Research On Cost Stickiness Based On The Perspective Of Internal Governance

"Cost Stickiness" expresses that when the business volume of a company rises,the rise in cost is greater than the decline in cost when the business volume decreases equally.According to its definition,On the one hand,it reflects that the company resources haven't been allocated timely and reasonable;On the other hand,the difference in the extent of changes indicates that there is a nonlinear relationship between cost and business volume.That is in contrast to the cost-volume-profit calibration model which belongs to Management Accounting.Of course,the problem cost stickiness brings is not just its influence on the above model.To understand the impact of cost stickiness on companies,we must find out the causes of cost stickiness first,find the right solution to ease the problems brought by cost stickiness.Currently,The scholars' study about cost stickiness was based on the logarithmic linear regression model constructed by scholar ABJ through an industry perspective,especially manufacturing industry.And in the study of the causes of cost stickiness,most of the factors are about internal governance.No scholars have studied the cost stickiness based on a Single company and the logical framework of internal governance.In summary,this paper intends to take the Anshan Heavy Duty Mining Machinery Co.,Ltd.'(hereinafter referred to as ANZHONG CORP.)as an example to do the case study,and measures the cost stickiness of the company using the direct measurement method of scholar Dan Weiss.It shows that the cost stickiness is exists in the operating period of company.Through analysis,this paper draws the following conclusion: Cost stickiness will increase the company's business risk;Affect the accuracy of the company's budget,Performance appraisal,corporate performance and cause damage to the interests of shareholders.Based on the conclusion,this paper proposed the following recommendations:(1)Improve the company's internal governance structure: Distribute shares,Achieve equity incentives;Make chairman separation from general manager;Strengthen the supervisor's sense of responsibility,and establish incentive mechanisms;(2)Strengthen the staff 's sense of the importance of cost stickiness;(3)Clarify the path of compensation for the loss of small and medium shareholders while increasing the intensity of punishment for illegal punishment;(4)Actively optimize the structure of assets;(5)Product diversification.