Circular Design: The Role of Cost Precision and Management Control System
Keywords:
cost information, management control system, circular product designAbstract
This study investigates the effects of cost information precision and management control systems (MCS) on circular product design, focusing on their potential interplay in fostering sustainable innovation. Despite the increasing emphasis on sustainability in product development, the relationship between cost management practices and circular design remains under-explored. Employing a between-subjects experimental design, undergraduate accounting students served as surrogates for professional designers. Participants were exposed to two levels of cost precision (specific vs. relative) and two types of MCS (diagnostic vs. interactive). The analysis, conducted through ANOVA, revealed a significant interaction effect between cost information precision and MCS on circular design outcomes, approaching statistical significance. Specifically, the combination of specific cost information and interactive MCS showed promise in enhancing participants' circular product design scores. These findings underscore the importance of aligning cost precision with supportive management practices to promote environmentally conscious design choices. This research contributes to the literature on sustainable product development by highlighting the crucial role of management control systems and cost information in facilitating circularity, offering actionable insights for organizations aiming to innovate sustainably. The results pave the way for future investigations into the dynamics of cost information and control systems in driving sustainability initiatives within product development processes.
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Copyright (c) 2024 Dyah Ekaari Sekar Jatiningsih, Sheila Pavita Rahma, Baiq Tamy Cantika
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