CR Vol. 15, No.

1,2005

MANAGERIAL IMPLICATIONS OF TARGET COSTING

by Marilyn M. Helms, Lawrence P. Ettkin, Joe T. Baxter, and Matthew W. Gordon

EXECUTIVE SUMMARY The target costing method works "backward" from traditional cost-plus methods and begins with a targeted sales price for a product. This price is set based on what the customer is willing to pay. It considers not only the preferred current selling price but also the later life cycle pattern of prices. This technique has key managerial implications. This article considers these implications along with implementation guidelines. Examples of industries successfully using target costing are included. Ongoing controversies concerning where the techniques can best be used are discussed. Further considered are international differences in target costing as well as challenges of global outsourcing along the supply chain. The article ends with implementation challenges, significance for practice, and suggestions for future research.

activity based cost management approach throughout the global supply chain. Target costing reduces costs by involving suppliers and manufacturers as contributors to the design process, thereby focusing the entire chain toward the overarching goal of eliminating costly waste, excess, and unevenness. The supply chain partners can also consider costs of reclamation and disposal of products after their useful life in a total, closed-loop life cycle costing model.

TARGET COSTING Most American and European firms have long used the traditional techniques of standard costing. In price-based target costing, a company sets a target cost through comparison of competitive products. They gather data on the market price and subtract their desired profit margin. This desired profit margin will almost always greater than the cost of capital but is infiuenced by macro environmental forces as well as shareholder goals. When the product being developed does not meet the target cost and profit, often it is not commercialized. While it may be important as a tool to those competing on delivery speed, quality, product fiexibility, or delivery reliability, the target costing technique is more useful to those manufacturers who mass produce a make-to-stock item in a competitive market in which customers are most sensitive to price and cost levels. Originating in Japan, target costing is used in over 80 percent of Japanese assembly companies (Kroli, 1997) and by 100 percent of Japanese car manufacturers (Boer and Ettiie, 1999). Komatsu, Olympus, Sony, Topcon, and Isuzu are also key users (Cooper and Slagmulder, 1997). Yet outside Japan, target costing receives very little publicity and is only used by 40 percent of US firms (Pierce, 2002). Selecting and Involving Suppliers Target costing is not just a cost reduction technique or control framework, but part of a comprehensive strategic profit management system including value analysis and value engineering. Implementing target costing within the supply chain required substantially more effort and discipline than using standard costing. All supply chain partners must find ways to reduce costs as they design, manufacture, and distribute components (Cooper and Slagmulder, 1999b). Once the selling price has been set, the manufacturer and entire supply chain must deduct their profit margins and determine the costs of the end product. Target costs for all components will

INTRODUCTION Mergers, acquisitions, and consolidations continue to change the scope and size of many firms. While larger companies benefit from economics of scale and larger research and development departments, leading to lower production prices, the consolidation and increased merger activity brings disadvantages as well. The key disadvantage is competition from both domestic and global players with differing production and delivery costs. The dilemma for manufacturers is to match the lower prices of the global competition and still offer the highest quality products customers demand. Target costing may serve as a solution when developing new products, minimizing costs through the optimal use of all resources along the entire supply chain (Ahmed, Berry, Cullen, and Dunlop, 1997; Zsidisin and Ellram, 2001; Lockamy and Smith, 2000; Welfle and Keityka, 2000; and Shank and Fisher, 1999). Lockamy and Smith (2000) agree target costing focuses less on cost and considers customer requirements to be the primary cost driver. Cost is seen as a result of the process whether focusing on a price-based approach, a value-based approach or an

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also be determined. Since reaching the target cost is a joint effort of the entire supply chain, the pressures of reaching the target cost must be understood and communicated throughout the chain. The amount of coordination needed to set a target cost is very time consuming and demands information sharing and teamwork. The initial process of squeezing suppliers for immediate cost savings is losing credibility and today's acceptable practice is to share cost reductions in a long-term framework. Design Modifications The aim of target costing is to look at all possible ideas for cost reduction when designing a new product. Work is concentrated at the product planning, research and development, and the prototyping phases of production (Ahmed, Cullen, and Dunlop, 1997 and Laseter, 1998). The costing process requires a comprehensive information system and cross-functional involvement, since as much as 80 to 95% of a product's costs are committed at the design stage (Pierce, 2002 and Cooper and Slagmulder, 1999a). Outsourcing In target costing, firms must analyze their technology, their organization, and their sfrategy for a better understanding of their identity, core competencies and how they really add value. Only then is it easy to trim away the non-essential activities or outsource them or transfer the tasks to others in the supply chain with competencies in the particular areas (Mourisen, Hansen and Hansen, 2001). Global outsourcing may also be necessary for cost efficiently assembling the newly designed products (Waters, 2000) and it has enhanced firm's productivity, particularly in service like software programming which has largely been outsourced to India (Porter, 2004). While outsourcing is a popular cost reduction technique to offload activities deemed to be non-core, it has come under intense debate in the US and Europe as many see key jobs lost to lesser developed countries. Where low-skilled manufacturing jobs were once exported to Mexico, the trend is to export more high-skilled technical jobs to India, China, and other parts of Asia and Eastern Europe where wages are lower. Experts agree hightech jobs are easier to export than factory work and can save companies from 60 to 80 percent of costs (Calbreath, 2004). A McKinsey & Company survey of senior executives around the world found 80 percent of executives in Europe, Asia and the United States said outsourcing was good for the global economy, but when asked about the effects of outsourcing on their own businesses, 70% of Europeans, 86% of Asians, and 97% of Indian managers agreed the effects were positive but in the US, only 58% of the executives agreed (Porter and Bayot, 2004). While companies agree outsourcing has reduced costs by delegating non-core functions to more specialized and efficient providers, the backlash has also concerned foreign companies who are establishing a presence in the US (Solomon and Chemey, 2004). Other challenges of outsourcing are determining the specific expectations for outsourcing firms and the costs involved in monitoring suppliers (Quelin and Duhamel, 2003 and Natovich, 2003). Barthelemy and Adsit (2003) found other outsourcing challenges were deciding which activities to outsource, selecting a vendor and preparing a contract, maintaining control over the outsourced activity, and determining an exit strategy. Involvement and Continuous Improvement When using target costing, the entire supply chain is seen as an integrated whole. Each element refines its operations to reduce its own costs, and therefore, reduces the total overall cost of the final product. The chain must also assist in lowering the costs of the other links. Many times a supplier of a component part will have trouble reaching its target cost. At this point they may ask a chain partner for help on lower their costs. One way to manage the supply chain effectively once it is in place is to use specialized supply chain software (Trommer, 2002).

EXAMPLES IN PRACTICE AND INDUSTRY SUCCESSES In the past, researcher's lists of successful companies and industries adopting target costing included Toyota, Nissan, Sony, Matsushia, Daihatsu, Canon, Olympus Optical, and Komatsu and later added non-Japanese companies including Mercedes, Goodyear, Rockwell, Texas Instrument, DaimlerChrysier, and the North Sea oil industry (see for example Cooper and Slagmulder, 1997; Knott, 1996; and Tanaka, 1993). Nicolini, Tomkins, Holti, Oldman, and Smalley (2000) added the UK construction sector while Ellram (2000) included the semiconductor, automotive, and electronic equipment industry as well as the computer peripheral, consumer products, and aerospace original equipment manufacturers as participating in the target costing processes. Ellram (2000) found organizations had multiple objectives for implementing target costing including reducing costs, understanding the supplier's cost structures, improving internal cost management.

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improving cost monitoring, and increasing cost accountability. Swenson, Ansari, Dell, and Kim (2003) surveyed US firms to identify best practices in target costing and found Boeing, Caterpillar, DaimlerChrysier, and Continental Teves (an automotive brake supplier) to be leaders in implementing the process. Shared target costing principles included: price-led costing, a customer and design focus, cross functional and value-chain involvement and a life-cycle orientation to price and costs. Companies excelled using the target costing enablers of value engineering or analysis, design for manufacturing, effective organizational structures, streamlined development processes, and actively engaging the supply chain (Nicolini, Tomkins, Holti, Oldman, and Smalley 2000). Swenson et al. (2003) agree industries with the shared characteristics of intensive competition, extensive supply chains, and long product development cycles best benefit from the techniques of target costing. Target costing is finding success in transportation and heavy equipment industries, the entire auto industry, electronics, oil, Pharmaceuticals (Banham, 2000) and agricultural machinery manufacturers (McNair and Poiutnik, 2001). Other companies with target costing success include IBM's Information Product Division spin-off of Lexmark International (Chen and Chung, 2002), Eastman-Kodak, Micrus Semiconductors, Honda of America, and Boeing (Banham, 2000). The CFOs of these latter companies support the cross-functional involvement of design, marketing, procurement, logistics, and finance on talking with the customer. A key reason for this joint communication is to reduce the engineering and design changes. Once a design is developed, costs are allocated to each component based on function importance, supplier price, and logistic and freight-related cost. Assessing competitors' costs is also performed by reverse engineering their competitor's products. If a firm can not meet the customer's price, they further reengineer the product by changing material composition, changing the production process, or negotiating with suppliers. With strong supplier support, cycling through this process to reduce costs can be successful. Hibbets, Albright, and Funk (2003) studied a link between the competitive environment and whether specific environmental forces along with firm strategy can predict a firm's decision to adopt target costing. They sampled target costing adopters and surveyed managers about the firm's environment and strategy and found product differentiators (see Porter, 1985) are more likely to implement target costing than those following cost leadership or a confrontational strategy. When competition is strong among the competing sellers as the suppliers have power to impose pricing conditions, target costing was found be to useful, particularly in the presence of global competition. Dekker and Smidt (2003) found assembly firms in a competitive, unpredictable environment were more likely to use target costing in the Dutch firms surveyed. Hergeth (2002) studied target costing and found it more appropriate for assembly industries, yet he concluded the method could be used successfully in process industries. He cited the textile industry and concluded target costing is both promising and could be an important tool for the textile industry as well as the price-sensitive apparel market.

BARRIERS Target costing has a number of implementation challenges. Banham (2000) quotes the Senior Manager of Finance at Boeing and agrees implementation barriers include: lack of understanding in corporate America (in fact the term is not well known and much of the Japanese literature on "drifting cost" has not been translated); cultural barriers against cross-functional cooperation; organizational barriers to team oriented work (difficult to achieve in a functional structure); and a perceived irrelevance about the effects. Still other barriers may include the organizations information systems and its lack of total system integration. To share cost reductions, supply chain partners must be able to share initial cost and production data. Lack of Understanding or Relevance Nicolini, Tomkins, Holti, Oldman, and Smalley (2000) agree the target costing concept as Japanese in origin. The Japanese name for the process Genka Kikaku expresses an overall strategic approach to cost reduction. Even the continuous improvement or "kaizen costing" is very much a Japanese approach that has found common usage in quality literature yet the approach to costing is not a mainstream business term. The shortening life cycles make the development, planning, and other phases of a product critical to understanding its costs (Choe, 2002). While target costing has a straight forward logic, the implications in practice are more difficult, particularly when the culture has previously embraced a cost-plus approach to pricing. The costplus approach is often quicker and does not involve an iterative, inclusive approach to reducing the gap between current costs and target cost as in target

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costing. The cost-plus approach also does not have a strong market orientation that is a prerequisite for target costing. The term too is seen as limited to the accounting domain and traditionally accountants have not been used to implement production changes, even though they have access to the cost data. In addition to costs, firms must understand what consumers really want and are willing to pay for. In the traditional approach to product development and cost-plus pricing, the result is an array of over engineered products that do not meet the customer's needs and are incorrectly priced. Burscher and Laker (2000) call this flawed process an "inside-out" approach and argue the cost of the product can not be established until the final product is ready to be launched. In addition to greater understanding of target costing, the authors urge for implementation in the initial stages of product development where modifications can be made cheaper and easier. Team and Cross-Functional Barriers The logic of target costing is easy to understand, yet a number of industries continue to use the prevailing cost-plus approach. This may be due in part to lack of understanding of costs throughout the supply chain and not having tightly linked, communicating supply chain partners. Workers will learn faster and better understand costs and the organization as a whole will adopt target costing as information flows faster and with a greater frequency of reporting. Zsidisin, Ellram, and Ogden (2003) agree the ability for all individuals to fully participate in cost management activities can lead to the development of valuable knowledge. They urge, however, the process takes an extensive degree of time and commitment. Target costing, implemented correctly, will engage all the key functions in the organization. They further assert the cross-functional teams formed between purchasing and supplier organizations can help reduce supply chain costs. When using target costing within the supply chain, the importance of trust and cooperation is crucial. Transferring previous in-house functions to partners or outsourcing can be a risk due to the inability to monitor or control the output of the desired function. When functions are performed at the manufacturer's plant, expectations and standards are communicated and understood, but these communications are often lost when the function is transferred to one of the partners in the chain. One way to control this problem is by the placement of one of the manufacturer's employees within the supplier's plant to monitor and aid the activities ofthe supplier.

Even the US Air Force can benefit by the use of target costing in their procurement process which would enable smaller suppliers to participate effectively as subcontractors. The article stresses the use of target costing as a way to build the long-term relationships necessary for small supplier development, and developing small suppliers is a legislative mandate of the U.S. federal govemment ("Paper Chase," 2003). Irrelevance or Fear ofthe Effects To many managers, target costing sounds like another buzz word or accounting term with little relevance to manufacturing or marketing. Yet, the concept of target costing is identical to the lean concepts implemented in manufacturing to reduce non-value added, irrelevant activities that do not contribute to a product's value. These terms, in practice, are attempting to reach a similar end. Quality, sole sourcing, and reducing wastes are part of a life cycle of continuous improvement of which target costing is an important component. Tinkler and Dube' (2002) support the use of target costing, activity-based planning, value chain analysis, and internal business processes combined in one system or integrated management framework. They agree these techniques provide weapons to be successflil but also provide the guidance systems to maneuver in the complex world of business. Target costing also has costing and profit implications internally as firms set transfer prices among divisions (Chen and Chung, 2002). On the fear side, cost setting negotiations must take place and often one or more groups feel they are shouldering too much of the cost reduction pressure, particularly smaller partners with less power within the chain. Design changes and cost cutting measures may even cause employees to fear for their jobs and work against the target costing process. This is overcome through training and ongoing education about the process and its importance and working to ensure job security as possible. Production Detail In target costing, the design process must be broken down into its lowest level components. For example an automobile manufacturer must chart the entire production process and go through a product's complete, lowest-level, bill of materials to uncover areas for improvement - connections that can be made with two screws instead of four, parts that would meet engineering specifications with one weld instead of three, parts that could be installed without painting them first - and many other ways to save a processing step. This detail requires the hands-on involvement of manufacturing, design engineering.

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product engineering and marketing. While the concept of target costing is intuitively and seemingly simple, the implementation and execution is very difficult. Minor changes, not major innovations, are the goal. MIS and Accounting Cost Data Limitations Information systems are evolving, but too slowly, from a traditional view of internal cost accounting measuring cost centers in predetermined accounting periods. They must move faster to a market-driven system starting with the customer. Choe (2002) examined the organizational leaming effects of information provided by management accounting information systems using advanced manufacturing technology. The study found target costing systems and the quick reporting of information facilitated learning. In fact, the study further suggests under a high level of advanced manufacturing technology, a target costing system must be introduced and information should be provided frequently and quickly. This information or organizational leaming support system is a requirement for improvement and encompasses accounting information, planning, control, production, and meeting budgets, forecasts, and performance standards. Thus the information is a facilitator of corporate leaming. Choe (2002) further suggests management will require a different accounting information system than those in more traditional environments used to control mass production. The new information must be adjusted to satisfy diverse information needs of managers and include non-financial measures as well. Kulmala, Paranko, and Uusi-Rauva (2002) agree a company should know the costs of its own operations and should share part of the cost information with cooperating firms in an open information network. They caution that few firms know the full costs of each product and stress the ability to cost new activities depends on mutually accepted accounting practices among the suppliers in the supply chain. Brewer (2000) agrees while target costing has gained prominence within business organizations, the traditional management accounting practices of standard costing and contribution margin analysis continues to predominate. He further calls for a new approach to organizing a management accounting curriculum to cover such topics as target costing, along with activity based costing, and a balanced scorecard approach of examining both quantitative and qualitative costs in a systematic, activity-oriented approach. This curriculum change is needed to meet the changing marketing place which is more global and is experiencing deregulation and advances in information technology along with a customer focus and constant change. Castellano and Young (2003) agree target costing exercises need to be better integrated into the classroom.

IMPLICATIONS FOR MANAGEMENT Today supply chain partners are selected before product development, regardless of whether target costing is used. When choosing a supply chain partner, the costs of the supplier are rarely the deciding factor. Relevant factors are reliability, cooperation, ability to produce quality parts, the number of engineers and design experts employed, and reputation within the industry for service and dependability. It is very important for these factors to be carefully examined by the manufacturer because the suppliers will be included in every decision throughout the development of the new product and beyond. To aid in selecting the right supplier, manufacturers ofren institute a qualifying or certification program. Suppliers, who qualify, can be assured a long-term contract with the manufacturer. Carefully choosing the right supply chain partner makes the difference in whether the target cost is reached or not. A bad choice can be disastrous and conversely a good partner can be a tremendous asset. Some of the benefits of properly implementing target costing within the supply chain include selecting the most appropriate product development and process technologies, minimizing the complexities of product-lines, eliminating cost overruns, limiting design problems and delivering the lowest priced, highest valued product to the final customer (Laseter, 1998). Other trends include value engineering, parts standardization, and a sharing of knowledge along the supply chain. Chrysler's SCORE program (Supplier Cost Reduction Effort) is an example of a firm working closely with suppliers for cost savings. Suppliers benefit from long-term contracts and have a reduced risk of emergency demands for price reductions (Pierce, 2002). Research at the University of Birmingham (UK) found the use of target cost contracts is increasing and studies found share profiles vary with the amount of production (Broome and Perry, 2002). If the design team has difficulty meeting a target cost, a systematic approach can be taken. First, it may be important to review the target cost to determine if the cost can be raised or if margins can be reduced. The next step is to review the manufacturing process for a possible modification or relaxation of product functionality requirements. It may be useful to make improvements in the machinery tooling to meet target costs. Another avenue is to reduce supplier costs.

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The last altemative may be abandoning the project (Creese, 2000).

DISCUSSION AND AREAS FOR FUTURE RESEARCH Although target costing is more time intensive than the traditional methods of cost-based pricing; manufacturers can be assured prices will be in line with customer expectations. As the examples in practice illustrate, time is also needed to bring all costs throughout the supply chain to acceptable levels. From a strategic perspective on new product development and implementation, costs must be developed quickly and products introduced before customer's tastes and needs change. Costing must also occur early in the developmental stages of a product while designs are easy and less costly to change. Intemally, coordination and involvement of financial and accounting professionals is needed to implement target costing as is close monitoring of marketing and quality control throughout the entire process in order to be a success. Areas for future research include extensive reviews of companies implementing target costing. Organizing this literature into theory-building can help practitioners identify the process order and other implementation challenges as well as ways to overcome them. In the academic arena, the topic needs broader coverage in textbooks, particularly and simultaneously in cost accounting, production and operations management, design and project management, and supply chain management. Cases for discussion warrant inclusion in these textbooks and other ancillary educational material to better train the next generation of managers in target costing. Even a target costing game or role playing exercise among supply chain members could be developed to illustrate the process.

REFERENCES Ahmed, A., Berry, T., Cullen, J. V., & Dunlop, A. (1997, November). The consequences of inter-firm supply chains for management accounting. Management Accounting, 75(10), 74-75. Banham, R. (2000, May). Cost optimization: Off target? CFO, 127-130. Barthelemy, J. & Adsit, D. (2003). The seven deadly sins of outsourcing. The Academy of Management Executive, 17(2), 87-100.

Boer, G. & Ettlie, J. (1999, July). Target costing can boost your bottom line. Strategic Finance, 81(1), 49-52. Brewer, P. C. (2000, May). An approach to organizing a management accounting curriculum. Issues in Accounting Education, 15(2), 211-234. Butscher, S. A. & Laker, M. (2000, summer). Market-driven product development. Marketing Management, 48-53. Broome, J. & Perry, J. (2002, January). How practitioners set share fractions in target cost contracts. International Journal of Project Management, 20(1), 59-66. Calbreath, D. (2004, April 4). Outsourcing sends San Diego's high skilled, high-wage jobs in India, China. Knight Ridder Tribune Business News-Washington, 1. Castellano, J. F. & Young, S. (2003). Speed splasher: An interactive, team-based target costing exercise. Journal of Accounting Education, 21(2), 149-159. Chen, R. C , & Chung, C. H. (2002, winter). Causeeffect analysis for target costing. Management Accounting Quarterly, 1 -9. Choe, J. M. (2002, June). The organizational leaming effects of management accounting information under advanced manufacturing technology. European Journal of Information Systems, 11(2), 142-150. Cooper, R. and Slagmulder, R. (1997). Target costing and value engineering. Portland, Oregon: Productivity Press and Montvale, NJ: The IMA Foundation for Applied Research, Inc. Cooper, R. & Slagmulder, R. (1999a, summer). Develop profitable new products with target costing. Sloan Management Review, 40(4), 23-33. Cooper, R. & Slagmulder, R. (1999b, March). Supply chain management for lean enterprises: Interorganizational cost management. Strategic Finance, 80(10), 15. Creese, R. C. (2000). Cost management in lean manufacturing enterprises. AACE International Transactions, C5A. Dekker, H. & Smidt, P. (2003). A survey of the adoption and use of target costing in Dutch firms. International Journal of Production Economics, 84(3), 293-299. Ellram, L. M. (2000, Spring). Purchasing and supply management's participation in the target costing process. Journal of Supply Chain Management, 36(2), 39-45.

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Kulmala, H. I,, Paranko, J., & Uusa-Rauva, E. (2002, September). The role of cost management in network relationships. International Journal of Production Economics, 79(1), 33-44. Hergeth, H. (2002). Target costing in the textile complex. Journal of Textile and Apparel Technology and Management, 2(1 V), 1-10. Hibbets, A. R,, Albright, T, & Funk, W. (2003), The competitive environment and strategy of target costing implementers: evidence from the field. Journal of Managerial Issues, 15(1), 65-81, Knott, T, (1996), No business as usual. London: B,P. Education. Kroli, K, M, (1997, June 9). On target, improving profitability through target costing. Industry
Week, 246(11), 14.

Laseter, T, M. (1998, March 12). Supply chain management: The ins and outs of target costing. Purchasing, 124(3), 22-25. Lockamy, A, HI & Smith, W. I. (2000). Target costing for supply chain management: Criteria and selection. Industrial Management & Data Systems, 100(5), 210218, McNair, C, J. & Polutnik, L. (2001). Cost management and value creation: The missing link. The European Accounting Review, 10(1), 33-50. Mourisen, J,, Hansen, A. & Hansen, CO, (2001, June), Inter-organizational controls and organizational competencies: Episodes around target cost management/functional analysis, and open book accounting. Management Accounting Research, 12(2), 221-244, Natovich, J, (2003, December). Vendor related risks in IT development: A chronology of an outsourced project failure. Technology Analysis & Strategic Management, 15(4), 409-149, Nicolini, D,, Tomkins, C , Holti, R., Oldman, A. & Smalley, M, (2000), Can target costing and whole life costing be applied in the constmction industry? Evidence from two case studies, British Journal of Management, 11, 303-324, Paper Chase: USAF studies small-supplier access. (2003, June) Purchasing B2B, 11-14, Pierce, B, (2002, April), Target cost management: Comprehensive benchmarking for a competitive market. Accountancy Ireland, 34(2), 30-33,

M, E, (1985). Competitive advantage: Creating and sustaining superior performance. New York, NY: The Free Press. Porter, E. (2004, February 15). The nation - case study: Cellphones; The bright side of sending jobs overseas. The New York Times, Section 4, Page 3, Column 1. Porter, E. & Bayot, J. (2004, March 6) Outsourcing is becoming a harder sell in the U.S. New York Times, C2, Quelin, B, & Duhamel, F, (2003, October). Bringing together strategic outsourcing and corporate strategy: Outsourcing motives and risks. European Management Journal, 21 (5), 647661. Shank, J, K, & Fisher, J. (1999, fall) Case study: Target costing as a strategic tool. Sloan Management Review, 41(1), 73-82. Solomon, J, & Chemey, E, (2004, April 1). A global joumal report: Outsourcing to India sees a twist. Wall Street Journal, A2. Swenson, D,, Ansari, S., Bell, J., & Kim, I. (2003, winter). Best practices in target costing. Management Accounting Quarterly, 4(2), 12-17, Tanaka, T. (1993, spring). Target costing at Toyota. Journal of Cost Management, 4-11. Tinkler, M. & Dube', D. (2002, September), Strength in numbers: ABC integrated with activitybased planning and budgeting can create major benefits for a whole organization. CMA Management, 14-17. Trommer, D. (2002, September 2), Supply chain software grows up. EBN, 22. Waters, J. (2000, December), 10 trends affecting the corporate environment. Facilities Design & Management, 19(2), 14, Welfle, B, & Keltyka, P. (2000, January-March). Global competition: The new challenge for management accountants, Ohio CPA Journal, 59i]), 30-36. Zsidisin, G, A, Ellram, L, M,, & Ogden, J. A, (2003). The relationship between purchasing and supply management's perceived value and participation in strategic supplier cost management activities. Journal of Business Logistics, 24(2), 129-154, Zsidisin, G, A, and Ellram, L, M, (2001), Activities related to purchasing and supply management involvement in supplier alliances. International Journal of Physical Distribution and Logistics Management, 31(9), 629-646,

Porter,

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Marilyn M. Helms is Sesquicentennial Endowed Chair and Professor of Management at Dalton State College in Dalton, GA. Lawrence P. Ettkin is Marvin E. White Professor and Head of Management and Marketing at University of Tennessee at Chattanooga in Chattanooga, TN. Joe T. Baxter is Associate Professor of Management Information Systems at Dalton State College in Dalton, GA. Matthew W. Gordon is an Accountant at Eaton Cutler-Hammer in Cleveland, TN.

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