Introduction

The modern manufacturing organization faces a highly agile and fluid business environment. Effective cost management is crucial in order to survive in this environment. Yet, there is broad agreement that managerial costing systems often fail to live up to their purpose of providing effective cost management information. Failure is often attributed to the inefficient design of a managerial costing system, or due to a focus on generating information for external reporting, or an inadequate understanding of organizational operations and the environment in which they operate. To enable effective managerial costing systems, an argument could be made for building such systems on three pillars, namely, an integrated understanding of the concepts of systems thinking, business process analysis, and cost accounting. This introductory chapter makes a case for using a research approach based in the design sciences when developing effective managerial costing systems that can contribute to effective managerial decisions.