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The Alignment-Theory of Product Cost Management. A Classic Grounded Theory Approach

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Maxion, Claude (2023) The Alignment-Theory of Product Cost Management. A Classic Grounded Theory Approach. DBA thesis, University of Gloucestershire. doi:10.46289/7Q6V2JT8

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Official URL: https://eprints.glos.ac.uk/14113/

Abstract

Product management is a predominant form of organisation in various industries. In addition, product costs account for a major share of a company’s overall cost. However, the managerial problem of how product cost management (PCM) activities should be organised has not yet been sufficiently solved. Consequently, the thesis’ research goal was to develop a normative theory on how to organise product cost management activities in the manufacturing industry in relation to a specified dominant impacting factor. To solve the practical problem, a classic Grounded Theory study informed by critical realism (CRGT) was conducted based on the ‘7-steps-full-package’ approach from Walsh, Holton and Mourmant. Based on data collected during 51 interviews with managers and PCM consultants the study revealed a normative ‘Product-Cost-Management-Theory’ of ‘Aligning’. It incorporates an actionable three-stage ‘Strategising-Relevancing-Profiling-(SRP)-Procedure’ which centres around a novel classification of four different PCM-profiles (from basic to value-oriented) impacted by and to be aligned with the relevance of product cost as the dominant contingency factor. This relevance ought to be aligned with the company’s strategic directions (company positioning, business priorities and company strategy) which themselves have to be aligned with the key success factors (KSF) of the company’s external environment. The four PCM-profiles have been sketched with the relevant dimensions and attributes as principle stereotypes being built-on-each-other suggesting different, ordinally-scaled, levels. Opposing those levels with the relevance of product costs in a company, a ‘Strategic-Fit-Matrix’ can be set up with aligned zones of fit, which should be targeted, and zones of misfit, which should be avoided. This will enable managers and consultants by providing them a novel and actionable SRP-practice to more effectively organise the manner in which product costs should be managed (‘how to’). Ultimately, this aligned and strategically fitting PCM-profile will contribute to increased company performance. The thesis’ nascent propositional theory adds the aspect of PCM onto current organisational theory and is ready to be detailed, modified, or executed.

Item Type:

Thesis (DBA)

Thesis Advisors: