Shannon W. Anderson
Professor
Research Expertise: Empirical analysis of quantitative and qualitative field-based data as well as survey data to study performance management and cost accounting in and at the boundaries of the firm (e.g., lean production, supplier performance management, customer profitability and lean consumption), integration of strategy, operations management and management accounting practices, and design of cost accounting systems, cost allocation mechanisms, and cost-based transfer pricing policy
Professor Anderson is an expert on the design and implementation of performance measurement and cost control systems. Her research spans the fields of management accounting and operations research. Anderson’s research has been funded by grants from professional accounting organizations such as the AICPA, the IIA, the IMA and CIMA, and from national research organizations such as the National Science Foundation and the Australian Research Council.
Anderson’s co-authored research on activity-based costing won the 2006 American Accounting Association’s Notable Contribution Award. She has won the AAA Management Accounting Section’s Notable Contribution to the Literature Award three times, in 2012, 2006 and 2003. Her research has been published by The Accounting Review; Accounting, Organizations and Society; Production and Operations Management; Management Science; Manufacturing and Service Operations Management; Accounting Horizons; and the Journal of Management Accounting Research.
She co-authored the award-winning book Implementing Management Innovations (Springer, 2001) and the textbook Fundamentals of Cost Accounting (McGraw-Hill/Irwin, 4th ed., 2014).
Anderson serves on seven editorial boards, including Accounting, Organizations and Society; the Journal of Management Accounting Research; Management Accounting Research. Previously she as served as associate editor or editor for The Accounting Review, Management Science, and Production and Operations Management. She has served on numerous committees for the American Accounting Association and the Management Accounting Section of the American Accounting Association.
Anderson held a a visiting faculty member appointment at the University of Melbourne from 2007 until 2013. She joined the Graduate School of Management faculty in June 2010. She also taught at the University of Michigan and at Rice University.
At the Graduate School of Management, she teaches courses in management accounting and control, and in strategic cost management.
She received a doctorate and master’s degree in business economics at Harvard University and a B.S.E. in civil engineering at Princeton University.
Shannon W. Anderson Awards
- Teacher of the Year, Notable Contribution to the Management Accounting Literature Award.
- Greatest Influence on Practice Award, American Accounting Association’s Management Accounting Section, “Management Control for Market Transactions: The relation between transaction costs, incomplete contract design and subsequent performance,” (with H. Dekker), Management Science, 2010.
- Class of 2007 Teaching Excellence Award, Jones Student Association, Rice University.
- Notable Contribution to the Management Accounting Literature Award, American Accounting Association’s Management Accounting Section, “Using Electronic Data Interchange (EDI) to Improve the Efficiency of Accounting Transactions,” (with W. Lanen),The Accounting Review, 2006.
- Wiess College Distinguished Faculty Associate, Conferred by the president of Rice University for distinguished service to an undergraduate college, 2006.
- IBM Best Paper Award Honorable Mention, Service Operations track of Production and Operations Management Society (POMS) Annual Research Conference, “Customer Satisfaction during Service Operations Failures: The role of attributions of blame,” (with S. Baggett and S. Widener), 2006.
- Best Paper Award, American Accounting Association’s Management Accounting Section Annual Research Conference, “Negotiated Goals and Pay-for-Performance: A field study investigation of how incentive compensation and goal negotiation affect financial performance,” (with H. Dekker and K. Sedatole), 2006.
- Notable Contribution to the Management Accounting Literature Award, American Accounting Association’s Management Accounting Section, Implementing Management Innovations: Lessons Learned from Activity Based Costing in the U.S. Automobile Industry (with M. Young), 2003.
Costly Control: An Examination of the Trade-off Between Control Investments and Residual Risk in Interfirm Transactions
Transaction cost economics predicts that investments in management control will enable risky interfirm transactions. Risk is rarely eliminated, because firms trade off costs of management control and expected costs of control loss (together, the “cost of control”). The solution typically comprises a mix of control investments with residual performance and residual relational risks. Transaction cost economics also predicts that the control-residual risk trade-off will vary with the cost of control.
Third-party Risk: How to Trust Your Partners
Q&A with Professor Shannon Anderson
Professor Shannon Anderson teamed with global researchers, and found that risk managers are bringing formal management techniques to corporate alliances, hoping to control for a laundry list of new threats to performance and reputation. But, in many cases, it still comes down to trust.
Evidence on the Cost Hierarchy: The Association between Resource Consumption and Production Activities
Professor Shannon Anderson
Co-Authors: K.L. Sedatole, Michigan State University, The Eli Broad College of Business
Can Data Mining Lead to Better Results in the Classroom?
Can using common accounting practices, like gathering data and using performance metrics, result in improved student performance?
Professor Shannon Anderson is exploring this question as part of a research project examining the use of a data portal tool created by Aspire Public Schools. The system, known as Schoolzilla, collects raw data from a school’s source systems—including the California State Test and benchmark assessments—and makes it readily available to teachers and administrators in the form of charts, graphs and textual information. The idea is to empower teachers to immediately identify which students are doing well, which are struggling, and to adjust their teaching strategies. The data also will make it possible to evaluate individual or groups of students over the long term.
Moneyball Hits Home Run
Lessons on Value Creation
By Professor Shannon W. Anderson
Fundamentals of Cost Accounting, 3rd Edition
McGraw-Hill/Irwin, 2010
A direct, realistic, and efficient way to learn cost accounting. Fundamentals is short (608 pages) making it easy to cover in one semester. The authors have kept the text concise by focusing on the key concepts students need to master. Opening vignettes and In Action boxes show realistic applications of these concepts throughout. Comprehensive end-of-chapter problems plus Homework Manager provide students with all the practice they need to fully learn each concept.
Implementing Management Innovations: Lessons Learned from Activity Based Costing in the U.S. Automobile Industry
Springer, 2001
Implementing Management Innovations: Lessons Learned from Activity Based Costing in the U.S. Automobile Industry is the result of a long-term study of the implementation of activity-based costing (ABC) inside two of America’s largest automobile companies.
The research advances our theoretical and practical understanding of the implementation of management innovations by tracing the evolution of ABC from the corporate level down to its eventual rollout at the plants. Another distinguishing feature of the study is the blend of field research methods and hypothesis testing to determine the factors that led to implementation success for managers and ABC development teams. Many of the findings of the study have implications for the implementation of other types of management innovations.
Risk Management in Strategic Alliances: Field Evidence
This paper provides field evidence on management control practices used to mitigate risk and to enhance cooperation in strategic alliances. The data are extensive field interviews with 38 managers in three large U.S. companies that have significant alliance risk exposure.
Moneyball: Business Lessons on Value Creation
Moneyball has become a metaphor for everything in business today: it touches heavily on concepts related to budgeting, data analytics and productivity. The movie is about how Oakland A’s General Manager Billy Beane revolutionized the process of scouting new baseball players on a budget by employing computer-generated analysis to sign new players and when best to put them in the line up. Brad Pitt was recently interviewed by NPR about making Moneyball and his role as Billy Beane. The interview provides snapshots of critical moments in the film that help put my points below in perspective.
Moneyball: Business Lessons on Value Creation
We often think about budgets and constraints as the enemy of creativity, but this isn't always the case...
Moneyball has become a metaphor for everything in business today: it touches heavily on concepts related to budgeting, data analytics, and productivity. The movie is about the General Manager of the Oakland A’s, Billy Beane, and how he revolutionized the process of scouting new players on a budget by employing computer-generated analysis to draft new team members. Brad Pitt was recently interviewed by NPR on the making of Moneyball and being Billy Beane. The interview provides snapshots of critical moments in the film that might help provide additional context for the content of this blog.
Shannon W. Anderson Awards
- Teacher of the Year, Notable Contribution to the Management Accounting Literature Award.
- Greatest Influence on Practice Award, American Accounting Association’s Management Accounting Section, “Management Control for Market Transactions: The relation between transaction costs, incomplete contract design and subsequent performance,” (with H. Dekker), Management Science, 2010.
- Class of 2007 Teaching Excellence Award, Jones Student Association, Rice University.
- Notable Contribution to the Management Accounting Literature Award, American Accounting Association’s Management Accounting Section, “Using Electronic Data Interchange (EDI) to Improve the Efficiency of Accounting Transactions,” (with W. Lanen),The Accounting Review, 2006.
- Wiess College Distinguished Faculty Associate, Conferred by the president of Rice University for distinguished service to an undergraduate college, 2006.
- IBM Best Paper Award Honorable Mention, Service Operations track of Production and Operations Management Society (POMS) Annual Research Conference, “Customer Satisfaction during Service Operations Failures: The role of attributions of blame,” (with S. Baggett and S. Widener), 2006.
- Best Paper Award, American Accounting Association’s Management Accounting Section Annual Research Conference, “Negotiated Goals and Pay-for-Performance: A field study investigation of how incentive compensation and goal negotiation affect financial performance,” (with H. Dekker and K. Sedatole), 2006.
- Notable Contribution to the Management Accounting Literature Award, American Accounting Association’s Management Accounting Section, Implementing Management Innovations: Lessons Learned from Activity Based Costing in the U.S. Automobile Industry (with M. Young), 2003.
An Empirical Examination of Goals and Performance-to-Goal Following the Introduction of an Incentive Bonus Plan with Participative Goal Setting
Management Science, 2010
Prior research documents performance improvements following the implementation of pay-for-performance (PFP) bonus plans. However, bonus plans typically pay for performance relative to a goal, and the manager whose performance is to be evaluated often participates in setting the goal.
Accounting in Networks: The Transaction Cost Economics Perspective
In this chapter of Accounting in Networks (Routledge, 2010), Professor Shannon W. Anderson and co-author Henri C. Dekker from the University Amsterdam review the use of Transaction Cost Economics (TCE) in the study of interfirm relationships. Anderson and Dekker focus on accounting and non-accounting studies to assess how TCE can further contribute to the understanding of accounting and control in interfirm settings.
Strategic Cost Management in Supply Chains, Part 2: Executional Cost Management
Accounting Horizons, 2009
In the first paper in this two-part series, Professor Shannon Anderson and co-author Henri C. Dekker from the University Amsterdam reviewed structural cost management in supply chains. In this second paper of the series they consider executional cost management in supply chains, which employs measurement and analysis tools (e.g., cost driver analysis, supplier scorecards) to evaluate supply chain performance and sustainability.
Strategic Cost Management in Supply Chains, Part 1: Structural Cost Management
Accounting Horizons, 2009
Strategic cost management is the deliberate alignment of a firm’s resources and associated cost structure with long-term strategy and short-term tactics. Although managers continue to pursue efficiency and effectiveness within the firm, increasingly, improvements are obtained across the value chain: through reconfiguring firm boundaries, relocating resources, reengineering processes, and re-evaluating product and service offerings in relation to customer requirements.
Management Control for Market Transactions: The Relation Between Transaction Characteristics, Incomplete Contract Design, and Subsequent Performance
Management Science, 2005
Using an unusually comprehensive database on 858 transactions for information technology products and accompanying services, Professor Shannon Anderson and co-author Henri Dekker from the University of Amsterdam study how close partners exposed to opportunistic hazards structure and control a significant transaction.
Using Electronic Data Interchange (EDI) to Improve the Efficiency of Accounting Transactions
The Accounting Review, 2002
Electronic data interchange (EDI) is an information technology that standardizes the exchange of information between transacting parties. Using data from a major U.S. office furniture manufacturer who adopted EDI primarily to improve the efficiency of accounting transactions, Professor Shannon W. Anderson and co-author William N. Lanen from the University of Michigan evaluate whether EDI reduces order processing time (the time from sales order receipt to sales order scheduling) and whether this improvement is greater for more complex orders.