Systematic Study On Impact Of Service Characteristics On Cost Drivers With Reference To Telecommunication Services In India
Volume 3 - Issue 11, November 2019 Edition
[Download Full Paper]
Dr. Megha Mehta
service characteristics, service drivers, service strategy, cost driver, telecommunications services, structural equation model.
This study assesses the impact of service characteristics, viz. intangibility, inseparability, heterogeneity, perishability, on cost drivers of telecommunications services firms operating in an environment of increasing competition and customer expectations. Referring value chain, four cost drivers of telecommunications service provisioning are identified, viz. operating, marketing, employee, and capital expenditure. Responses to questionnaire on impact of service characteristics, competition and customer expectations on cost drivers are analysed using factor analysis. The analysis resulted in five factors, identified as structural cost drivers, viz. service drivers, service design, service positioning, customer service, and service capacity. The structural cost drivers are then analyzed using structural equation modelling. A statistically significant relationship of â€˜service driversâ€™ influencing â€˜service designâ€™ and â€˜service positioningâ€™, which in turn, affecting â€˜customer serviceâ€™ and â€˜service capacityâ€™ is observed. Observations and findings are summarised projecting service characteristics as leverage in creating value in an environment characterised by increasing competition and customer expectations.
 Anderson, S. W. (2006). Managing costs and cost structure throughout the value chain: research on strategic cost management. Handbooks of Management Accounting Research, 2, 481-506.
 Annual Report 2014-15, Bharti Airtel Ltd.
 Annual Report 2014-15, BSNL.
 Annual Report 2014-15, Ideal Cellular Ltd.
 Atkinson, A.A., Balakrishnan, R., Booth, P. and Cote, J.M., (1997). New directions in management accounting research. Journal of management accounting research, 9, p.79-108.
 Banker, R. D., & Johnston, H. H. (2006). Cost and profit driver research. Handbooks of Management Accounting Research, 2, 531-556.
 Barkus, E., Yavorsky, C., & Foster, J. (2006). Understanding and Using Advanced Statistics. Sage Publications.
 Blocher, E. J., Stout, D. E., & Cokins, G. (2010). Cost management: A strategic emphasis. Includes index. McGraw-Hill/Irwin, 5th edition.
 Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long range planning, 43(2-3), 195-215.
 Chea, A. C. (2011). Activity-based costing system in the service sector: A strategic approach for enhancing managerial decision making and competitiveness. International Journal of Business and Management, 6(11), 3-10.
 Cokins, G., & CÄƒpuÅŸneanu, S. (2010). Cost drivers. Evolution and benefits. Theoretical and Applied Economics, 8(8), 7.
 Colin, D. (2001). Management Accounting for Business Decisions. Thompson Learning, 2nd edition, London.
 Cost Accounting Records (Telecommunication Industry) Rules, 2011.
 Ittner, C. D., Larcker, D. F., & Randall, T. (2003). Performance implications of strategic performance measurement in financial services firms. Accounting, organizations and society, 28(7-8), 715-741.
 Labro, E. (2006). 10 Analytics of costing system design. Contemporary issues in management accounting, 217.
 Faulkner, D. O., & Campbell, A. (Eds.). (2006). The Oxford handbook of strategy: A strategy overview and competitive strategy. Oxford University Press.
 Avlonitis, G. J., & Indounas, K. A. (2005). Pricing objectives and pricing methods in the services sector. Journal of services marketing, 19(1), 47-57.
 Govindarajan, V., & Govindarajan, S. (1993). Strategic cost management: The new tool for competitive advantage. Simon and Schuster.
 Grant, R.M. (2008). Contemporary Strategy Analysis, 6th Edition, Blackwell Publishing Limited, pp. 223-239.
 Gruber, H. (2005). The economics of mobile telecommunications. Cambridge University Press.
 Coombs, H., Jenkins, E., & Hobbs, D. (2005). Management accounting: principles and applications. Sage.
 Johnston, R. 2015. Service Strategy. Wiley Encyclopedia of Management. 10:1â€“3.
 Johnston, R. (2015). Service Strategy. In Wiley Encyclopedia of Management (eds C. L. Cooper, S. Roden, M. Lewis and N. Slack).
 McGee, J. (2015a). Business Model. In Wiley Encyclopedia of Management (eds C. L. Cooper, J. McGee and T. Sammutâ€Bonnici).
 McGee, J. (2015b). Cost Strategies. In Wiley Encyclopedia of Management (eds C. L. Cooper, J. McGee and T. Sammutâ€Bonnici).
 Lewis, B. R. (2015). Service Design. In Wiley Encyclopedia of Management (eds C. L. Cooper, N. Lee and A. M. Farrell)
 KajÃ¼ter, P., & Kulmala, H. I. (2005). Open-book accounting in networks: Potential achievements and reasons for failures. Management Accounting Research, 16(2), 179-204.
 (2003). Campbell, A., & Faulkner, D. (Eds.), The Oxford Handbook of Strategy: A Strategy Overview and Competitive Strategy. : Oxford University Press,
 Kaplan, R. S., & Norton, D. P. (2001). Transforming the balanced scorecard from performance measurement to strategic management: Part I. Accounting horizons, 15(1), 87-104.