Conceptual Explanation of Target Costing Based on Critical Perspective

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NAMAZI MOHAMMAD; HAJIHA ZOHREH; Chenari Hassan

مرکز اطلاعات علمی Scientific Information Database (SID) - Trusted Source for Research and Academic Resources

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Journal: MANAGEMENT ACCOUNTING Year:2019 | Volume:12 | Issue:43 Page(s): 129-152

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Title

Conceptual Explanation of Target Costing Based on Critical Perspective

Author(s)

NAMAZI MOHAMMAD | HAJIHA ZOHREH | Chenari Hassan | Issue Writer Certificate

Keywords

target costing adoptionQ1

prospector strategyQ1

defender strategyQ1

organizational costQ1

information asymmetryQ2

stock-based compensationQ1

cash-based compensationQ1

Abstract

The aim of this research is to advance the theory belonging to the determinants of adoption of target costing (TC) system by firms. Although the previous studies describes several factors, it clarifies the instances under which TC adoption will add firm value, which refers to a benefit direction. This research uses typology of Miles and Snow’ s (1978) strategy to evaluate the cost orientation of TC adoption, which responds the question as to why firms do not adopt TC even when the previous studies emphasize to the benefits of adoption. The paper concludes that possess of prospector managers the scope to take advantage of the high information asymmetry to inhibit TC adoption, because their stock-based compensation increases with volatility in earnings and stock returns. In contrast, managers with defending strategy obtain extensive cash-based compensation with the adoption of TC, which helps achieve much firm profits. The paper concludes with specific sources of agency problems and some avenues for future research. In the other words, adoption of a defensive strategy by managers in companies leads to value creation a long with the interests of all stakeholders intra and inter organization.

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APA: Copy

NAMAZI, MOHAMMAD, HAJIHA, ZOHREH, & Chenari, Hassan. (2019). Conceptual Explanation of Target Costing Based on Critical Perspective. MANAGEMENT ACCOUNTING, 12(43 ), 129-152. SID. https://sid.ir/paper/198834/en

Vancouver: Copy

NAMAZI MOHAMMAD, HAJIHA ZOHREH, Chenari Hassan. Conceptual Explanation of Target Costing Based on Critical Perspective. MANAGEMENT ACCOUNTING[Internet]. 2019;12(43 ):129-152. Available from: https://sid.ir/paper/198834/en

IEEE: Copy

MOHAMMAD NAMAZI, ZOHREH HAJIHA, and Hassan Chenari, “Conceptual Explanation of Target Costing Based on Critical Perspective,” MANAGEMENT ACCOUNTING, vol. 12, no. 43 , pp. 129–152, 2019, [Online]. Available: https://sid.ir/paper/198834/en

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