The linkage between balanced score card BSC and activity based Costing / Management ABC/M as a strategie cost management SCM tool to improve strategie decision making

Abstract

This thesis covers study that analyzes the relationship between two of the managerial accounting tools: Activity-based Costing and Management ABC/M on a side, and the Balanced Scorecard BSC, on the other side, and their combined effect on Strategic Decisions Making SDM over various industry areas in Algeria. The first chapter was about Activity-based Costing and Management ABC/M system, by addressing how did this system rise after the fall of traditional costing systems. Then, we talked about Activity-based Costing ABC and Activity-based Management ABM, and discussed the benefits of using a cross model ABC/M on cost information and process management. In the second chapter, we addressed the Balanced Scorecard BSC by discussing its concepts and importance for performance measurement and strategic management. Then, we exposed the four perspectives of the BSC which are: the financial perspective, the customer perspective, the internal processes perspective and the learning and growth perspective. After that, a discussion about how can BSC be used in the strategic context as a translator of the organization' strategy. The third chapter addresses the concept and foundations of Strategic Cost management based on the analysis of Shank and Govindarajan. Then, the relationships between its instruments and ABC/M and BSC has been discussed to illustrate how can these two systems work in combination to serve the strategic context and strategic decisions making. Finally, an empirical study is conducted in the fourth chapter to answer the research questions and test the hypotheses. After presenting the conceptual framework of the study, defining how to measure each variable, preparing the study questionnaire and choosing the study sample, the survey questionnaire has been arbitrated then sent to the sample members which are Algerian firms registered in the Algerian Business Directory (Annuaire des Entreprises Algériennes) from the official website of the Algerian Chamber of Commerce and Industry. The analysis of the study findings has revealed that there is a significant positive relationship between using ABC/M and BSC combined on strategic decisions making improvement. However, no significant impact was found between merging ABCM and the internal processes and the learning and growth perspectives on decisions about supplier selection and relationships.