Abstract
The volatility of both global and national markets has emerged in recent years. In response to the changes in the operating environment, organizations have been adopting various practices to ensure sustainable development by anticipating threats and managing risks. While many studies are focusing on the investigation of strategic adaptation to the volatile economic environment, there has been little research examining management accounting (MA) as a sustainable development strategy in times of economic turbulence. This study investigates the degree of variation in the use of MA practices induced by economic recession. Investigating the variations in management accounting practices in Russian organizations in 2000–2013 (pre-recession period) and 2014–2018 (economic recession), the authors explore the change across 54 MA tools split into operation, management, and strategy pillars. The contribution of this study to the literature involves the understanding of the use of particular MA tools across various types of organizations and industries before and during the economic recession, as well as discovering the intention to change the instruments in case the economic situation deteriorates. The survey of four types of organizations (micro, small, medium, and large) in five sectors (service, industry, trade, agriculture, and tourism) was conducted in seven territories of Russia differentiated on the level of their economic performance (well-performing, average, and declining). The survey revealed that, during the crisis, the respondents tend to drop using many of proactive sustainability-oriented MA tools and instead focused on achieving immediate and direct effects on sales, profits, and other performance parameters by employing less-sophisticated short-term MA instruments. The forecast of future application of MA tools in a falling economy revealed that, in an attempt to achieve durable and sustainable performance, the organizations of all types and sectors intended to focus on practices such as risk management variance analysis, rolling forecasts, payback, breakeven analysis, and activity-based management.
Highlights
IntroductionInstability affects all countries, all sectors, and all types of businesses [1]
In recent decades, the global economic environment has become increasingly volatile
The emerging volatility of the markets along with the evolution of the regulatory framework have changed the determinants of corporate performance
Summary
Instability affects all countries, all sectors, and all types of businesses [1]. In such conditions, the ability of an organization to anticipate and respond to external fluctuations is critical for its survival [2]. The majority of the existing studies have focused on the investigation of how volatility-induced economic slowdowns and recessions might be responded to using strategy-related instruments, i.e., strategic planning, mapping, and management. Firms encounter a stronger pressure to operate in a sustainable way and become increasingly transparent about sustainability-related management accounting (MA) practices they implement [3]. External pressures induce internal fluctuations, both of which are important factors of sustainability integration within corporate strategy amid economic decline. External pressures are prevalent in shaping management decision-making in relation to accounting, reporting, and control, while integration of sustainability-related accounting tools into performance management systems leads to better management and control of sustainability performance in business [4]
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