An Exploratory Study of the Factors Affecting the Implementation Success of German Cost Accounting Methods
55 Pages Posted: 30 Jul 2007
Date Written: July 30, 2007
Grenzplankostenrechnung (known as GPK in the U.S. and literally translated as marginal planned cost accounting) has been touted recently in the U.S. practitioner literature as a superior costing approach. This approach integrates many homogeneous cost centers with flexible budgeting, variance analysis, fixed and variable cost separation, and variable costing all at the cost center level to achieve a high-level of cost control and accuracy. However, there is virtually no empirical research in the German literature about their impact on cost system or firm performance. This exploratory study provides a working definition of GPK for research and tests conceptual path models of antecedent and process factors affecting its adoption and implementation within German-speaking firms. Based primarily SEM analysis of survey data, there is support that both contextual and cultural factors lead to antecedent conditions that make GPK more likely to be adopted. Further analysis of firms who have adopted GPK suggests that GPK accuracy is more a function of top management support, while the number of GPK practices implemented is more a function of the capability of the information system. Also, the perceived value of the overall cost accounting system appears to be related more to the quality of the information system than to GPK implementation.
Keywords: Grenzplankostenrechnung, German cost accounting, SEM, management accounting
JEL Classification: M40, M46
Suggested Citation: Suggested Citation