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Complementary Effects of Stretch Target Costs and Concurrent Processes on Cost Reduction: a Dynamic Tension Perspective
Recent empirical evidence has not supported anecdotal evidence of the effectiveness of joint use of stretch target costs and concurrent processes. The goal of this research is to examine the joint effects of stretch target costs and concurrent processes on cost reduction. Specifically, this study builds on the dynamic tension perspective to explain how and why joint use of stretch target costs and concurrent processes are associated with superior performance. Applying this perspective, we assume that their joint use is accompanied by dynamic tensions that drive creative generation of cost reduction ideas. Nevertheless, we find no statistically meaningful relationship using multiple regression analysis for a sample of large Japanese manufacturing firms. However, supplementary analysis shows that the joint effects enhance cost reduction for firms in process industries but not those in assembly industries. Moreover, ad hoc analysis shows that concurrent processes enhance cost reduction when target costs are set at stretch levels. These results reflect the characteristics of Japanese process industries that manufacture products of high quality and technology while achieving low cost. This study extends previous research by building on the dynamic tension perspective to explain how and why the joint use of stretch target costs and concurrent processes enhances cost reduction. Moreover, it extends the existing literature by suggesting target cost management is effective in process industries.
Ketersediaan
| Call Number | Location | Available |
|---|---|---|
| PSB lt.2 - Karya Akhir (Majalah) | 1 |
| Penerbit | Tokyo: Keio University 2020 |
|---|---|
| Edisi | No. 54, 2020 |
| Subjek | Cost reduction Target Costs Dynamic Tension Perspective Concurrent Processes |
| ISBN/ISSN | 0453-4557 |
| Klasifikasi | NONE |
| Deskripsi Fisik | 59 p. |
| Info Detail Spesifik | Keio Business Review |
| Other Version/Related | Tidak tersedia versi lain |
| Lampiran Berkas |