Approaching Material Flow Cost Accounting (MFCA) According To The Management Control System, Factors Affecting The Application Of MFCA In Businesses

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Prof. Doc. Nguyen Phu Giang

Abstract

The article presents a new approach to implementing Material Flow Cost Accounting (MFCA) in enterprises, by including MFCA in strategic goals of enterprises through Management Control System (MSC). We show the specific steps (stages) to apply MFCA through an MSC-based approach, points to pay attention to applying MFCA. The article also outlines the differences between enterprises applying MFCA and those not applying MFCA, factors affecting the application of MFCA in manufacturing enterprises.


Methodology – We conduct the univariate and multivariate regression analysis, using Kolmogorov-Smirnov, Mann-Whitney tests to see if there is any difference between the two groups of enterprises: applied MFCA and not applied MFCA. By synthesizing questionnaires, using correlation analysis techniques, and multivariate regression analysis, we determine and measure the influence of factors on the application of MFCA in selected enterprises. In addition, by the method of document synthesis, we have outlined the stages or the ways to implement MFCA in enterprises, methods to bring MFCA into the control system of enterprises.


Findings – Our research finds a new approach, which is the application of MFCA in enterprises through MCS and Levels of control (LOC), linking MFCA with MCS, integrating sustainability goals into management controls and corporate strategy. We conclude that the group of manufacturing enterprises applying MFCA are those with larger ROE and ROA. The type of business, EPS, ROA, ROE have significant differences between business applying MFCA and not applying MFCA. The article also shows the correlation and influence of factors on the application of MFCA.


Practical implications – Our research finds a new approach, which is the application of MFCA in enterprises through MCS and Levels of control (LOC), linking MFCA with MCS, integrating sustainability goals into management controls and corporate strategy.


Social implications - The article shows how to apply MFCA in enterprises. This is one of the measures to effectively use natural resources, contributing to sustainable development for businesses and society.


Originality/value – The article presents a new way to apply MFCA in enterprises by including strategic goals of enterprises through MCS and LOC.


Research limitations: Future research may focus on adapting the existing logic of the MFCA approach to the material loop manufacturing process.

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