Studying the efficiency and the productivity of the cost system as a result of exchanging cost information with the different supply parties: an applied study

Research Abstract

Abstract While exchanging cost information in supply chain "SC" context has been received as a crucial process supporting SC partnership and collaboration, a firm may avoid exchanging cost information with other SC parties or outside its boundaries fearing from an opportunistic use of this information from the other parties seeking their self interest. The research had analyzed the effect of three factors affecting firm's willingness to exchange cost information with other SC parties; the level of trust between the parties, the distribution of power between the parties, and the type of cost accounting system (traditional versus advanced system) applied in the firm and its similarity with the systems applied in other SC firms and also the research examined obstacles of exchanging cost information, the application of open book accounting and inter-organizational cost management, and the effect of cost information exchange upon the efficiency and productivity of the firm's cost system and the whole SC. The research results based upon a survey study conducted in three sectors of pharmaceutical industry (governmental, private, and multi-national) and interviews with firms' managers of cost and supply chain management "SCM" departments along with applied study in two leading multi-national firms in cement and pharmaceutical industries, The sample size of the survey was 140 with a response rate of 79.29%. The results of the research showed that 1) there is a partial rather than full exchange of cost information in the society surveyed, 2) it would be difficult to exchange cost information even with threatening sanctions against opportunistic behavior without the existence of mutual trust, 3) there is positive significant relationship between symmetric power distribution, and the application of advanced and similar cost accounting systems in individual SC firms and the parties' willingness to exchange cost information, And 4) there is a positive significant relationship between cost information exchange and the efficiency and productivity of firm's cost accounting system, and the efficiency and productivity of the whole SC. Key words Exchanging cost information, trust, power, cost accounting system productivity and efficiency, and SC productivity and efficiency.

Research Keywords

Studying the efficiency and the productivity of the cost system as a result of exchanging cost information with the different supply parties: an applied study