A historical study of the role of cost accounting on performance in the UK confectionery market: the experience of Cadbury and Rowntree 1919-1938

Rowntree’s and Cadbury’s emerged in the latter half of the nineteenth century as two of the UK’s major confectionery firms. By 1918 they had achieved national prominence through the manufacture and marketing of distinct products. Their growth during the interwar period reflected the broader development of non-durable consumer goods within the British economy. The increasing size and complexity of these companies -- a direct consequence of their commercial success -- meant that effective management became critical to their continued ability to compete in the UK confectionery market. In addition to competencies in production management, planning, sales, marketing, distribution and labour management, which became increasingly necessary for the successful control of growing firms, this thesis argues that cost accounting was also a key determinant of this success. Rowntree’s and Cadbury’s pursued different paths to the introduction and development of their respective cost accounting capabilities. This was reflected in the level of technical sophistication they had achieved by the outbreak of World War II. These important differences are identified and explained. The end of the Great War created a changed landscape for the UK confectionery industry and the response of the two companies to this new environment is assessed and explained by a wide range of comparable financial performance measures which were known to contemporaries. Using a wide range of accounting metrics this thesis argues that the prevailing view in the historiography -- that Cadbury’s achieved superior performance -- needs substantial re-assessment. The extent to which the role of cost accounting contributed to this performance is considered, including examples where failings played a part in inferior performance. This is an important addition to business history by the exploration of the role of cost accounting in an industry not previously studied, and its impact on performance that is considered in a wide context.