To date the literature on management and management accounting within inter-organisational relationships has mainly focussed on managing the interface between the supplier and the buyer. In contrast to most previous research, this study examines the internal practices of a company engaged in inter-organisational relationships. It addresses the question of how intra-organisational management accounting practices affect the ability to conduct inter-organisational relationships. A qualitative case study is used to gather information from an electronics company. The company enters its inter-organisational relationships with the ambition of being in power in the relationship. However, due to inadequate management accounting practices, the company is unable to include cost information in its response to proposals made by its suppliers during negotiations. Consequently the cost aspect of the product fades away from the negotiations. The study concludes that an important role of management accounting is to reveal the intra-organisational cost consequences of proposals made by suppliers during negotiation processes. Thereby cost information becomes an integrated part of the counter-proposals generated and actively used during the negotiation process.
Inter-organisational relationships; management accounting practice; power
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7th Conference on New Directions in Management Accounting (EIASM), 2010