Domestic Inflation, Cost Management and Control: A Successful Experience at a Brazilian Multinational
DOI:
https://doi.org/10.17524/repec.v12i1.1642Keywords:
Management control and accounting system, Cost management and pricing, Internal inflation, Multinational corporations (MNCs), Emerging marketsAbstract
Objective: Analyze the contributions of internal inflation dimensioning to the cost management and control and pricing strategies in a Multinational Corporation (MNC). Method: A specific approach was developed to calculate the own price index (OPI), based on a quantitative and qualitative case study with a descriptive approach in a worldclass MNC. Results: Based on the management strategy and control theories, it could be concluded that (i) the MNC benefitted from using a specific method instead of traditional market inflation rates; and that (ii) the OPI was a management control and accounting tool capable of equipping the company, differentiating the organization in price negotiations in its respective production chain. On the whole, (iii) the importance of effectively using the OPI was noticed for the sake of in-depth knowledge, accounting treatment, control and proper management of the company’s costs, establishing a pricing policy in line with its strategic objectives. Contributions: Besides the originality of the research, deriving from the lack of studies on internal inflation in the context of MNCs, the study broadens the theoretical knowledge on the theme, also evidencing the role of OPI as a cost management and control and pricing tool in MNCs – a matter of interest to most companies, experts and society, in function of the relevance of this type of company for the economy and the market.References
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