What is cost consciousness according to management accountants

In his doctoral dissertation, MSc Santiago Velasquez argues that it is important to develop this understanding for a couple of reasons. On the one hand, given that one of the objectives of scientific writing is to clearly communicate knowledge among scholars, unclear notions can be considered as unwanted elements of scientific literature. On the other hand, and certainly more importantly, developing our understanding of cost consciousness can potentially provide interesting and insightful new windows for research.

The dissertation addresses the conceptualization of cost consciousness particularly from a management accounting perspective. In accomplishing this objective, the dissertation develops two interconnected exercises: (i) a conceptual exercise aiming to understand what cost consciousness is from the perspective of management accounting scholars; and (ii) a theoretical exercise analysing how cost consciousness could be driven in an organization. In addition, a case company is used to enrich the conceptualization of the notion and illustrate the way in which the formulation presented in this work could be used to analyse cases where the institutionalization of cost consciousness is of interest.

With respect to the conceptual exercise, Velasquez has rigorously identified and reviewed articles from management accounting related journals where the cost consciousness notion appears. From these, the definitions, interpretations, determinants and results which management accounting scholars have associated with cost consciousness have been identified and inferred.

The results underline the difficulty of defining the notion and the perception of cost consciousness as a holistic concept that encapsulates various forms of understanding and reflecting on cost related issues. Moreover, management accounting systems have been identified as elements which may play an important role in driving cost consciousness. Although the results of cost consciousness tend to be perceived as positive, the notion has also been associated with negative outcomes. With respect to the theoretical exercise, Velasquez’s work draws on the Burns and Scapens Framework (BSF) which is mainly based on Old Institutional Economics. Also, by considering the recent work by various scholars who have contributed and criticized the BSF, Velasquez provides an extension of the framework and a formulation which includes and replaces various elements that appear on the original BSF. The conceptual and theoretical exercises are interconnected because the identified and inferred definitions, interpretations, determinants and results, have been brought into the extended BSF to theorize on how cost consciousness could be institutionalized from a management accounting perspective.

The results of the dissertation are on a very conceptual level. From this respect, the dissertation serves as a comprehensive platform for various avenues of research on cost consciousness which could be based no more on hunches but on knowledge and better understanding. However, some practical implications may be drawn. For example, the results suggest that management information systems may play a very active role in the institutionalization of cost consciousness. However, these need to be considered within a mish mash of routines, powerful actors, and exogenous forces. In other words, it takes more than the installing of a particular budgetary or quality management system for cost consciousness to be successfully driven in an organization.

Public defence of a doctoral dissertation on Friday, 9 November

The doctoral dissertation of M.Sc. Santiago Velasquez "Cost Consciousness: Conceptual Development from a Management Accounting Perspective" will be publicly examined at the Faculty of Business and Technology Management of Tampere University of Technology (TUT) in room S4 in the Sähkötalo building on Friday, 9 November 2012 starting at 12:00.

The opponent will be Professor Marko Järvenpää (University of Jyväskylä). Professor Petri Suomala from the Department of Industrial Management at TUT will act as Chairman.

Santiago Velasquez is a Colombian researcher working at the Department of Industrial Management of TUT.

Further information: santiago.velasquez@tut.fi, +358 40 849 0227