¶ … accounting systems, their tradeoffs, and discusses the differences between countries in their approaches.
Each of the cost accounting systems discussed in the articles accomplishes some management goals better than other systems, but there are tradeoffs involved with each. Different nations approach their cost accounting systems differently due at least in part to differences within cultures. For instance, GPK is more suited to countries where the culture is one of uncertainty avoidance, one of the five dimensions of Hofstede's taxonomy. GPK offers the most uncertainty avoidance because there is relatively little ambiguity in the assignment of costs; GPK is characterized by narrowly defined cost centers and strict cost center criteria. Cultures such as Germany's are characterized by a management environment that includes highly skilled workers and technical expertise among managers. This is in contrast to the U.S. where workers tend to have more generalist skill sets and managers have been educated to manage a broader set of responsibilities (Portz & Lere, 2010).
Firms considering adopting GPK need to factor these cultural differences into their decision process. They need to consider whether firm managers can manage effectively with a narrower job focus and limited strategic or interdepartmental decision making under GPK; they should consider whether the focus on narrower tasks will be too confining or restraining or lacking in creativity. As Portz and Lere describe it, "Culture may be the main factor behind cost center practice differences directly and also indirectly through differences in the...
competing cost accounting approaches and explores best practices implemented in different countries. The essay examines traditional cost accounting (CA), activity-based costing (ABC), Grenzplankostenrechnung (GPK), throughput accounting (TA) and resource consumption accounting (RCA). Tradeoffs Between Cost Accounting Systems Comparing traditional costs systems and ABC shows that there are tradeoffs between cost and usability. The traditional cost system is typically both easy and inexpensive to implement; however, the information obtained from the system
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