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One of the main tasks of management accounting academics is to understand the environment in which management accounting is practiced so that assertive commands should be introduced in organizational decision-making to enhance its competitiveness. According to Kaplan and Norton (1996) and Waweru et al. (2004), a number of changes have impacted the praxis of management accounting in the last three decades, i.e., advances in information technology, highly competitive environments, economic recessi
The purpose of this essay is to analyze target costing as a managerial accounting artifact, considering its various definitions, to analyze how it can be put into practice by means of an organizational process and, finally, to discuss how target costing can play a leading role in the search for competitive advantage. With this essay, we expect to disseminate target costing as a relevant tool for entrepreneurship and competitiveness, especially in the context of small growing businesses, as well
For Cooper and Slagmulder (1999), target costing allows companies to “prevent costs during design rather than reducing costs after the fact”. In this way, it keeps management focused on strategic issues rather than in activities aimed at fixing strategies or operations, but at the same time, emphasizes the fundamental role of controlling. According to Cooper and Chew (1996), target costing also contributes to assurances of profitability levels in a continuous time frame once “products that show
Ensaio teórico (não se aplica).
Lastly, innovation and customer loyalty, fundamental components of brand equity should create entry barriers to other competitors. The former two components, however, are generally achieved on the long run and, thus, target costing should be an integral part of an organization’s culture. The main competitiveness issue in this argument is how well (effectively and efficiently) a business can incorporate target costing philosophy into its culture in relation to competitors.
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