Behavioral Aspects of Cost Management

Economic results of a company mostly depend on proper cost management that determines its competitive position. The condition for an effective cost management is possession of information provided by cost accounting. The nature and scope of information regarding costs depend on the chosen model of cost accounting. Therefore, an economic entity should attempt to create such a cost accounting model that will ensure not only the fulfillment of duties resulting from the provisions of the Accounting Act, but also the provision of information necessary for decision-making. However, the shape of cost accounting model, information about costs and managing them are all influenced by human behavior. The aim of the chapter is to present the areas of influence of behavioral factors on effective cost management, especially on planning and controlling costs. Therefore, the following topics are presented in the chapter: Design of a cost accounting model supporting the decision-making process in the context of behavioral interactions. Impact of the selected model on management usefulness of information on costs—with respect to the behavior of people working in accounting. Choices in decision-making as part of cost management, especially in the field of cost planning (budgeting). For the purpose of the chapter, the following methods are used: literature analysis, source analysis method, as well as inductive and deductive reasoning methods.