Strategic Choices: The Case Of Management Accounting System

Abstract

<p class="MsoBodyText" style="text-justify: inter-ideograph; text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">While the popularity of strategic management accounting (SMA) has been growing over the last decade, there is still not an extensive literature, which directly addresses the relationship between management accounting system and strategy. The Management Accounting Research (MAR) constructed a special issue on SMA and concluded that (1) there <span style="mso-bidi-font-weight: bold;">were less</span> than 20 key articles on this subject in <span style="mso-bidi-font-weight: bold;">the</span> mainstream academic journals; (2) there <span style="mso-bidi-font-weight: bold;">was</span> a lack of <span style="mso-spacerun: yes;"> </span>comprehensive conceptual framework for SMA; and (3) there <span style="mso-bidi-font-weight: bold;">was</span> limited empirical evidence. To explore this and related issues, a study of the relative significance of the use of cost information for strategic considerations in relation to two levels of competitive analysis <span style="mso-bidi-font-weight: bold;">-</span><span style="text-decoration: underline;"> </span>corporate competitive intelligent information, and business competitive intelligent information<span style="mso-bidi-font-weight: bold;"> -</span> was undertaken. The<span style="mso-bidi-font-weight: bold;"> findings </span>of the study relate managers<span style="text-decoration: underline;">’</span> perceptions of two dimensions of their environmental changes (stability and certainty) to the two levels of competitive analysis. In order to gain a wider understanding of this relationship, a random sample of 110<span style="mso-bidi-font-weight: bold;"> large</span> Saudi companies were selected and data collected from senior managers. The results <span style="mso-bidi-font-weight: bold;">showed</span> that (1) the <span style="mso-bidi-font-weight: bold;">perceptions</span> of managers <span style="mso-bidi-font-weight: bold;">differ</span> between their environmental certainty and stability; (2) the relative significance accorded to business competitive intelligent information <span style="mso-bidi-font-weight: bold;">was</span> positively associated with rising instability; (3) the use of corporate competitive intelligent information <span style="mso-bidi-font-weight: bold;">was a </span>common practice. An interpretation of the results is that market instability stimulates strategic movement and cost information is being used in management thinking to support strategic development in meeting competitive pressures and in restructuring and reconfiguration of business strategy.</span></span></p>