Abstract
This study examines the effect of the organizational change on company performance which is mediated by changes in management accounting practices. High environmental uncertainty requires company management to make organizational changes and changes in management accounting practices to achieve performance. The study uses a survey method with a total of 1945 respondents as managers of middle to upper manufacturing companies in 389 manufacturing companies in Indonesia. Data analysis techniques use partial least square, with more accommodating considerations for analyzing complex models with various indicators that are reflective and formative. The results of the study indicate that organizational change had a positive effect on changes in management accounting practices. Changes in accounting practices have positive effects on corporate performance, and changes in management accounting practices are able to mediate environmental changes in performance. Meanwhile, organizational change does not affect the company's performance.
Highlights
Performance achievement cannot be separated from the role of management accounting
The positive coefficient has a direct relationship between organizational change and changes in management accounting practices
The results of testing this hypothesis indicate that organizational change has a positive effect on changes in management accounting practices is accepted
Summary
Changes in management accounting practices are related to several factors in the organizations which are contextual variables either within or outside the company (Moores & Yuen, 2001) such as environmental uncertainty, strategy, organizational structure, company size, production technology, organizational capacity and competition intensity (Luther & Longden, 2002). According to the Central Bureau of Statistics (BPS), there are 4 sectors that contribute greatly (> 10%) to GDP per year, while the manufacturing sector only grows 4.2%. This phenomenon is suspected, among others, by the inability of management in anticipating changes occurring in the internal and external environment of the organization. The inability of the management to anticipate changes is caused by the inability of the company to manage the information available for use in making the right decision
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