Does the Involvement of Management Accountants in Strategic Management Processes Enhance Organisations’ Strategic Effectiveness? An Empirical Analysis

Abstract

The role of management accountants (MAs) within organisations is said to be in a state of change and researchers have called for a greater involvement of MAs in strategic management processes (SMPs) as a means of regaining the ‘relevance lost’ and increasing the value creation of their activities. Although such arguments are compelling, there is neither research examining the nature of involvement of MAs in the SMP, in particular in the formulation of strategy, nor whether such involvement enhances organisations’ strategic effectiveness. To investigate these issues, we conducted a postal survey of members of CPA Australia and obtained 280 usable observations. We find that MAs’ were involved in both the strategic formulation and implementation of the SMP and a strong positive association between the involvement in these two stages. More fundamentally, we find that strategic effectiveness is significantly impacted by MAs involvement in strategic implementation. However, the effect on strategic effectiveness of MAs involvement in the strategic formulation was found to be fully mediated by involvement in strategic implementation. Finally, we find that combining involvement in strategic implementation with strategic formulation has a positive effect on strategic effectiveness, thus supporting the argument for a greater involvement of MAs in the entire SMP.