 Use of precedent and antecedent information in strategic cost managementMark Anderson, Ozer Asdemir and Arindam Tripathy Journal of Business Research, 2013, vol. 66, issue 5, 643-650 Abstract: Integral to strategic cost management is the choice of procuring flexible versus committed resources conditioned on demand uncertainty. Prior research shows that costs respond less to decreases than increases in sales activity when firms invest in committed resources. We analyze asymmetry in cost behavior to investigate how resource procurement decisions between flexible and committed resources are related to precedent and antecedent information about demand uncertainty. We find that the asymmetry of cost responsiveness increases with historical sales growth and with the firm's market-to-book ratio, and decreases with historical sales volatility. We find similar results for firm-specific deviations of sales growth, sales volatility and the market-to-book ratio from the industry averages. These results illustrate how managers might combine precedent and antecedent information in formulating a resource procurement plan as a means of strategic cost management. Keywords: Cost behavior; Strategic cost management; Sticky costs; Resource procurement; Flexible resources; Committed resources (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:66:y:2013:i:5:p:643-650 DOI: 10.1016/j.jbusres.2012.08.021 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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