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Savings Measurement for Capital Equipment Purchasing : Challenges and Conceptual Model
Journal
International Journal of Productivity and Performance Management
ISSN
1741-0401
ISSN-Digital
1758-6658
Type
journal article
Date Issued
2013-06-01
Author(s)
Hofmann, Erik
Abstract
Capital equipment purchasing (CEP) exerts a significant influence on purchasing success. Savings measurement plays an important role in evaluating CEP projects. However, savings measurement for CEP faces some special challenges. We contribute to the existing research in performance measurement and management accounting in purchasing. In this analysis, three case studies describe how companies measure savings for CEP and the challenges they face. We identify six procedure- and seven behavior-specific challenges. Procedure-specific challenges in savings measurement for CEP primarily address topics concerning components and calculation methods, while behavior-specific challenges mainly involve manipulation, trust and judgment. A discussion of the identified challenges referring to the literature on purchasing performance measurement, savings measurement, purchasing organization and behavioral management accounting leads to a preliminary conceptual CEP savings measurement model. Our formulated propositions state that savings measurement for CEP is influenced by internal and external determinants and affects CEP's performance, manipulation and trust, as well as the judgment of CEP's savings measurement results. The managerial implications of our research concern a successful design and process of savings measurement for CEP.
Language
English
Keywords
savings measurement
capital equipment purchasing
challenges
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Emerald
Publisher place
Bingley UK
Volume
62
Number
5
Start page
490
End page
513
Pages
24
Subject(s)
Division(s)
Eprints ID
222328