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Cost Management: A
Strategic Approach
The first chapter explains the basic principles of cost accounting for business environment, followed by the nature of services as a cost accounting object, the main concept of activity-based costing and its application to business in the 21st century. Further chapters provide step-by-step descriptions of activity-based costing from cost-type accounting, through cost centre accounting, to assessment of costs, linking of sub-processes, and identification of cost drivers for creative cost management. Balanced Scorecard has emerged as a proven and effective performance measurement tool in the quest to capture, describe, and translate intangible assets—the zeitgeist of the new economy—into real value for all of an organisation’s stakeholders, and in the process allowing organisations to successfully implement their differentiating strategies. Many "traditional" cost management professionals may view the financial perspective`A0of the Scorecard as their natural home, since many cost-related insights are revealed in this section. However, upon further reflection, we discover that modern cost management cuts a wide swath through the entire scorecard architecture. The last chapter Performance Measurement and Compensation describes the manner in which organisations measure performance and send a signal to employees and other stakeholders about its priorities. The questions which are frequently asked with respect to cost management are: Is India Inc a happening place? Are Indian companies a source of benchmarks in cost management? Do they have potential to be global cost leaders? Who are these companies and how have they done it? The authors provide answers to these and many other questions by giving examples from the Indian scenario. In order to explain contemporary cost management concepts, the authors have given good account Indian companies practices, e.g., Infosys, Asian Paints, Sona Koyo, E-Choupal, Nestle India Ltd., Pantaloon, ITC, Tata Consultancy Services, Taj Hotels, Infosys Technologies Ltd., Air India, SGRJ & Associates, TVS Electronics, SRF, HCL Technologies, Wipro Ltd, Tata Motors, Mahindra & Mahindra Ltd TATA Steel, Ashok Leyland, and so on. Companies quoted include big and small, public and private manufacturing and services. How Indian automobile companies like M&M and Tata Motors are striving to become global cost leaders by adopting contemporary cost management concepts like "Target Costing" and "Product Lifecycle Costing". How innovatively some of the companies are meeting the challenges of environment protection, and how these Indian companies have integrated ICT into production processes, design development, and distribution, the authors have explained all these concepts vividly. A glossary of key-terms and a literature list in the end of the book can be very useful to the readers. The authors have explained some of the current topics such as "Activity-Based Costing", "Economic Value Added" and "Balanced Scorecard" along with Indian case studies, charts, tables, and figures supported by data. Written in a simple and lucid language, the book can be useful to the students, researchers, faculty, professionals and managers engaged in understanding contemporary cost management concepts and techniques. It can also be recommended as a reference book to the libraries.
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THE
backdrop of the book is
Indian industry. It is accumulated interactions, observations and
research of the authors that has gone into the making of this book. The
goal is to develop ways of cost accounting of the business and strategic
approach to output-oriented management.