Towards a conceptual framework for strategic cost management [Elektronische Ressource] : the concept, objectives, and instruments / vorgelegt von Ibrahim Abd El Mageed Ali EL Kelety

Ibrahim El Kelety

Sujets

• Management

Informations

• Publié par: technische_universitat_chemnitz
• Publié le: 01 janvier 2006
• Nombre de lectures: 24
• Langue: English
• Poids de l'ouvrage: 2 Mo

Extrait

Towards a conceptual framework for strategic cost management

- The concept, objectives, and instruments -



Von der Fakultät für Wirtschaftswissenschaften der
Technischen Universität Chemnitz

genehmigte

Dissertation

zur Erlangung des akademischen Grades

Doctor rerum politicarum

(Dr. rer. pol.)

vorgelegt von

Ibrahim Abd El Mageed Ali El Kelety


geboren am 11.01.1965 in El Menoufia - Ägypten


eingereicht am: 14. Juni 2006

Gutachter: Prof. Dr. Uwe Götze
Prof. Dr. Dr. h.c. Jürgen Bloech
Prof. Dr. Peter Schuster


Tag der mündlichen Prüfung: 18. Juli 2006



























Acknowledgement

To the Almighty God “ALLAH” Who have granted me all these graces to fulfill this work
and Who supported me in all my life. To Him I extend my heartfelt thanks.

It is a pleasure to express my sincere and deepest heartfelt gratitude to my “Doktorvater“
Prof. Dr. Uwe Götze for his kind supervision, continuous encouragement, valuable
enthusiastic discussion and unfailing advice throughout the present work, as well as financial
support during my latest period of study in Germany. He assisted in all matters, provided
solutions to different problems. Prof. Dr. Uwe Götze supported and helped me during my
learning period in Germany and writing this thesis. I am very lucky being one of his students.

I would like to express my deep thanks to Prof. Dr. Dr. h.c. Jürgen Bloech - Georg-August
University of Göttingen - for his kind acceptance to act as an examiner. I would also like to
express my sincere thanks to Prof. Dr. Peter Schuster - The University of Applied Sciences
in Schmalkalden - for his kind acceptance to act as an examiner.

I am extremely grateful to my parents, who did all the best to help me in my education, my
sisters and my brothers for their love and support. I am extremely thankful to my wife for her
support and encouragement giving me the strength and comfortable atmosphere to finish this
study. To my pretty daughters Nada, Nayra and Maryam, for their lovely smiles that can
relieve any kinds of tiredness.

I would like to thank all staff members and my colleagues in the Chair of Management
Accounting and Controlling - Faculty of Business Administration and Economics - Chemnitz
University of Technology - for nice, friendly talking, valuable discussions and for their help.

I would like to thank the Egyptian Ministry of Higher Education, the Egyptian Government,
and Faculty of Commerce - Menoufia University for the financial support during my study in
Germany.

To all of you, Thank you very much.
Ibrahim Abd El Mageed Ali El Kelety
Chemnitz, July 2006
Contents

Figures ............................................................................................................................vii
Tables................................................................................................................................xi
Abbreviations.................................................................................................................xii


1. Introduction ................................................................................................................1

2. Trends and Changes in the Business Environment................................................12
2.1. Changes of the Markets and a Greater Focus on the Customer..........................12
2.2. Shifts in the Basis of Competition......................................................................16
2.3. Advances in the Manufacturing and Information Technologies ........................20
2.4. New Forms of Management Organization .........................................................22

3. Strategic Management ..............................................................................................26
3.1. The Concept of Strategic Management ..............................................................26
3.2. The Strategic Management Process....................................................................28
3.3. Levels of Strategy...............................................................................................35
3.4. Competitive Strategies and Firm Success ..........................................................36
3.4.1. Porter’s Competitive Strategies36
3.4.1.1. Cost-Leadership Strategy........................................................37
3.4.1.2. Differentiation ...........................................................37
3.4.1.3. Niche Market Strategy.............................................................38
3.4.1.4. A Combination of Generic Strategies - Stuck in the Middle...39
3.4.1.5. Support for Porter ....................................................................40
3.4.1.6. Criticisms of Porter..................................................................41

4. Traditional Cost Management and Long-Term Firm's Success...........................44
4.1. Literature Review.....................................................................................44
4.2. Evaluation of Traditional Cost Management - Some Examples .............. 48
4.2.1. Non-Financial Controlling-Information.................................................48
4.2.2. Standard Cost Perspective and Cost Management .................................50
4.2.3. Diversity and Complexity in the Manufacturing....................................53
4.2.4. Strategic Influence on the Costs .............................................................54
4.2.5. Adequate Support for Introducing of New Technologies ......................55
4.2.6. Market Orientation.................................................................................56
4.2.7. Conclusions............................................................................................57
ii
5. Strategic Cost Management - Concept, Objectives, and Suggested Framework 59
5.1. The Issue of Terminology ..................................................................................59
5.2. The Strategic Importance of Cost Management.................................................60
5.3. The Concept of Strategic Cost Management......................................................61
5.4. Concerns and Objectives of Strategic Cost Management ..................................66
5.5. The Suggested Framework for Strategic Cost Management and its Objectives 75

6. Strategic Cost Management - Guiding Principles and Key Concepts ..................80
6.1. The Guiding Principles of Strategic Cost Management .....................................80
6.2. Strategic Cost Management - Key Concepts......................................................82
6.2.1. ent - Cost Drivers ...........................................83
6.2.1.1. The Concept of Cost Drivers...................................................83
6.2.1.2. Cost Drivers - Traditional Views ............................................84
6.2.1.3. Cost Drivers - Strategic Views ................................................94
6.2.1.4. The Basic Outline of Cost Drivers ........................................107
6.2.1.5. Ways of Identifying Cost Drivers..........................................116
6.2.2. Strategic Costs Management - Value Chain Analysis..........................121
6.2.2.1. The Value Chain Concept .....................................................121
6.2.2.2. The Fundamental Methodology of Value Chain Analysis
for Cost Management ............................................................124
6.2.2.2.1. Identify the Value Chain Activities and
Disaggregate the Firm into Separate Activities...125
6.2.2.2.2. Establish the Relative Importance of Different
Activities in the Total Cost of the Product ..........127
6.2.2.2.3. Compare Costs by Activity .................................129
6.2.2.2.4. Identify Cost Drivers ...........................................129
6.2.2.2.5. Identify linkages and Interrelationships in the
Value Chain…….……………………………….130
6.2.2.2.6. Identify Opportunities for Reducing Costs
and /or Improving Value .....................................135

7. Strategic Cost Management - Objects ...................................................................140
7.1. Product as a Strategic Cost Management-Object .............................................141
7.1.1. Product Design and Development approaches and product cost
Management .........................................................................................142
7.1.1.1. Design for Manufacture & Assembly....................................144
7.1.1.2. Customer Oriented Product Design and Development .........148
7.1.1.3. Product Design and Complexity Management.....................