Management practice of material flow cost accounting and its discontinuance

Abstract

Material flow cost accounting (MFCA) is a method that simultaneously promotes reduction of costs and environmental impacts through the improvement of resource efficiency. Many studies have argued the usefulness of MFCA, as it helps in the visualization of loss. However, it has not been widely used by companies, and there is a gap between claims about its usefulness in academia and its usage in practice. Therefore, this study aimed to explain this gap by focusing on the perspective of MFCA discontinuance, as well as to reveal the style of MFCA that is used by companies that have been employing this method. A questionnaire survey was conducted among companies that had introduced MFCA. The results of an analysis of 27 Japanese companies indicated that only a small number were using MFCA over a long period. The data showed that there were several differences in the style of MFCA usage between firms that stopped using it after a short period of time and those that used it continuously. This study contributes to the literature by analyzing the diffusion of environmental management accounting from the perspective of discontinuance and by providing evidence of the relationship between the style of using MFCA and discontinuance.

Keywords

• MFCA
• Discontinuance
• Diffusion
• Implementation process