Studying the use of costing systems and its impact on managers’ performance in Tehran stock exchange
Keywords:
Understanding, costing system, psychological strength, performance of managers
Abstract
This study examines the effect of managers’ use of costing systems, through the power of psychology, on their performance. In this research, the four-dimensional conceptual psychological strength (meaning, competence, self-determination and impact) has been considered, and the term "performance" has been used to refer to the individual performance of managers in relation to their tasks. We consider managers’ performance as a subset of individual performance, and specifically focus on how well people do their tasks.
To test the hypotheses, we conducted at first a survey of mid-level managers, including 107 financial managers and production managers of active companies in the Tehran Stock Exchange; then the results were analyzed using the PLS model.
The results indicated that despite the confirmation of a significant relationship between the managers’ use of costing systems and all four dimensions of psychological strength, none of these variables affect the performance of managers. The current research extends previous researches of costing systems and increases our understanding of the role in improving effectiveness of costly systems.
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References
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Al-Omiri, M., and C. Drury. (2007). “A survey of factors influencing the choice of product costing systems inU.K. organizations”. Management Accounting Research, Vol. 18, No .4, pp. 399–424.
Amin Azad, J. (2007), "Psychology of Work and Management," Journal of Labor and Society, No. 23, pp. 47-49.
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Aronson, E., & Mettee, D. (1968).” Dishonest behavior as a function of differential levels of induced self-esteem”. Journal of Personality and Social Psychology, Vol.9, pp.121-127.
Bhimani, A. (ed.) (1996). Management Accounting: European Perspectives. Oxford, U.K.: OxfordUniversity Press.
Bromwich, M., and C. Hong. 1999. Activity-based costing systems and incremental costs. ManagementAccounting Research, Vol.3, pp. 159–168.
Burney, L. L., C. A. Henle, and S. A. Widener. (2009). “A path model examining the relations among strategicperformance system characteristics, organizational justice, and extra- and in-role performance”.Accounting, Organizations and Society, Vol. 34, No. 3-4, pp. 305–321.
Campbell.D., Datar.D., Kulp.S.L, Narayanan, V.G. Clara Xiaoling Chen .(2015).” Testing Strategy with Multiple Performance Measures: Evidence from a Balanced Scorecard at Store24”. Journal of Management Accounting Research: Vol. 27, No. 2, pp. 67-73.Testing Strategy with Multiple Performance Measures.
Chenhall, R. H. (2004). “The role of cognitive and affective conflict in early implementation of activity-basedcost management”.Behavioral Research in Accounting, Vol. 16, No.1, pp. 19–44.
Chin, W. W., J. S. Thatcher, and T. W. Ryan. (2012). “Assessing common method bias: Problems with theULMC technique”. MIS Quarterly, Vol.36, No.3, pp. 1003–1019.
Christensen, J., and J. S. Demski. (1997). “Product costing in the presence of endogenous subcost functions”.Review of Accounting Studies, Vol.2, No.1, pp.65–87.
DeLone, W. H., and E. R. McLean. (2003). “The DeLone and McLean model of information systems success:A ten-year update”. Journal of Management Information Systems, Vol.19, No.4, pp. 9–30.
Ebrahimzadeh, A. & Teymourifard, H. (2009), "Adding Time to Activity-Based Costing System", Journal of Accounting and Financial Management, No. 2, pp. 37-56.
Etemadi, H. & Dianati Dilami, Z. (2009), "Investigating the Effects of Organizational Culture, Participation in Budgeting and Management Accounting Systems on Performance of Managers", Quarterly of University of Humanities, No. 64, pp. 35-60.
Etemadi, H. & Shamszadeh, B. (2004), "Identification of deficiencies in the costing system of steel industry products in Iran", Quarterly of University of Humanities, No. 33, pp. 35-52.
Foster, G., and D. W. Swenson. (1997). “Measuring the success of activity-based cost management and itsdeterminants”. Journal of Management Accounting Research, Vol.9, pp.109–141.
Hair, J. F., W. C. Black, B. J. Babin, and R. E. Anderson. 2010. Multivariate Data Analysis: A GlobalPerspective. 7thEdition. Upper Saddle River, NJ: Pearson.
Hall, M. (2008). “The effect of comprehensive performance measurement systems on role clarity,psychological empowerment and managerial performance”. Accounting, Organizations and Society, Vol.33, No.2-3, pp.141–163.
Hulland, J. (1999).” Use of partial least squares (PLS) in strategic management research: A review of fourrecent studies”. Strategic Management Journal, Vol.20, No.2, pp.195–204.
Innes, J., F. Mitchell, and D. Sinclair. (2000). “Activity-based costing in the U.K.’s largest companies: Acomparison of 1994 and 1999 survey results”. Management Accounting Research, Vol.11, No.3, pp.349–362.
Ittner, C. D., W. N. Lanen, and D. F. Larcker. (2002).“The association between activity-based costing andmanufacturingperformance”. Journal of Accounting Research, Vol.40, No.3, pp.711–726.
Jafari, S. E. & Siyadat, S. A. & Delavari, H. (2005), "Relationship between Self-concept of Managers and Their Performance", Journal of Educational Psychology Studies, Vol. 2, No. 3, pp. 17-30.
Johnson, L. W., and A. L. Frohman. (1989).” Identifying and closing the gap in the middle of organizations”.Academy ofManagement Executive, Vol.3, NO.2, PP.107–114.
Kathuria, R., and E. B. Davis. (2001).“Quality and work force management practices: The managerialperformance implication”. Production and Operations Management, Vol.10, No.4, pp.460–477.
Kruis, A. M. and S. K. Widener. (2014).” Managerial Influence in Performance Measurement System Design”. Behavioral Research in Accounting, Vol. 26, No. 2, pp. 1-34.
Lau.C.M., Scully.G. (2015).” The Roles of Organizational Politics and Fairness in the Relationship between Performance Management Systems and Trust’. Behavioral Research in Accounting: , Vol. 27, No. 1, pp. 25-53
Mahama, H., and M.M. Cheng. (2013). “The Effect of Managers Enabling Perceptions on Costing System Use, Psychological Empowerment, and Task Performance”. Behavioral Research in Accounting, Vol.25, No.1, PP. 89–114.
McGowan, A. S. (1998).” Perceived benefits of ABCM implementation”. Accounting Horizons, Vol.12, No.1, pp.31–50.
McGowan, A. S., and T. P. Klammer. (1997).”Satisfaction with activity-based cost managementimplementation”. Journal of Management Accounting Research, Vol.9, pp.217–237.
Namazi, M. & Zare M. (2017), "Designing a Time-Based Costing System with Fuzzy Approach", Scientific-research Journal of Management Accounting, No. 33, pp. 13-31
Namazi, M. (2008), "Investigating the Costing System Based on Activity in Management Accounting and its Behavioral Considerations", Journal of Accounting and Auditing Studies, No. 26 and 27, pp. 71-106
Qorbani, H. (2005), "An overview of the activity-based costing system", Accountant Journal, No. 169, pp. 28-83
Saatchi, M. (2014) "Psychology of Management", Publishing Virayesh, Fourth Edition.
Sarmad, Z. & Bazargan, A. & Hejazi, E. (2011), " Research Method in Behavioral Sciences", Twenty-Second Edition, Aqah Publication.
Schoute, M. (2009). “The relationship between cost system complexity, purposes of use, and cost systemeffectiveness”. The BritishAccounting Review, Vol.41, pp. 208–226.
Soltani, A. & Salimian, A. (2012), "A comprehensive costing system based on activity and economic value added", Journal of Accounting and Financial Management, No. 11, pp. 36-54.
Spreitzer, G. M. (1995).” Psychological empowerment in the workplace: Dimensions, measurement, andvalidation”. The Academy of Management Journal, Vol.38, No.5, pp.1442–1465.
Spreitzer, G. M. (1996).” Social structural characteristics of psychological empowerment”. Academy ofManagement Journal, Vol.39, No.2, pp.483–504.
Spreitzer, G. M., M. A. Kizilos, and S. W. Nason. (1997). “A dimensional analysis of the relationship betweenpsychological empowerment and effectiveness, satisfaction and strain”. Journal of Management, Vol.23, No.5, pp.679–704.
Straub, D., M. Limayem, and E. Karahanna-Evaristo. (1995). “Measuring system usage: Implications for IStheory testing”. Management Science, Vol.41, No.8, pp.1328–1342.
Warren, W. H. (2006). “The dynamics of perception and action”. Psychological Review, Vol.113,
Al-Omiri, M., and C. Drury. (2007). “A survey of factors influencing the choice of product costing systems inU.K. organizations”. Management Accounting Research, Vol. 18, No .4, pp. 399–424.
Amin Azad, J. (2007), "Psychology of Work and Management," Journal of Labor and Society, No. 23, pp. 47-49.
Anderson, S. W., and S. M. Young. (1999). “The impact of contextual and process factors on the evaluation ofactivity-based costing systems”. Accounting, Organizations and Society, Vol. 24, No.7, pp .525–559.
Anderson, S. W., J. W. Hesford, and S. M. Young. (2002). “Factors influencing the performance of activitybasedcosting teams: A field study of ABC model development time in the automobile industry”.Accounting, Organizations and Society, Vol. 27, No.3, pp.195–211.
Aronson, E., & Mettee, D. (1968).” Dishonest behavior as a function of differential levels of induced self-esteem”. Journal of Personality and Social Psychology, Vol.9, pp.121-127.
Bhimani, A. (ed.) (1996). Management Accounting: European Perspectives. Oxford, U.K.: OxfordUniversity Press.
Bromwich, M., and C. Hong. 1999. Activity-based costing systems and incremental costs. ManagementAccounting Research, Vol.3, pp. 159–168.
Burney, L. L., C. A. Henle, and S. A. Widener. (2009). “A path model examining the relations among strategicperformance system characteristics, organizational justice, and extra- and in-role performance”.Accounting, Organizations and Society, Vol. 34, No. 3-4, pp. 305–321.
Campbell.D., Datar.D., Kulp.S.L, Narayanan, V.G. Clara Xiaoling Chen .(2015).” Testing Strategy with Multiple Performance Measures: Evidence from a Balanced Scorecard at Store24”. Journal of Management Accounting Research: Vol. 27, No. 2, pp. 67-73.Testing Strategy with Multiple Performance Measures.
Chenhall, R. H. (2004). “The role of cognitive and affective conflict in early implementation of activity-basedcost management”.Behavioral Research in Accounting, Vol. 16, No.1, pp. 19–44.
Chin, W. W., J. S. Thatcher, and T. W. Ryan. (2012). “Assessing common method bias: Problems with theULMC technique”. MIS Quarterly, Vol.36, No.3, pp. 1003–1019.
Christensen, J., and J. S. Demski. (1997). “Product costing in the presence of endogenous subcost functions”.Review of Accounting Studies, Vol.2, No.1, pp.65–87.
DeLone, W. H., and E. R. McLean. (2003). “The DeLone and McLean model of information systems success:A ten-year update”. Journal of Management Information Systems, Vol.19, No.4, pp. 9–30.
Ebrahimzadeh, A. & Teymourifard, H. (2009), "Adding Time to Activity-Based Costing System", Journal of Accounting and Financial Management, No. 2, pp. 37-56.
Etemadi, H. & Dianati Dilami, Z. (2009), "Investigating the Effects of Organizational Culture, Participation in Budgeting and Management Accounting Systems on Performance of Managers", Quarterly of University of Humanities, No. 64, pp. 35-60.
Etemadi, H. & Shamszadeh, B. (2004), "Identification of deficiencies in the costing system of steel industry products in Iran", Quarterly of University of Humanities, No. 33, pp. 35-52.
Foster, G., and D. W. Swenson. (1997). “Measuring the success of activity-based cost management and itsdeterminants”. Journal of Management Accounting Research, Vol.9, pp.109–141.
Hair, J. F., W. C. Black, B. J. Babin, and R. E. Anderson. 2010. Multivariate Data Analysis: A GlobalPerspective. 7thEdition. Upper Saddle River, NJ: Pearson.
Hall, M. (2008). “The effect of comprehensive performance measurement systems on role clarity,psychological empowerment and managerial performance”. Accounting, Organizations and Society, Vol.33, No.2-3, pp.141–163.
Hulland, J. (1999).” Use of partial least squares (PLS) in strategic management research: A review of fourrecent studies”. Strategic Management Journal, Vol.20, No.2, pp.195–204.
Innes, J., F. Mitchell, and D. Sinclair. (2000). “Activity-based costing in the U.K.’s largest companies: Acomparison of 1994 and 1999 survey results”. Management Accounting Research, Vol.11, No.3, pp.349–362.
Ittner, C. D., W. N. Lanen, and D. F. Larcker. (2002).“The association between activity-based costing andmanufacturingperformance”. Journal of Accounting Research, Vol.40, No.3, pp.711–726.
Jafari, S. E. & Siyadat, S. A. & Delavari, H. (2005), "Relationship between Self-concept of Managers and Their Performance", Journal of Educational Psychology Studies, Vol. 2, No. 3, pp. 17-30.
Johnson, L. W., and A. L. Frohman. (1989).” Identifying and closing the gap in the middle of organizations”.Academy ofManagement Executive, Vol.3, NO.2, PP.107–114.
Kathuria, R., and E. B. Davis. (2001).“Quality and work force management practices: The managerialperformance implication”. Production and Operations Management, Vol.10, No.4, pp.460–477.
Kruis, A. M. and S. K. Widener. (2014).” Managerial Influence in Performance Measurement System Design”. Behavioral Research in Accounting, Vol. 26, No. 2, pp. 1-34.
Lau.C.M., Scully.G. (2015).” The Roles of Organizational Politics and Fairness in the Relationship between Performance Management Systems and Trust’. Behavioral Research in Accounting: , Vol. 27, No. 1, pp. 25-53
Mahama, H., and M.M. Cheng. (2013). “The Effect of Managers Enabling Perceptions on Costing System Use, Psychological Empowerment, and Task Performance”. Behavioral Research in Accounting, Vol.25, No.1, PP. 89–114.
McGowan, A. S. (1998).” Perceived benefits of ABCM implementation”. Accounting Horizons, Vol.12, No.1, pp.31–50.
McGowan, A. S., and T. P. Klammer. (1997).”Satisfaction with activity-based cost managementimplementation”. Journal of Management Accounting Research, Vol.9, pp.217–237.
Namazi, M. & Zare M. (2017), "Designing a Time-Based Costing System with Fuzzy Approach", Scientific-research Journal of Management Accounting, No. 33, pp. 13-31
Namazi, M. (2008), "Investigating the Costing System Based on Activity in Management Accounting and its Behavioral Considerations", Journal of Accounting and Auditing Studies, No. 26 and 27, pp. 71-106
Qorbani, H. (2005), "An overview of the activity-based costing system", Accountant Journal, No. 169, pp. 28-83
Saatchi, M. (2014) "Psychology of Management", Publishing Virayesh, Fourth Edition.
Sarmad, Z. & Bazargan, A. & Hejazi, E. (2011), " Research Method in Behavioral Sciences", Twenty-Second Edition, Aqah Publication.
Schoute, M. (2009). “The relationship between cost system complexity, purposes of use, and cost systemeffectiveness”. The BritishAccounting Review, Vol.41, pp. 208–226.
Soltani, A. & Salimian, A. (2012), "A comprehensive costing system based on activity and economic value added", Journal of Accounting and Financial Management, No. 11, pp. 36-54.
Spreitzer, G. M. (1995).” Psychological empowerment in the workplace: Dimensions, measurement, andvalidation”. The Academy of Management Journal, Vol.38, No.5, pp.1442–1465.
Spreitzer, G. M. (1996).” Social structural characteristics of psychological empowerment”. Academy ofManagement Journal, Vol.39, No.2, pp.483–504.
Spreitzer, G. M., M. A. Kizilos, and S. W. Nason. (1997). “A dimensional analysis of the relationship betweenpsychological empowerment and effectiveness, satisfaction and strain”. Journal of Management, Vol.23, No.5, pp.679–704.
Straub, D., M. Limayem, and E. Karahanna-Evaristo. (1995). “Measuring system usage: Implications for IStheory testing”. Management Science, Vol.41, No.8, pp.1328–1342.
Warren, W. H. (2006). “The dynamics of perception and action”. Psychological Review, Vol.113,
Published
2018-06-29
How to Cite
Eidgahi, S., Eghbali Moghaddam, M., & Amirnezhad, E. (2018). Studying the use of costing systems and its impact on managers’ performance in Tehran stock exchange. Amazonia Investiga, 7(14), 139-150. Retrieved from https://amazoniainvestiga.info/index.php/amazonia/article/view/481
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