Implementing standard costing with an aim to guiding behaviour in sustainability orientated organisa

Abstract

Succeeding environmental cost accounting's evolutionary development, cost accounting oriented to sustainability now turns to a greater consideration of social costs. With this turn, in addition to ecology and economy the third major factor in a sustainability program, a factor that has been ignored, now becomes accessible to cost accounting. Yet, an innovative, sustainabilityoriented cost accounting must also support the dynamics of traditional cost accounting systems in their development toward cost management with appropriate instruments. Changing environmental factors require that cost accounting undergo a change from a centralised system to a decentralised concept of control. Systems strongly influenced by Taylorism and based on the division of labour cannot do justice to the increasing dynamics of the market. The literature on management has already shifted its emphasis from hierarchical control to more up-to-date mechanisms of control and coordination such as 'intrapreneurship'. Here, the success of an organisation is directly connected to the success of its employees and departments. Only to the extent that employees can and do become active in an entrepreneurial sense can the organisation achieve economic success. This entails more flexible work schedules, more comprehensive development of personnel, less obtrusive management at the higher levels, and the utilisation of autonomous organisational units through innovative approaches to cost accounting and control. This article focuses on examining the standard costing approach in the light of sustainability. It will introduce a programmatically necessary, dynamic concept of environmental and social costs. This concept-to be distinguished from the references to "external costs" prevalent in the current literature-facilitates guiding employees toward social and ecological goals. Thus, employees in decentralised systems can effectively help reduce ecological and social costs or can increase their efficiency.