulations and
obtain proper authorization for the dissemination of content from the journal.

3. Legal and Ethical Responsibilities: The document serves as a reminder of the legal and
ethical responsibilities associated with accessing and using copyrighted materials, particularly in
the context of academic and professional research. It underscores the significance of upholding
intellectual property rights and responsible scholarly conduct.

The document provides clear guidelines regarding the copyright ownership and usage
permissions for the Journal of Management Accounting Research, which is owned by the
American Accounting Association. It emphasizes that the copyright of the journal's content is the
property of the American Accounting Association and highlights that it may not be copied,
emailed to multiple sites, or posted to a listserv without the express written permission of the
copyright holder. However, it does allow users to print, download, or email articles for individual
use.

The key learnings from this article revolve around the importance of respecting copyright laws
and obtaining proper authorization for the dissemination of content from the Journal of
Management Accounting Research. It underscores the legal and ethical responsibilities
associated with accessing and using copyrighted materials, particularly in the context of
academic and professional research. The document's emphasis on the need for explicit written
permission before sharing or distributing the journal's content highlights the significance of
upholding intellectual property rights and responsible scholarly conduct.

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Reflections

The document outlines the copyright guidelines for the Journal of Management Accounting
Research, stating that the copyright of the journal's content is owned by the American
Accounting Association. It specifies that the content should not be copied, emailed to multiple
sites, or posted to a listserv without the express written permission of the copyright holder.
However, it allows users to print, download, or email articles for individual use.

In reflecting on this article, it is important to consider the following key points:

1. Copyright Ownership: The document emphasizes that the American Accounting Association
holds the copyright for the Journal of Management Accounting Research. This underscores the
association's legal rights and control over the use and dissemination of the journal's content.

2. Usage Permissions: The guidelines highlight the permissible and impermissible uses of the
journal's content. Users are allowed to print, download, or email articles for individual use, but
they are prohibited from copying, emailing to multiple sites, or posting to a listserv without
explicit written permission. This reflects the importance of respecting copyright laws and
obtaining proper authorization for the distribution of copyrighted material.

3. Legal and Ethical Considerations: The reflections on this article should also encompass the
broader legal and ethical considerations related to copyright and intellectual property rights. It
serves as a reminder of the responsibilities associated with accessing and using copyrighted
materials, particularly in academic and professional contexts.

The reflections on this article should center on the significance of copyright ownership,
permissible usage of journal content, and the broader implications for responsible engagement
with copyrighted materials in academic and professional settings.

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Reactions

The document provides copyright information for the Journal of Management Accounting
Research, stating that the American Accounting Association holds the copyright for the journal.
It specifies that the content of the journal cannot be duplicated, shared on multiple websites, or
posted to a listserv without explicit written permission from the copyright holder. However,
individuals are allowed to print, download, or email articles from the journal for their personal
use.

Reactions toward this article may vary depending on the perspective of different stakeholders.
From the American Accounting Association's standpoint, the copyright notice serves to protect
the intellectual property rights associated with the Journal of Management Accounting Research.
It ensures that the association has control over the dissemination and reproduction of the
journal's content, safeguarding its interests and maintaining the integrity of the scholarly work
published in the journal.

Authors and contributors to the Journal of Management Accounting Research may view the
copyright notice as a means of protecting their original research and scholarly contributions. It
provides assurance that their work will not be disseminated or reproduced without proper
authorization, thereby safeguarding their intellectual property rights and academic integrity.

Readers and researchers who access the journal may perceive the copyright notice as a reminder
to respect the rights of the copyright holder and adhere to legal and ethical standards when using
the journal's content. It underscores the importance of obtaining proper authorization for the
dissemination and reproduction of scholarly work, promoting responsible and ethical use of
academic resources.

Overall, the copyright notice elicits reactions related to the protection of intellectual property, the
preservation of academic integrity, and the responsible use of scholarly resources. It serves as a
legal framework for regulating the usage of the journal's content and underscores the importance
of upholding copyright laws and ethical standards within the academic community.

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 Application of Strategic Cost Management

Based on the provided excerpts, the guidelines for the Journal of Management Accounting
Research indicate the following applications:

1. Copyright Ownership: The document specifies that the copyright of the Journal of
Management Accounting Research is owned by the American Accounting Association. This
underscores the association's legal rights and control over the use and dissemination of the
journal's content.

2. Usage Permissions: Users are permitted to print, download, or email articles for individual
use. However, the document explicitly states that the content may not be copied, emailed to
multiple sites, or posted to a listserv without the express written permission of the copyright
holder. This highlights the importance of respecting copyright laws and obtaining proper
authorization for the distribution of copyrighted material.

3. Legal and Ethical Considerations: The guidelines serve as a reminder of the legal and
ethical responsibilities associated with accessing and using copyrighted materials, particularly in
academic and professional contexts. It emphasizes the significance of upholding intellectual
property rights and responsible scholarly conduct.

The applications of the guidelines outlined in the document revolve around copyright ownership,
permissible usage of journal content, and the broader implications for responsible engagement
with copyrighted materials in academic and professional settings.

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Insights

The document provides copyright information for the Journal of Management Accounting
Research, indicating that the American Accounting Association holds the copyright for the
journal. It specifies that the content of the journal cannot be duplicated, shared on multiple
websites, or posted to a listserv without explicit written permission from the copyright holder.
However, individuals are allowed to print, download, or email articles from the journal for their
personal use.

In essence, this document serves as a legal notice regarding the copyright ownership and
permitted use of the content within the Journal of Management Accounting Research. It
underscores the importance of respecting the copyright holder's rights and outlines the
limitations on the dissemination and reproduction of the journal's content without prior
authorization.

The American Accounting Association's ownership of the copyright signifies its role as the
authoritative entity responsible for managing and protecting the intellectual property rights
associated with the Journal of Management Accounting Research. This underscores the
significance of the journal within the field of management accounting and the broader academic
community.

Furthermore, the restrictions on the distribution and sharing of the journal's content underscore
the need to uphold the integrity of scholarly publications and the rights of the copyright holder.
By delineating the boundaries of permissible use, the document aims to ensure that the
dissemination of the journal's content aligns with legal and ethical standards, thereby
safeguarding the interests of the American Accounting Association and the scholarly
contributions featured in the journal.

Overall, the document provides a clear and concise overview of the copyright ownership and
usage guidelines for the Journal of Management Accounting Research. It serves as a legal
framework for regulating the dissemination and reproduction of the journal's content,
emphasizing the importance of adhering to copyright laws and respecting the rights of the
copyright holder.

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 Conclusion

The document provides copyright information for the Journal of Management Accounting
Research, stating that the American Accounting Association holds the copyright for the journal.
It emphasizes that the content of the journal cannot be duplicated, shared on multiple websites,
or posted to a listserv without explicit written permission from the copyright holder. However,
individuals are allowed to print, download, or email articles from the journal for their personal
use.

In conclusion, the document serves as a legal notice regarding the copyright ownership and
permitted use of the content within the Journal of Management Accounting Research. It
underscores the importance of respecting the copyright holder's rights and outlines the
limitations on the dissemination and reproduction of the journal's content without prior
authorization. The American Accounting Association's ownership of the copyright signifies its
role as the authoritative entity responsible for managing and protecting the intellectual property
rights associated with the journal. The restrictions on the distribution and sharing of the journal's
content underscore the need to uphold the integrity of scholarly publications and the rights of the
copyright holder. Overall, the document provides a clear and concise overview of the copyright
ownership and usage guidelines for the Journal of Management Accounting Research, aiming to
ensure that the dissemination of the journal's content aligns with legal and ethical standards,
thereby safeguarding the interests of the American Accounting Association and the scholarly
contributions featured in the journal.

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 Title: Developing a Strategic Cost Management Model for a Potato
Packing Facility
Reinhardt J. Hitge, Merwe Oberholzer, Sanlie Middelberg

Article Summary

Introduction

The creation of a Strategic Cost Management (SCM) model specifically for Facility A, a potato
packing plant in South Africa, is explored in this article. This study takes a pragmatic approach
to researching the particular issues that the agriculture sector faces, especially in the
manufacturing and packing of potatoes. It critically assesses the suitability of Target Costing in
this situation and concentrates on implementing and tailoring particular SCM techniques, such as
Activity-Based Management, Kaizen Costing, Business Process Re-engineering, and Total
Quality Management. The article offers a thorough analysis of the facility's operations using a
combination of semi-structured interviews and observations, highlighting important areas for
cost control and efficiency gains. In addition to providing Facility A with insightful information,
this study establishes a standard for other businesses operating in related industries by
emphasizing the value of context-specific supply chain management tactics in maximizing
operational effectiveness and cutting expenses.

Work Methodology

A pragmatic research philosophy was used in the study of creating a Strategic Cost Management
(SCM) model for a potato packing facility in South Africa. This approach focused on workable
solutions to actual operational problems. Semi-structured interviews and on-site observations
were both used in the technique. During the observation phase, every step of the facility's
packaging process—from harvesting to dispatch—was carefully examined in order to get a
thorough grasp of operating workflows and pinpoint areas that needed improvement.

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Simultaneously, semi-structured interviews were carried out with significant facility staff
members, such as management and accounting professionals. These interviews gave insightful
information about the facility's problems and current cost control procedures.

These insights led to the selection and evaluation of particular SCM techniques, including
Activity-Based Management, Kaizen Costing, Business Process Re-engineering, Total Quality
Management, and an assessment of the suitability of Target Costing, for their potential impact on
the facility's operations and applicability. After carefully transcribing, coding, and classifying the
data from the observations and interviews, a thematic analysis was carried out to match the
results with the operational difficulties and SCM strategies that had been identified.

A customized supply chain management model was created as a result of this thorough
investigation. It included real-world examples and insights and was organized around the
selected methodologies. In order to ensure that the model was applicable and relevant to the
particular setting of the potato packing factory, the technique placed a strong emphasis on
iterative feedback and validation.

Insights

1. SCM Approach and Techniques: Using a practical methodology, the study focuses on
supply chain management strategies such as target costing, kaizen costing, activity-based
management (ABM), business process re-engineering (BPR), and total quality management
(TQM). This method recognizes that not all SCM techniques are appropriate for every industry
and is customized to meet the unique requirements of the potato packaging operation.

2. Importance of Contextual SCM: The study emphasizes how important it is to modify SCM
strategies to fit the facility's unique situation. The facility's price-taker role and the
unpredictability of target costs in the unpredictable market make this clear.

3. Business Process Re-engineering (BPR): BPR is highlighted because of its capacity to

change the way that current operational processes are carried out, particularly by cutting out non-
value-adding tasks like the tedious peeling of potatoes to remove stones and sticks.

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4. Activity-Based Management (ABM): It is determined that ABM plays a critical role in
identifying and managing important activities and cost drivers, such as labor, fuel, and
electricity. The report makes certain recommendations for controlling these expenses, like
cutting back on travel and making the most use of electricity.

5. Kaizen Costing: Due to its applicability in managing operational efficiency, this continuous
improvement strategy is advised. Because of the seasonal nature of the potato packing industry,
the study recommends implementing Kaizen costing.

6. Total Quality Management (TQM): TQM is acknowledged for its role in lowering expenses
related to rework and defects while simultaneously enhancing product quality. The report makes
recommendations for how to implement it at the facility, including appropriate training and
routine maintenance.

7. Operational Insights: From harvesting to packaging and transportation, the study offers a
thorough operational overview of Facility A. Having this thorough insight is essential to creating
solutions for cost management that work.

8. Useful Application and Transferability: The created SCM model's usefulness and
adaptability to other facilities of a similar nature are emphasized. This implies that other firms
working with perishable commodities or in the agriculture industry may find value in the study's
conclusions.

9. Research Methodology: Rich, qualitative insights into the facility's operations and difficulties
were obtained through the use of semi-structured interviews and observations for data collecting.
These insights influenced the construction of the SCM model.

10. Future Directions: The research notes that concentrating just on the packaging process has
its limitations. It proposes that the research be expanded to encompass planting and harvesting
procedures as well as the creation of a general SCM framework that can be used by different
potato farms and packing houses.

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Learnings:

1. Customized Supply Chain Management Approaches: A key takeaway is the significance of

tailoring supply chain management strategies to the unique requirements and circumstances of a
company. Since the chosen SCM techniques in this instance were modified for a potato packing
plant, it is important to take industry-specific aspects into account while creating SCM models.

2. Effective Use of SCM Techniques: The study shows how various SCM techniques, such as
Kaizen Costing, Activity-Based Management (ABM), Business Process Re-engineering (BPR),
and Total Quality Management (TQM), can be utilized in a practical environment. It draws
attention to the advantages of these methods for raising operational effectiveness and cutting
expenses.

3. Importance of Contextual Analysis: The study highlights the significance of situational

analysis in supply chain management by concentrating on the potato packing facility's distinct
context, which includes its market position as a price-taker and the particular constraints it faces.
This method aids in determining the best cost-management techniques.

4. BPR for Process Improvement: Using BPR showed how reevaluating and restructuring
processes may drastically cut down on non-value-adding tasks, which would save money and
boost productivity.

5. ABM for Cost Control: To improve control over operating costs, learn from the application
of ABM by concentrating on important activities and cost drivers, such as labor and electricity.

6. Kaizen Costing for Continuous Improvement: By adapting Kaizen costing to the facility's
seasonality, it is possible to demonstrate the value of small, ongoing improvements in preserving
operational effectiveness and cost-effectiveness.

7. Using TQM to Improve Quality and Cut Costs: By reducing waste and rework and
guaranteeing product perfection, TQM emphasizes quality management as an indirect way to cut
costs.

8. Challenges with Target Costing: The study emphasizes the necessity for flexible and
adaptive costing methodologies and illustrates the practical obstacles of adopting target costing
in industries with unpredictable market prices.

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9. Pragmatic Research Philosophy: This research strategy highlights the importance of
qualitative methodologies in obtaining comprehensive data for the creation of SCM models by
integrating semi-structured interviews with observations.

10. Transferability of the SCM Model: Although the SCM model was tailored for a particular
facility, the study indicates that its ideas might be applied in many situations, suggesting the
model's wider application.

11. Prospects for Future Research: The paper highlights the necessity of expanding the study
beyond packaging procedures to cover additional operational domains like planting and
harvesting, suggesting a need for all-encompassing SCM models in agriculture.

Application of Strategic Cost Management

1. Business Process Re-engineering (BPR): This technique was used to find and cut out non-
value-adding or redundant tasks in order to streamline processes. For instance, labor and
transportation expenses were reduced when the repeated task of removing stones and sticks from
potatoes was redesigned to only happen once.

2. Activity-Based Management (ABM): To better understand the factors influencing

operational costs at the facility, ABM was applied. Major costs such as labor, fuel, and electricity
were the emphasis. Various tactics were devised to manage these expenses, like cutting down on
pointless journeys to conserve fuel and maximizing the utilization of electricity (which include
exploring solar energy alternatives).

3. Kaizen Costing: This strategy was put into place to promote ongoing, little improvements.
The facility was designed with seasonality in mind, with goals established at the start of each
season to boost productivity and cut down on resource waste, especially in the areas of labor and
electricity use.

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4. Total Quality Management (TQM): TQM was implemented to improve the packing
process's general caliber. By reducing waste and rework, actions taken to improve product
quality—such as more efficiently removing stones and sticks, providing correct training for
handling products, and implementing equipment maintenance schedules—also indirectly lower
prices.

5. Assessment of Target Costing: Although Target Costing is a popular SCM technique, the
facility's implementation of this strategy was found to be difficult because of the market's
volatility and its position as a price-taker. The necessity of flexible and adaptive costing
procedures in sectors with volatile market pricing was highlighted by this assessment.

By concentrating on cost reduction, process efficiency, and quality improvement, the SCM
model created for the facility sought to match its resources and expenses with its operational and
strategic goals. In addition to addressing the facility's urgent financial issues, the model offered a
methodical technique for long-term strategic planning in cost control.

Conclusion

The article's conclusion highlights important discoveries and advancements in the field of cost
management regarding the creation of a Strategic Cost Management (SCM) model for a potato
packing facility in South Africa. The study effectively illustrates the use of customized supply
chain management (SCM) techniques, such as Activity-Based Management, Business Process
Re-engineering, Kaizen Costing, and Total Quality Management, which have been specially
suited to the particular circumstances of the potato packing business. The pragmatic approach
yielded a bespoke supply chain management model that targeted efficiency and cost reduction by
integrating observational and interview approaches to provide deep insights into the facility's
operations.

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The model's adaptation to other companies in related areas is suggested by the conclusion, which
highlights the model's potential for wider use. The study acknowledges its limitations and the
difficulties in putting some SCM strategies, like target costing, into practice. However, it also
creates opportunities for further research, especially in expanding the model to additional
operational domains and creating a more general framework for agricultural SCM. All things
considered, the study makes a significant addition to the literature on strategic cost management
by providing a useful framework for businesses dealing with comparable operational and
commercial difficulties.

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Bibliography

1. John K. Shank, D. C. (n.d.). Strategic Cost Management: New Wine, or Just New Bottles. EBSCO.

2. Reinhardt J. Hitge, M. O. (n.d.). Developing a Strategic Cost Model for a Potato Packing
Company. ScienceDirect.

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