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  • July 1990 (Revised October 1997)
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  • HBS Case Collection

Siemens Electric Motor Works (A) (Abridged)

By: Robert S. Kaplan
  • Format:Print
  • | Pages:7
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Abstract

Explores how a cost system can help support a firm's decision to change strategies. In the process, the students are introduced to a simple activity-based cost system. Siemens Electric Motor Works found itself facing an increasingly competitive environment and so made a decision to move from mass production of specialty motors to the production of small lots of custom motors. In doing so, they found their old cost system led them to poor decision making. By switching to a simple activity-based system, more accurate product costs were computed, facilitating better divisional performance.

Keywords

Activity Based Costing and Management; Cost Accounting; Cost; Adoption; Cost vs Benefits; Management Analysis, Tools, and Techniques; Production; Business Strategy; Electronics Industry; Manufacturing Industry

Citation

Kaplan, Robert S. "Siemens Electric Motor Works (A) (Abridged)." Harvard Business School Case 191-006, July 1990. (Revised October 1997.)

About The Author

Robert S. Kaplan

Accounting and Management
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