Antecedents and Consequences of Complex Costing Systems: Empirical Analyses

Date: 8 July 2019

Venue: UAntwerpen, Stadscampus, Hof van Liere, Willem Elsschotzaal - Prinsstraat 13 - 2000 Antwerp (route: UAntwerpen, Stadscampus)

Time: 5:00 PM

PhD candidate: Piyada Daowadueng

Principal investigator: Prof. dr. Ann Jorissen

Short description: PhD defence Piyada Daowadueng - Faculty of Business and Economics


During the last few decades many organizations in both the manufacturing and service sectors have been faced with dramatic changes in their business environment, for example deregulation, increasing global competition, the reduction in product life-cycles arising from technological innovations, and customers’ demands for greater product diversity. These changes have had a significant influence on costing systems design; that is, these changes have led to modifications of cost structures and cost behavior in which traditional costing systems fail to provide the relevant information for companies. As a result, there is an interest and a need to adopt more complex costing systems that can provide more detailed cost information that is both useful and relevant for decision-making, performance measurement and control.

Meanwhile, focusing only on a level of cost allocation detail cannot distinguish sufficiently between the different levels of complexity in costing systems that exist across all companies. In our study, we examine complex costing systems by considering both the level of cost allocation detail and the variety of different costing systems being used (standard costing, variance analysis, contribution margin, life-cycle costing and target costing) in companies.

The objective of this dissertation is twofold. First, we want to investigate the antecedents of the adoption of complex costing systems (cost allocation detail and costing systems diversity), and second, we want to examine the consequences of complex costing systems. To address these two research objectives, we provide three empirical studies.

The first empirical study, we investigate that the presence of internal uncertainty (i.e., operational turbulence) is correlated with the adoption of complex costing systems. Next, the second empirical study, we argue that managers will use more detailed and more diverse cost information to support decision-making and decision-influencing control practices through their perceived information accuracy. Lastly, the third empirical study, we examine the extent to which cost information is used in exploitation or exploration firm context in a decision-making and decision-influencing role, hereby we investigate whether the level of detail and diversity of cost information present, moderates this relationship between an exploitation or exploration context and the use of cost information in a decision-making or decision-influencing role. To test hypotheses, we collected data from 191 medium- and large-sized Thai manufacturing and service companies.