The Rationale behind Costing Systems

Between the two extremes of works devoted to the technique of calculation exclusively, and works that focus on the use of costs for decision-making, the present work is structured around the why and the wherefore of the costing system. Several authors have studied the reason why, and have given a more or less lengthy set of answers. Others have tried to find in history an answer to the why, coupling it with the question of the when. The problem of the when and its inevitable quarrels about anteriority are of little interest to me. If one takes an interest in a firm, the when is to be found in its own life, not over a period of history, even if one takes into consideration corporate factors characterizing the environment of the time. If one asks oneself this question at the level of the population of businesses, does one look for the first or for a significant adoption threshold? I will therefore take up the reason why in a timeless manner, the objective being at once to convey information concerning the reason for adoption of a costing system by an organization, and to make clear the reason for change in common practices of organizations. To my way of thinking, these interconnected reasons tie up with three major objectives that relate to resources management, interaction with the environment and orienta­tion of the behaviour of the major players. These points will be taken up one after the other.