The impact of competition and uncertainty on the adoption of target costing

• In recent years factors that may influence firms' decisions to adopt target costing have been presented in the literature. These studies generally argue that target costing adoption rates positively correlate with the intensity of competition and perceived environmental uncertainty. However, empirical support for this view is limited. This study argues that the adoption of target costing positively correlates with the intensity of competition, but negatively correlates with perceived environmental uncertainty. In addition, perceived environmental uncertainty moderates the adoption of target costing when the intensity of competition intensities. Hypotheses are generated and tested using data provided by a web-based survey of Swedish manufacturing firms. The findings indicate that the adoption of target costing and the intensity of competition positively relate, although the effect reduces with an increase in perceived environmental uncertainty. There is no evidence of a direct relationship between perceived environmental uncertainty and the adoption of target costing. As a result, the findings partly conflict with the outcomes of earlier work. The article also discusses the implications for research and firm managers considering the adoption of target costing.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

Nyckelord

Studies; Impact analysis; Competition; Uncertainty; Costing; Technology adoption; Manufacturers

Business studies

Företagsekonomi

Business Studies

Företagsekonomi

Publikations- och innehållstyp

ref (ämneskategori)

art (ämneskategori)