JAMAR Summer 2015

THE JOURNAL OF APPLIED MANAGEMENT ACCOUNTING RESEARCH

JAMAR Information

Table of Contents

EDITORIAL

Disaster Financing: A Contingent Valuation Approach

By Janek Ratnatunga and Ana Sopanah

This paper sets out to value the total public financing needed to somewhat alleviate the economic, environmental and social losses of an unprecedented human disaster using a mixed-valuation method, termed ‘Contingent Loss Assessment’ that integrates the economic loss assessment of the disaster with a contingent valuation of the environmental and social costs.

The focus of the paper is to provide a comparison between the economic predictions of the disaster financing required, and the amount of disaster financing that will better alleviate the human suffering observed, using contingent valuation method (CVM) predictions. Using the case of the ‘Lapindo’ mudflow disaster in Indonesia, it is argued that the incremental financing required, an extra $200 million flowing directly to those affected, is not an amount that is beyond the scope of those who have undertaken the responsibility of providing compensation to those affected.

 

Attributes of Adopters and the Diffusion of Benchmarking

By Davood Askarany and Hassan Yazdifar

To take advantage of the most recent advances, organisations may need to proceed with the adoption of benchmarking. However, the extant literature suggests that benchmarking is not widely adopted by many organisations.

Contributing to the literature, the current study is aiming to improve our understanding of the diffusion of benchmarking by exploring the impacts of attributes of adopters on the diffusion of benchmarking in organisations in Australia. Surveying Australian CIMA members, this study identifies 12 organisational factors that can influence the diffusion of benchmarking in practice.

 

Information Technology Integration, Extent of ABC Use, Business Strategy, and Performance

By Adam S. Maiga

A review of prior research reveals mixed results with respect to the organizational performance achieved from both Information Technology (IT) integration and Activity-Based Costing (ABC). Drawing from information systems, accounting, marketing, and management literature, this study extends prior studies and uses structural equation modelling (SEM) to assess whether manufacturing plant IT integration impacts its extent of ABC use and whether there is a direct relation between both IT integration and extent of ABC use and plant performance, or whether both IT integration and extent of ABC use impact plant performance through low-cost and product differentiation strategies.

Overall, the results indicate support for the theoretical framework. Plant IT integration significantly affects the extent of its ABC use, and both IT integration and extent of ABC use significantly affect low-cost strategy and product differentiation strategy that, in turn, impact both market performance and profitability. Market performance is also found to significantly impact profitability

 

Examining The Interaction Effect of Cost Information Types and Strategy on the Effectiveness of New Product Development: An Experimental Study

By Dyah Ekaari Sekar Jatiningsih and Mahfud Sholihin

Previous studies on the role of cost information in New Product Development (NPD) producing conflicting results. Motivated by those conflicting results whether cost information is beneficial or detrimental in the design process of new product, an experiment approach is adopted to examine the interactive effect of cost information types and strategy on the effectiveness of new product development.

The results of this study show that cost effectiveness of new product design is enhanced when designers are facilitated with specific cost information rather than relative cost information, with greater magnitude in low cost strategy orientation. Additionally, we find a trade off in low cost strategy orientation, namely as designers are provided with more precise cost information, their focus on product feature decreases.