The models of cost management: the evolution of ideas

Abstract

The evolution of cost management models reflects the dynamic changes in business environments and the increasing complexity of organisational structures and processes. This paper traces the development of cost management theories from traditional costing methods to contemporary strategic models that integrate technology and sustainability. Initially, cost management focused primarily on direct cost calculation and control, suitable for simple, linear production processes. As industries evolved, the advent of activity-based costing (ABC) marked a significant shift towards more accurate overhead allocation and better product costing. In recent years, the integration of advanced technologies such as big data analytics and artificial intelligence has introduced predictive cost management, enabling proactive decision-making and enhanced financial performance [1, p. 25]. This evolution signifies a move from tactical, operational cost management to a more holistic, strategic approach that aligns with long-term organizational goals and sustainable practices.