1、THE RESEARCH OF INTEGRATED ACTIVITY-BASEDCOSTING AND ECONOMIC VALUE ADDED SYSTEM AS A STRATEGIC MANAGEMENT TOOL NarcyzRoztocki StateUniversity of New York ABSTRACT This paper describes a field study which examines the implementation of an integrated Activity-Based Costing and Economic Value Added Sy
2、stem in two small manufacturing firms. The results of this study suggest that this integrated approach outperforms both traditional cost accounting and standard Activity-Based Costing methods. Furthermore, the findings from two small companies show that there liability of cost information obtained b
3、y this integrated system increases substantially when differences in capital usage exist. Factors that could create these differences in capital usage and lead to distorted cost information are discussed. Using actual data from the field study, possible distortions to product cost as a result of a h
4、omogenous capital cost allocation are also examined. Finally, the impact of this integrated approach on the decision-making 、 strategic planning and long-term business performance of the two participating companies is discussed. KEYWORDSActivity-BasedCosting；EconomicValueAdded；strategic management I
5、ntroduction In todays business environment, many manufacturing companies are facing a fierce competition in domestic and global markets implementing strategic management tools, in order to increase their competitiveness. Activity-Based Costing (ABC) and Economic Value Added（ EVA） are two such exampl
6、es of these strategic management tools. Traditionally, ABC and Economic Value Added methods have been used separately. ABC has been used as a costing system, mainly to improve operating efficiency； while Economic Value Added has been used as a financial performance measure, mainly to improve financi
7、al efficiency. In recent years, some researchers have proposed that ABC should be combined with Economic Value Added to create an integrated costing and performance system(Hubbell, 1996a； Hubbell, 1996b； Cooper &Slagmulder, 1999； Roztocki& Needy, 1999c). The ABC component of this integrated system w
8、ould focus on operating expenses while the Economic Value Added component would focus on capital costs, however, this integrated strategic management system would be able to account for all costs incurred in the process of generating products、 jobs or services. This paper describes a field study at
9、two small manufacturing companies where three different costing systems (Traditional Cost Accounting, ABC, and the Integrated ABC-EVA System) were used to obtain product cost information. The results they yielded were compared. The main focus of this analysis was to identify factors that lead to dis
10、tortions in product cost information in both the Traditional Cost Accounting (TCA) and common ABC systems and to demonstrate the reliability of product cost information in the Integrated ABC-EVA System. Methodology A field study was chosen as the main research methodology. The field study was carrie
11、d out in four major phases: system design、 system implementation、 data collection, and data analysis. The Managers were able to actively participate in each phase of the study. In preparation for the design phase, managers were familiarized with the Integrated ABC and EVA System. Presentations on co
12、mbining ABC with Economic Value Added and examples of successful implementation in companies were given. Then, in the first phase, an Integrated ABC and EVA System was designed for each participating company. In the second phase, the individually tailored Integrated ABC-EVA Systems were implemented,
13、 alongside existing costing and accounting systems. During these initial phases, methodology developed by researchers from the University of Pittsburgh and the State University of New York at New Paltz was applied. (For more details about this methodology, which was developed in order to more effici
14、ently implement the Integrated ABC-EVA System in a small business environment, an interested reader may refer to the cited articles.) In the third phase, data drawn from each costing system was collected from all participants and brought together with the researchers ongoing calculations. In the fou
15、rth phase, the collected data was analyzed. Using the step-by-step implementation methodology to perform their own calculations, the managers were able to verify the figures which we had recorded independently and to observe the agreement between our calculations and theirs. This “hands on” approach
16、 enabled the managers to better understand and appreciate the consistency of the system. The data analysis yielded individual findings for each company. These findings were then compared in order to reach a conclusion about the value of the Integrated ABC-EVA System for manufacturing companies in ge
17、neral. The more specific objective of the data analysis was to investigate which factors may distort information provided by the TCA or ABC system when capital costs are not allocated or are allocated arbitrarily. Because factors such as diversity in production volume、 product size、 product complexi
18、ty、 material and setups often tend to distort cost information (Cooper, 1988), these factors are examined closely for possible capital allocation distortions. By tracing operating costs to cost objects, the ABC system has the ability to eliminate many of these distortions by using multiple (operatin
19、g) cost drivers. However, because the ABC system does not take into account capital costs, it can be assumed that an arbitrary capital costs allocation may allow other distortions to occur. In addition, it can be assumed that since the standard ABC cost analysis only considers direct and operating costs, the managers who are forced to make their decisions based on operating profits alone, or who try to somehow arbitrarily allocate capital charges to cost objects will sometimes make wrong decisions. 作为战略管理工具的作业成本法和经济
