¶ … 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...

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In addition to its impact on the workforce and managers, different cost accounting systems accomplish some goals better than others. In a comparison between activity-based costing (ABC) and traditional costing systems, ABC is considered more work-centric, while traditional costing systems are more transaction-centric. Also, the traditional cost system is both easy and inexpensive to implement, but the information obtained is inferior to that produced by ABC, which is in turn more expensive and time-consuming (Abdallah & Li, 2008).

SAP Enterprise Planning (ERP) provided a significant improvement over their traditional cost accounting system for the Brazilian firm America Latina Logistica (ALL), with few tradeoffs. Following strategic acquisitions and expansion, SAP ERP changed the culture of ALL's commercial units and produced improved metrics to assist in their decision making about underperforming contracts and routes (De Modesti & Eriksen, 2008).

For purposes of evaluating product mix decisions, Theory of Constraints (TOC) may provide superior results over ABC. Research indicates that TOC should be used for short-term production mix decisions in an environment where costs are predominantly fixed; ABC is best used to determine increases or decreases in capacity and products, along with other long-term decisions, because over the long-term, all costs tend to be variable. Lockhart and Taylor (2007) identified conditions under which TOC is always preferable.

Throughput accounting (TA) metrics are…