Hara Kostakis, George Boskou and George Palisidis
This paper seeks to demonstrate an application of a methodology, which is based on the integration of three techniques, with the purpose of modelling activity‐based costing (ABC…
Abstract
Purpose
This paper seeks to demonstrate an application of a methodology, which is based on the integration of three techniques, with the purpose of modelling activity‐based costing (ABC) in restaurants. The proposed methodology serves as a tool for effectively computing values of cost drivers in the restaurant industry, as well as making accurate cost estimations.
Design/methodology/approach
The methodology is based on the integration of three techniques: simulation modelling, association rule mining (ARM) and ABC. Simulation modelling is used to model process variability and produce a range of cost values, instead of a point estimate of the cost, by generating a range of values for the simulated cost drivers. The advantage of the proposed methodology lies on the effective utilization of ARM in the ABC model; it extracts dependencies between a cost driver, whose estimation is time‐consuming, with another cost driver, which can easily be calculated. These associations can assist the estimation of the empirical distributions of those cost drivers, which were difficult to calculate.
Findings
The extracted associations verify the hypothetical relations between the cost drivers. The output produced is more precise values of the cost drivers that are included in an ABC model and were difficult to estimate. More accurate cost estimate means better pricing decisions for the restaurant managers.
Originality/value
The proposed methodology is an innovative technique that provides more accurate accounting information in the restaurant industry.
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H. Kostakis, C. Sarigiannidis, B. Boutsinas, K. Varvakis and V. Tampakas
This paper aims to present a methodology for activity‐based costing, which combines simulation modeling and association rule mining, one of the core data‐mining techniques. The…
Abstract
Purpose
This paper aims to present a methodology for activity‐based costing, which combines simulation modeling and association rule mining, one of the core data‐mining techniques. The objective of the proposed methodology is to deal with the problem of defining cost drivers.
Design/methodology/approach
Activity‐based costing uses the output produced by the simulation of cost drivers as inputs. As opposed to the integration of the ABC technique with simulation modeling, the possibility of estimating an empirical distribution of the simulated cost drivers does not exist in the proposed methodology. This is achieved with the use of data‐mining techniques and is based on the proposition that, if an association is found between a cost driver, whose estimation or calculation is time‐consuming, and another cost driver, which can easily be estimated or calculated, then the latter can lead to the estimation or calculation of the former.
Findings
The extracted association rules correspond to existing dependencies between the cost drivers.
Originality/value
The paper presents a combined methodology to deal with the problem of defining cost drivers in activity‐based costing. An example of the proposed methodology in healthcare is also presented.
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This study uses a budgeting experiment to examine the effects of peer influence and firm earnings position on managerial honesty. In the experiment, participants report production…
Abstract
This study uses a budgeting experiment to examine the effects of peer influence and firm earnings position on managerial honesty. In the experiment, participants report production costs to request funds from the firm based on their actual private cost information. The firm’s earnings position is manipulated at two levels, a gain condition and an edge condition, and the authors find that participants overstate costs (i.e., are less honest) to a greater extent in the dishonest peer influence condition than in the honest peer influence condition. The authors also find that the effect of peer influence on managerial honesty is context dependent. Specifically, participants respond to both dishonest and honest peer influence in the gain condition but they do not respond to peer influence in the edge condition. This study provides evidence for honest peer influence on honesty and it highlights the role of earnings position on the effect of peer influence on honesty. Controlling the disclosure of certain peer information is not possible because individuals can learn about peer information (honest or dishonest) formally or informally. Such uncontrollable peer information may be harmful to firms. The results suggest firms that provide managers with the consequences of managerial budgeting on the firm operational outcomes can neutralize the effect of peer influence on managerial honesty when managers’ budgeting decisions significantly affect firm profits.
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Domenico Raucci, Dominique Lepore and Rossella Sabatiello
This paper aims to present an extension of price sensitive measurement (PSM) combined with activity-based costing (ABC) for supporting activity-based pricing approaches in the…
Abstract
Purpose
This paper aims to present an extension of price sensitive measurement (PSM) combined with activity-based costing (ABC) for supporting activity-based pricing approaches in the small and medium-sized restaurants.
Design/methodology/approach
The joint model of PSM and ABC is applied to the fixed menu pricing analysis of a typical medium-small Italian restaurant.
Findings
The outcomes confirm the potential of the activity-based pricing approach for supporting pricing decision-making in the small and medium-sized restaurants. However, the complexity of the model for these contexts suggests testing simplified versions of ABC, proposed for other sectors, to exploit integration with PSM. Further, the authors find evidence of the need to further investigate the role of informal conditions, characterizing small-medium enterprises, which may play for the successful implementation of the approach proposed.
Originality/value
There is no analysis using the suggested approach for supporting menu pricing in medium-small restaurants. This case study contributes to the literature on activity-based pricing for small and medium-sized restaurants, based on the ABC approaches.
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Syed Haider Ali Shah, Nosheen Rafique, Sharjeel Saleem, Rafia Amjad and Bilal Arshad
The chapter is about the revamping of the hospitality and hotel industry in the South East Asian Region after the COVID-19 pandemic. The hotel industry contributes largely to the…
Abstract
The chapter is about the revamping of the hospitality and hotel industry in the South East Asian Region after the COVID-19 pandemic. The hotel industry contributes largely to the GDP of the economy. Therefore, the success of this industry is mandatory for the development of a country. The reconstruction of this sector depends upon the advanced techniques and practices to boost up this sector after crisis. Therefore, to implement such practices highly depends upon the highly educated and aware managers. This chapter focuses on how crisis management plan revamps this industry after the greatest destruction.
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Purpose: This chapter discusses how pandemics affect the nature of financial reporting especially for financial and non-financial institutions that were deeply affected by the…
Abstract
Purpose: This chapter discusses how pandemics affect the nature of financial reporting especially for financial and non-financial institutions that were deeply affected by the 2020 coronavirus (COVID-19) outbreak.
Method: This chapter presents a reflective discussion of the accounting practices and financial reporting options for firms during a pandemic, focusing on the interface between financial reporting and pandemics.
Findings: Accounting practices or techniques such as fair value accounting, big-bath accounting, loss avoidance, and income smoothing techniques can help to dampen the effect of a pandemic on firm performance.
Practical Implications and Significance: Some implications about the merits and risks of accounting during pandemics are highlighted and discussed.
Originality: Although the coronavirus COVID-19 crisis is, to some extent, still unfolding, there is limited empirical evidence on the implication for accounting.
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Emre Cengiz, Funda Cengiz, Muhittin Cavusoglu and Cihan Cobanoglu
This study aims to report the descriptive statistics of cost-system obsolescence (CSO) in the Turkish hotel industry and contingent factors that affect the CSO.
Abstract
Purpose
This study aims to report the descriptive statistics of cost-system obsolescence (CSO) in the Turkish hotel industry and contingent factors that affect the CSO.
Design/methodology/approach
To validate the reflective measurement model, first, an exploratory factor analysis in statistical package for social sciences was conducted. Then, a confirmatory factor analysis using maximum likelihood in analysis of moment structures was performed to establish the reliability and validity of the construct measurements.
Findings
The results demonstrate that CSO symptoms did not occur frequently in sample Turkish hotels. Turkish hotels were found to operate in intense competition and a significant relationship between competition intensity (CI) and CSO takes place. The hospitability industry has been perceived as rather uncertain. However, perceived environmental uncertainty (PEU) had no significant effect on CSO, and there was no mediation effect on the relationship between CI and CSO. Turkish hotels were found to perform market-orientated activities at a mediocre level. However, no significant relationship was found between market orientation (MO) and CSO. Additionally, Turkish hotels with decentralized decision-making structures and “prospector-type” strategies were found to have less CSO. On average, Turkish hotels have centralized decision-making structures and pursue “analyzer-type” strategies.
Practical implications
This study contributes to previous literature related to accounting information in the hotel industry. It also aims to give additional insight into Turkish hotels’ competitive environment, MO activities, decision-making structures and strategies and their association with CSO.
Originality/value
The study examined CSO in the Turkish hotel industry and factors that affect CSO. The study results provide additional insight into Turkish hotels’ competitive environment, MO activities, hotel structure and strategy. A new model to test CSO was created and validated using structural equation modeling (SEM).
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Anderson Betti Frare, Ana Paula Capuano da Cruz, Carlos Eduardo Facin Lavarda and Chris Akroyd
This study aims to understand the relationship between the elements of a startup firms’ management control system (MCS) package, its entrepreneurial orientation (EO) and firm…
Abstract
Purpose
This study aims to understand the relationship between the elements of a startup firms’ management control system (MCS) package, its entrepreneurial orientation (EO) and firm performance.
Design/methodology/approach
The authors collected survey data from a sample of 100 Brazilian startups who had exited technology-based parks and incubators. The authors used two data analysis techniques, namely, partial least squares structural equation modeling (PLS-SEM) and fuzzy-set qualitative comparative analysis (fsQCA).
Findings
The findings show that cultural and planning controls were the only two MCS elements that were included in all high-performing startup firms’ MCS packages. The authors also found that EO has a positive influence on firm performance through the MCS package.
Research limitations/implications
The mixed-method approach allowed for a holistic view of the analyzed phenomenon. PLS-SEM analysis was applied to the symmetric relationships between the proposed relationships while fsQCA was used to analyze the asymmetric combinations between EO dimensions and MCS package elements, which promoted high firm performance.
Practical implications
The authors show how different combinations of MCS elements form a package, mediating EO, which can enable high performance.
Originality/value
Using fsQCA and PLS-SEM, the authors were able to better understand the important role that MCS package adoption has on a startups’ performance and provide new evidence regarding the interface between MCS and EO. This extends the understanding of the importance that cultural and planning controls have in an MCS package to support startup performance.
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Victor Orona Claussen Mancebo, Daniel Magalhaes Mucci, Vanderlei dos Santos, Matheus dos Santos and Giovanna Yuli Kiyan
This study aims to understand the manifestation and adherence of performance management system (PMS) components in Brazilian startups, concurrently considering the different…
Abstract
Purpose
This study aims to understand the manifestation and adherence of performance management system (PMS) components in Brazilian startups, concurrently considering the different stages of development and catalyzing factors.
Design/methodology/approach
We gathered data through semi-structured interviews with founders and C-level executives from 19 startups. We used an inductive and exploratory method to spot patterns and differences through content analysis, aiming for a contextual understanding of startup PMS manifestation.
Findings
We analyzed the PMS of each startup, highlighting the consistency and differences among PMS components in each stage, considering the value proposition, goals, performance perspectives, monitoring indicators, action plans and performance evaluation processes. We also observe various catalyst factors that played an important role in accelerating the early development of the PMS in each stage.
Practical implications
This study provides a practical understanding of the meaning of each PMS component maturity that could be applied to startups in different stages and the catalyzing factors that played an important role in accelerating the initial development of PMS, providing practitioners with a holistic and situated context approach.
Originality/value
This is one of the first studies to provide empirical evidence on the manifestation and adherence of different components of the PMS in Brazilian startups, considering concurrently the organizational life cycle and existing catalyzing factors to the reality of these organizations.
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This paper aims to focus on applications of stochastic linear programming (SLP) to managerial accounting issues by providing a theoretical foundation and practical examples. SLP…
Abstract
Purpose
This paper aims to focus on applications of stochastic linear programming (SLP) to managerial accounting issues by providing a theoretical foundation and practical examples. SLP models may have more implications – and broader ones – in industry practice than deterministic linear programming (DLP) models do.
Design/methodology/approach
This paper introduces both DLP and SLP methods. In addition, continuous and discrete SLP models are explained. Applications are demonstrated using practical examples and simulations.
Findings
This research work extends the current knowledge of SLP, especially concerning managerial accounting issues. Through numerical examples, SLP demonstrates its great ability of hedging against all scenarios.
Originality/value
This study serves as an addition to building a cumulative tradition of research on SLP in managerial accounting. Only a few SLP studies in managerial accounting have focused on the development of such an instrument. Thus, the measurement scales in this research can be used as the starting point for further refining the instrument of optimization in managerial accounting.