Lean Management and Management Accounting System: An Actor-Network Conceptualisation

Purpose- the purpose of this study is to propose a comprehensive model to provide managers with useful information for decision making purpose using the most appropriate Management accounting techniques in the lean context. Design/methodology/approach- Based on the literature, this study identifies and adapts the most appropriate management accounting techniques to provide managers with useful information for decision making purpose in the lean context and propose a comprehensive model. It also tests the perceptions of managers and management accountants of the Egyptian Pharmaceutical industry concerning the relative merits of such a model. Findings- The most significant finding in the current study that has not been investigated in previous studies is that the proposed comprehensive model which contains the proposed value stream decision making tool and feature and characteristics (F&C) technique was a better predictor of decision making of the Egyptian Pharmaceutical industry than the alternative model which contains value stream decision making tool only. Originality/value- This paper contributes to lean and management accounting literature by proposing a comprehensive model for providing managers with a useful information for decision making using the integration between the most appropriate management Accounting techniques and demonstrating how this integration provides decision makers with useful information. It contributes to strengthening the effectiveness of decision making in the Egyptian Pharmaceutical industry.

German accounting has traditionally followed a dual ledger approach with strictly separated internal cost accounting, as the basis for management information, and external financial accounting focusing on creditor protection and based on the commercial law. However, the increased adoption of integrated accounting systems implies a significant change in the relationship between financial and management accounting systems. We use Hegelian dialectic to trace the historical development of German accounting from separated systems and antithetical propositions of full integration, to the emergence of partial integration as the synthesis of this transformation process. The foundation of our paper is a comprehensive analysis of the literature on the relationship between financial and management accounting in Germany. On this basis, we elaborate how financial accounting in Germany has been shaped by its economic context and legislation, and how financial accounting – accompanied by institutional pressures – in turn influenced management accounting. We argue that the changing relationship between management and financial accounting in the German context illustrates how current accounting practice is shaped not only by its environment, but also by its historical path. Based on this reasoning, we discuss several avenues for future research.

MAY 2012 PLACEMENT ADS

This book is not about debits, credits, or accounting theory. It’s about how a chief financial officer (CFO) becomes a Lean CFO to lead the transformation of a company’s management accounting system into a lean management accounting system. It’s been well established in lean companies that traditional management accounting systems do not provide relevant and reliable information to decision makers. The CFO, as steward of a company’s management accounting system, must provide the leadership to improve the quality of the information produced by a company’s management accounting system so it is aligned with a company’s lean strategy, lean operations, and continuous improvement. The integration of a lean management accounting system with a company’s lean strategy will lead to improved decision making by all users and drive long-term financial success. Lean management accounting helps all users, from executives to line managers, better understand the relationships between lean operating performance and financial performance. Written in the style of a practice guide, The Lean CFO is written not just for CFOs, but for all stakeholders of a company’s management accounting system, such as executives and owners, lean leaders, functional managers, and accounting professionals.

Management accounting systems and the economics of internal organization

This study examines the influence of risk-taking tendencies and transformational leadership on organizational performance, emphasizing the mediating roles of product creativity, organizational citizenship behavior, and management accounting systems (MAS). This study employed a quantitative survey method by distributing self-administered questionnaires to 277 Chief Executive Officers (CEOs) of manufacturing firms in Banten Province. Data were analyzed with structural equation modeling (Smart PLS 3.3). The findings support thirteen hypotheses, demonstrating that risk-taking tendencies and transformational leadership positively affect product creativity and MAS, while product creativity and organizational citizenship behavior further enhance MAS. Moreover, MAS significantly mediates the relationship between both risk-taking tendencies and transformational leadership with performance. Overall, the results highlight that fostering risk-taking behavior and transformational leadership indirectly improves organizational performance through stronger creativity and MAS practices. Theoretically, this study extends organizational behavior and management accounting literature by integrating leadership, creativity, and control systems into a unified framework. Practically, the findings underscore the importance for managers to align transformational leadership styles with organizational needs for creativity, innovation, and calculated risk-taking. Supported by a well-designed Management Accounting System (MAS), this alignment can enhance decision making processes and foster a performance. Managers are encouraged to cultivate leadership behaviors that inspire innovation and support a risk taking tendency, as these elements are shown to significantly contribute to improved organizational performance in dynamic and competitive environments.

Predicting Change in Management Accounting and Control Systems: Additional Evidence from Australia

Purpose – This study aims to establish the existence of Management Accountant’s Expectation Gap and its perceived variability with management accountants’ competence, management accounting system and organizational structure. As a corollary, it examines the contribution made by management accountants’ competence, management accounting system and organizational structure in closing Management Accountant’s Expectation Gap. Design/methodology/approach – This study is cross-sectional and correlational, and it uses firm-level data that was collected by means of a questionnaire survey from a sample of 242 manufacturing firms in Kampala – Uganda. Findings – Results suggest that management accountants’ competence, management accounting system and organizational structure are significant predictors of Management Accountant’s Expectation Gap. Research limitations/implications – This study focuses on manufacturing firms in Uganda, and it is possible that these results are only applicable to the manufacturing sector. More research is therefore needed to further understand the contribution of management accountants’ competence, management accounting system and organizational structure in narrowing Management Accountant’s Expectation Gap in other sectors such as the accounting firms. Practical implications – The results suggest that policy makers prescribe qualifications for management accountants and outlining roles of management accountants in the accountants’ act 2013 to ensure that management accountants engage in the right roles thus closing the Management Accountant’s Expectation Gap. Originality/value – According to Budding and Wassenaar (2021) study, there is a Management Accountant’s Expectation Gap however, no research has hitherto been undertaken that investigates the individual contribution of Management accountants’ competence, management accounting system, organizational structure in closing the gap.

A nthony Hopwood was born on May 18, 1944 in Stoke-on-Trent in England and died on May 8, 2010 in Marlow, England. He was a pioneer in behavioral accounting research. He contributed to that area with both his research and as the founding editor of Accounting, Organizations and Society (AOS), the leading behavioral accounting research journal, the reason for which he likely is best well known by scholars internationally, both in and outside of accounting. He held that position for 35 years. As Zeff (2008, 3) described it, in his remarks introducing Anthony at his Hall of Fame induction:

Management accounting (MA) studies disclosed the significance of MA for organizational change, progress and showed the benefit of a performance measurement process. This is the reason why management of organizations should have MA system (MAS) effectively providing information for decision-making at the acceptable costs. Issue of the right MA tools setting and correct transformation of existing system into the optimal one is not new. Nevertheless, the biggest part of scientific works related to MA is concerned with separate tools of MA and are fragmented. The main aspect of the relevance of this issue is the question what features should have modern MA and how should the existing MA systems be changed into modern ones. The objective of this paper is to examine theoretical and practical assumptions for the development of MAS adjusted with the environment of an organization. According to the mentioned objectives theoretical and practical assumptions for the development of modern MAS adjusted with the environment of an organization and satisfying management needs of timely receiving the most relevant information with no surplus costs was examined in this paper. The analysis of scientific literature, the systemization of results of different researches related to MA, the studies of business companies, the conduction of financial and managerial analysis, the synthesis of management/MA theories, methods and practical cases were made in this research. The research disclosed that MA could be assessed company-wide, seeking to find an optimal configuration of the local management accounting system (Technical - Managerial View). Also different MA theories, MAS of different companies can be compared and the best choice or conclusions can be achieved based on systemization of theories and practices (Pragmatic – Interpretive View). Besides that, relationship between MA and external environment in much wider context can be analyzed (Critical-Socio-Economic View). The performed analysis showed that MAS are strongly influenced by the internal, external environment and objectives of organization. Organizations differently pursue Return on Capital (ROE) maximization. Each type of organization has interim objectives helping them to cope with the obstacles of external/internal environment and to take advantage on possibilities. Companies performing in volatile environment use simpler MAS and vice versa, so different sets of MA tools should be applied to different types of organizations. This assumption is the key matter for the modern MA system creation. Basic principles of modern MAS development state that managers first of all should determine an organization type. Depending on that set of MA techniques adoptable to the particular organization should be determined and applied. Implementation of proposed MA tools demands to organize that on a project basis. Project team should be organized and an approval as well as the support of the top management is mandatory. Acceptance, support and involvement of all management and employees are necessary for a successful change of existing MAS. Constant monitoring of an organization type change, the assessing of MAS effectiveness and top management’s support is necessary for a successful functioning of modern MAS.

Modeling a Management Accounting System for Lean Manufacturing Firms

Purpose – The purpose of this paper is to implement an integrated activity-based costing (ABC) and theory of constraints (TOC) approach to enhance decision making in a Lean company. Design/methodology/approach – Based on the literature, this paper proposes an integrated ABC and TOC approach and applies it to a Lean plastic manufacturing company to improve its product-mix decision. Findings – The results of the case study show that the current conventional product-mix decision used by the company and the proposed integrated approach can give significantly different results concerning the optimal product-mix and the associated bottlenecks. Moreover, the paper suggests that managers who implement Lean production without utilising a supportive management accounting system may experience disappointing financial results. Research limitations/implications – The validation of the suggested method is based on a single case study with an action research approach. For future research, the authors suggest the implementation of the approach in different industries. Practical implications – Overall, the integration of ABC and TOC provides managers with an accurate, timely and reliable tool that can help in making decisions about pricing, production line development, process improvements and product-mix. Originality/value – This paper contributes to Lean and management accounting literature by demonstrating the value of a method of integrating ABC and TOC. Also a case study is chosen for the empirical aspect of the study as there are no case studies available in the literature that illustrate a real life case of integrating ABC and TOC within Lean companies as an alternative to the current used cost accounting systems.

This study investigates the relationship between lean manufacturing practices, management accounting and performance measurement (MAC & PM) practices, organizational strategy, structure, and culture, and facility performance. We extended past research by examining the relationships between lean manufacturing, MAC & PM practices and performance in a broader organizational context. Our study was performed using survey data provided by managers and executives at 368 facilities that had contacted the Shingo Institute for information or that had entered a Shingo Prize competition. Consistent with past research we found a significant positive association between lean manufacturing practices and lean MAC & PM practices. We found that greater employee empowerment, use of process performance measures, and use of lean accounting practices were driven primarily by lean strategy and secondarily by the extent of lean manufacturing practices. We also found that changes in organization structure to support lean are driven primarily by lean strategy and secondarily by lean manufacturing practices. Change toward lean culture, on the other hand, is driven by the extent of lean manufacturing practices. Further, we found that emphasizing process performance measures does not reduce emphasis on results performance measures and emphasizing results performance measures leads to improved financial performance. Process and results measures are being used in tandem and value stream costing has not replaced traditional accounting. The results of our study provide important insights for managers of companies engaged in lean transformation and for academics who teach or research lean accounting.

Introduction: Manufacturing companies operating within dynamic and intensely competitive markets have a mindset that concentrates on continuous improvement processes. The management efforts have focused on enhancing quality, flexibility, and customer response time through the application of Lean thinking principles. For an organisation to realise its full potential of lean application, lean manufacturing organisation must embrace a comprehensive business strategy, rather than being confined to a singular focus within operations. The lean manufacturing organisation necessitates the incorporation of lean approaches throughout operations and various business functions. Management accounting practices (MAP), and lean accounting serve as crucial elements in attaining higher performance improvement and align with the requirements and goals of lean organisations. This study aims to investigate the relationship between lean accounting components and the manufacturing performance of Malaysian manufacturing companies. Methods: The survey data collected from 282 Malaysian manufacturing firms was utilised and develop a structural equation model of lean accounting and manufacturing performance. Results: The findings show that the implementation of lean accounting is directly related to manufacturing performance. Specifically, the elimination of transactions (ELT), performance measurement (PFM), financial benefits (FNB), and value stream management (VSM) have direct effects, while value stream costing (VSC) indirectly impacts manufacturing performance in Malaysia. Conclusion: The results of our research align with the perspective that lean thinking constitutes a comprehensive business strategy. To achieve the most significant effect on performance, our findings suggest that operations management must across the departments and areas to maximizse its efficiency. Operations and accounting personnel must collaborate to ensure that lean accounting is strategically integrated into the lean manufacturing organisation. This study assists both researchers and practitioners in comprehending how lean accounting can facilitate operations personnel in their internal decision-making processes, as well as support operations executives and business leaders in their goal of enhancing lean operations performance within the framework of a comprehensive lean manufacturing strategy.

This article examines the interaction and role of financial and managerial accounting in supporting enterprises' foreign economic activity (FEA) under martial law conditions. FEA presents unique challenges for accounting, such as complex operations, currency risks, customs regulations, and the need to comply with international standards. These conditions require integrating financial and managerial accounting to ensure operational resilience and effective management in a volatile global economic environment. The study aims to analyze the specific features and interdependence of financial and managerial accounting in FEA. It focuses on their role in enhancing decision-making and optimizing performance during martial law, addressing risks and regulatory challenges. The research is based on a theoretical and practical analysis of financial and managerial accounting systems. The study applies comparative and analytical methods to assess their compliance with international standards and practical implementation in the FEA context under martial law. Financial accounting ensures transparency and compliance by producing financial statements (balance sheet, income statement, cash flow statement) for external stakeholders. Managerial accounting focuses on internal decision-making, providing tools for cost analysis, budgeting, and risk management. Integrated accounting systems allow enterprises to align compliance with strategic goals, enabling real-time decision-making and resource optimization in foreign markets despite wartime challenges. The study concludes that integrating financial and managerial accounting is crucial for managing FEA during martial law. Financial accounting provides transparency and compliance, while managerial accounting offers insights for adaptation and strategic management. Enterprises are encouraged to adopt unified digital platforms to streamline processes, improve data accuracy, enhance decision-making, and ensure greater efficiency in the context of complex external factors, thus ensuring greater resilience and competitiveness in the global market.