A managerial accounting framework for the performance measurement and management of profit and cost centers of food – retailing organizations in dynamic environments

Abstract

The present thesis develops an operational efficiency managerial accounting framework for retailing networks in dynamic environments. The research is motivated by the fact that during adverse economic conditions, retailers focus on improving the operations of their stores, making operational efficiency a strategic priority for them. Also, when the economic environment gradually begins to improve, the management needs the appropriate measurement tool to properly evaluate the efficiency effects of alternative growth modes implemented, either through the opening of new stores or acquiring other store networks under a merger and acquisition (M&A) strategy. The benchmarking analysis based on the advanced bootstrapped DEA tool, is motivated and illustrated utilizing a unique set of micro-data on 106 retail stores of a representative Greek Super Market (S/M) retailing network that operated under a highly recessionary and competitive environment, undertaking a systematic monthly-based analysis over two recessionary years (2012-2013) with a gradual improvement of the operating environment the year after (2014). The proposed managerial framework with the joint use of bootstrap DEA, second-stage regression analysis, radar analysis and decision tree algorithm: a) locates properly the efficiently best and worst performers over time b) identifies the main sources of inefficiency c) proposes efficiency improvements at the operational and strategic level. Additionally, efficiency measurements in different dimensions (i.e. operational and profit) show that efficiency is unequally distributed over recession and between different types of store sizes (i.e., large stores being more efficient than small and medium ones) while higher operational efficiency tends to be related to higher profit efficiency. Also, the undertaken efficiency analysis during normal economic conditions provides evidence that compared to organic growth, M&A result in lower operational efficiency. The proposed performance managerial framework offers a managerial tool for evaluating the efficiency of S/M retailing networks in turbulent times while it provides significant managerial implications for growth purposes when economic conditions are normalized.

Description

Keywords

Management accounting, Efficiency, Food retailing network, Ηorizontal growth strategies, Dynamic environment, Key performance indicators kpi's, Decision tree algorithm

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