Strategic Management Accounting Practices Research Articles

The Effect of Strategic Management Accounting Practices on Firm Performance in Jordan, the Mediating Role of Supply Chain Management Practices

The Effect of Strategic Management Accounting Practices on Firm Performance in Jordan, the Mediating Role of Supply Chain Management Practices

The influence of organisational learning capability on the organisational use of SMA practices: The mediating role of employee creativity and empowerment

AbstractThis study extends the strategic management accounting (SMA) and organisational learning literature by examining the role of organisational learning capability in facilitating the organisational use of SMA practices. Further, we consider the role of two employee behavioural factors – employee empowerment of SMA practices and employee creativity – in mediating this relationship. Data was collected from 332 accountants in Australian business organisations using an online survey questionnaire, with structural equation modelling applied to analyse the data. The findings highlight the direct and indirect (through employee empowerment of SMA practices and employee creativity) influence that organisational learning capability has on the organisational use of SMA practices.

Impact of Strategic Management Accounting Practices on Financial Performance of Nepalese Manufacturing Firms

This study was carried out to examine the relationship between financial performance and the application of management accounting practices in the Nepalese manufacturing firms. The study adopted the survey research design. The population of the study consists of all listed manufacturing companies under Nepal stock exchange. The study used simple random sampling. Four manufacturing firms were randomly selected for the study. Data for the study were obtained through the administration of a self-designed questionnaire to managers or accountants of the sampled firms through mail survey. Regression and t-test were used to test the hypotheses postulated for the study. The study showed that application of management accounting tools has a positive relationship with financial performance of companies’ survey. The study also found a significant difference in effectiveness of decision making between application of management accounting tools and traditional management accounting techniques and concludes that implementation of strategic management accounting practice is necessary to enhance organizational performance of the firm. The study therefore recommends that manufacturing companies, especially the ones listed and still tradable under NEPSE, put in place appropriate measures to apply modern management accounting tools called strategic management accounting practices to ensure efficient and realistic decision-making process that will enhance financial performance.

Strategic Management Accounting Practices and Financial Performance of Small and Medium Manufacturing Enterprises in Nairobi City County, Kenya

Previous studies acknowledge that small and medium-sized enterprises (SMEs) are key drivers to Kenya's economic development. Many of these SMEs face persistent constraints and do not realize their full potential, with many failing within their first three years of operation. A possible cause for the high failure rate is poor financial performance. Existing literature highlights one remedy as the use of strategic management accounting practices. This paper investigated the influence of strategic management accounting practices (SMAPs) on the financial performance of small and medium manufacturing enterprises (SMMEs) in Nairobi City County, Kenya. The study used self-reporting opinion questions on Return on Investments (ROI), Return on Assets (ROA) and net profit margin as financial measures. A descriptive research design was used. Target population was 693 SMMEs in Nairobi. Data was collected through a self-administered cross-sectional survey. Questionnaires were administered to a sample of 254 SMMEs with 156 usable responses. Data was analyzed using structural equation modelling to explain the relationships among multiple variables for SMAPs and financial performance. Results of hypothesis testing revealed that SMAPs significantly influence financial performance (chi-square (χ2) = 612.82, DF = 171, p-value = 0.000, CMIN/DF (x2 /df = 3.584, RMSEA = 0.114, IFI= 0.857, CFI= 0.856, NFI= 0.819, GFI =0.806, AGFI=0.751), where the model explains 43.7% in the variations on financial performance of SMMEs. Results suggest that the financial performance of SMMEs can be improved by deploying SMAPs. The study recommends that SMMEs should be encouraged to adopt SMAPs through policy and practice.

Strategic Management Accounting and Financial Performance of Small and Medium Manufacturing Enterprises in Nairobi City County, Kenya

Previous studies acknowledge that small and medium-sized enterprises (SMEs) are key drivers to Kenya's economic development. Many of these SMEs face persistent constraints and do not realize their full potential, with many failing within their first three years of operation. A possible cause for the high failure rate is poor financial performance. Existing literature highlights one remedy as the use of strategic management accounting practices. This paper investigated the influence of strategic management accounting practices (SMAPs) on the financial performance of small and medium manufacturing enterprises (SMMEs) in Nairobi City County, Kenya. The study used self-reporting opinion questions on Return on Investments (ROI), Return on Assets (ROA), operating profit and net profit margin as financial measures. A descriptive research design was used. Target population was 693 SMMEs in Nairobi City County. Data was collected through a self-administered cross-sectional survey. Survey questionnaires were administered to a representative sample of 254 SMMEs with 156 usable responses. Data was analyzed using structural equation modelling to explain the relationships among multiple variables for SMAPs and financial performance. Results of hypothesis testing revealed that SMAPs significantly influence financial performance (chi-square (χ2) = 612.82, DF = 171, p-value = 0.000, CMIN/DF (x2 /df = 3.584, RMSEA = 0.114, IFI= 0.857, CFI= 0.856, NFI= 0.819, GFI =0.806, AGFI=0.751), where the model explains 43.7% in the variations on financial performance of SMMEs. Results suggest that the financial performance of SMMEs can be improved by deploying SMAPs. The study recommends that SMMEs should be encouraged to adopt SMAPs through policy and practice.

Factors impacting strategic management accounting adoption: Empirical evidence from an emerging market

Strategic management accounting (SMA) is an advanced management tool that provides valuable information to aid managers in making strategic decisions for both long-term and short-term choices. Many factors motivated managers to adopt strategic management accounting (SMA) practices in their enterprises. Furthermore, strategic management accounting (SMA) techniques also consider external stakeholders such as customers, suppliers and regulators. Therefore, there may be various aspects of the external working environment that impact SMA implementations. On the other hand, strategic management accounting (SMA) also helps managers manage costs and resources effectively. Other internal factors such as managers’ perceptions about SMA, the knowledge of accountants and technologies also significantly impact the adoption of SMA techniques. The study’s main objective is to investigate the factors that affect SMA implementation in Vietnamese enterprises. Purposive techniques are used in the study’s explorative quantitative survey approach and data collection. Data from 305 Vietnamese enterprises are included in the sample. The findings demonstrate that the adoption of SMA practices is positively associated with four factors including top management teams, corporate culture, perceived environmental uncertainty and management networking.

Strategic Management Accounting and Performance Measurement Systems: A Loose Coupling?

This study aims to clarify the association between strategic management accounting (SMA) and performance measurement system (PMS) based on configurational and contingency theories assumptions. For that, data were collected from 98 higher-level accounting managers working in Saudi companies listed at the Saudi Exchange's Main Market at the end of 2022. The results show that there is a positive and significant correlation between SMA and PMS, and there is a statistically significant positive effect of the level of practicing SMA on PMS adopted by surveyed companies. This means that the company that is practicing SMA in higher level tends to adopt a non-traditional PMS. The results also show that there is a statistically significant difference between surveyed companies in the level of performance due to the linkage between their PMS and SMA practices. Appropriate linkage between SMA and PMS leads for better performance. However, the present study supports the idea that SMA can be a contextual factor affecting the type of PMS adopted by companies. Keywords: Strategic management accounting, performance measurement systems, contextual factor, Saudi Exchange's Main Market. DOI: 10.7176/RJFA/14-10-06 Publication date: May 31 st 2023

The interplay of strategic management accounting, business strategy and organizational change: as influenced by a configurational theory

PurposeThis paper aims to discuss the interplay between strategic management accounting (SMA) and three organizational change configurations: strategy, structure and restructuring. This explication occurs within a context that is characterized by organization restructuring and corporate strategy changes within Jordan Customs Organization (JCO).Design/methodology/approachThis paper uses a qualitative research approach and presents an interpretive case study of the JCO public sector organization. To collect data, it uses methodological triangulation, which includes interviews, historical and statistical analyses, documents and archival records. It is informed by the theoretical lens of configurational theory and strategic typologies to interpret the influences of organizational change configurations on SMA as it relates to the interplay of strategy, structure and restructuring.FindingsThe study findings agree with the related literature that SMA practices have developed management accounting from important operational transactions to gain a more strategic orientation through integrating customers, human resources, processes and financial departments. This paper concludes that specific SMA techniques have been used for strategizing by organizations in the public sector, providing a valuable counterpoint to the private sector adaptation that has dominated SMA research. This study finds that organizational restructuring has also contributed to decentralization and delegation, which has led to the distribution of tasks and specialization in accounting departments. It also concludes that SMA may facilitate or delay organizational change configurations in JCO. SMA can play a significant role in ensuring that the institution learns in response to organizational changes. On the contrary, this paper also concludes that organizational practices led to changes in SMA rules and routines.Research limitations/implicationsA general criticism of case-study methods is that they lack rigor and provide little basis for generalization. First, case studies tend to be specific and individual, posing significant issues regarding generalization. Therefore, several comparative case studies involving various organizations should be conducted to ascertain if these practices have become more commonplace, especially in the public sector. Second, considering the nature of a government entity and the sensitivity of the information that required confidentiality, certain strategizing imperatives could not be directly examined, such as meetings between top management to make important decisions of strategic significance. This paper has important implications because it highlights the shortcomings of a supercilious singular relationship between strategic choices and the design of SMA practices.Originality/valueThis paper contributes to the growing literature by focusing on the relationship between SMA and three organizational change configurations: strategy, structure and restructuring. This paper is informed by the configuration theory perspective commonly used in accounting research. The empirical evidence in this study is provided in an SMA field, where empirical research is needed to be comparable with traditional accounting practices.

Strategic management accounting within the system of integrated management of enterprises

Introduction. The paper develops recommendations for improving the methodology of strategic management accounting in the system of complex management of enterprises. The influence of the practice of strategic management accounting on the performance of logistics companies has been studied. The purpose of the paper is development of recommendations for improving the methodology of strategic management accounting in the system of complex management of enterprises. Results. Strategic management accounting is based on various elements, such as: the use of technology, the use of effective information and public policy. They are of crucial importance for the implementation of strategic management accounting in the practical activities of enterprises. It is proved that one of the concepts of strategic management accounting includes the following elements: technology, information and state policy. Partial least squares (PLS) modeling was used to analyze the collected data. A structural model of the influence of elements of strategic management accounting on the profitability of logistics companies is built. The results show that strategic management accounting practices had a significant positive relationship with supply chain performance, and supply chain performance had a significant positive relationship with logistics company profitability. Conclusion. The element Technology was found to have a significant positive relationship with supply chain performance with a value of 6.311. Increasing technology efficiency improves supply chain outcomes. Moreover, it was found that information also had a significant positive relationship with 6.872. In the same vein, it was investigated that public policy had a significant positive relationship with supply chain performance with a value of 3.246. Finally, supply chain performance had a significant positive relationship with logistics company performance with a t-value of 23.412. Prospects for further research are the study of the role of leadership in the competencies of managers and audit in strategic management accounting in order to eliminate the asymmetry of accounting information.

Influence of Strategic Management Accounting Practices on Employee Satisfaction in Businesses in Vietnam

This study was conducted to assess the impact of strategic management accounting practices on employee satisfaction in businesses in Vietnam. The study uses documents in combination with direct interviews of related subjects of some companies and corporations on the Hanoi city table. The practice of strategic management accounting can affect employee satisfaction in a variety of ways, such as: clear communication of organizational goals, incentives and rewards, training and development, resource allocation, and employee engagement. Based on the results of the study, some recommendations are given to businesses to help them have useful insights to promote the implementation of strategic management accounting to improve employee satisfaction, thereby promoting their growth and competitiveness in the global market.

Strategic Management Accounting Practices and Organizational Performance of Manufacturing Firms in Kurunegala District

The International Journal of Accountancy (IJA) is published by the Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka. It is an interdisciplinary accountancy research journal, publishing enquiries of accounting, management accounting, auditing, taxation, and governance issues and their impacts on policy, practice and society. IJA encourages better understandings of accountancy related matters through research, encouraging innovative and interdisciplinary approaches.

The Role and Implications of Big Data on Strategic Management Accounting Practices: A Case Study in a Malaysian Manufacturing Company

The Role and Implications of Big Data on Strategic Management Accounting Practices: A Case Study in a Malaysian Manufacturing Company

The influence of strategic management accounting on value creation in government linked companies

This study aims to examine the connection between strategic management accounting (SMA) practices and the elements of value creation. 215 data from state and federal government linked companies (GLCs) in Malaysia were collected through a questionnaire survey. Respondents for this study were selected through purposive sampling. These data were analysed using SPSS and AMOS to test the relationship between the SMA variables such as benchmarking, integrated performance measurement, strategic costing, strategic pricing, brand valuation, quality costing and competitors' performance evaluation. This study found that the practitioners are aware of the advantages of adopting SMA practices and their impact on business management and performance by creating value in their organisations. SMA techniques provide strategic planning and non-financial information that encourage competition and the adoption of best practices, which helps GLCs to perform better and achieve a sustainable competitive advantage, which directly reflects in generating value creation.

Management accountants and strategic management accounting: The role of organizational culture and information systems

This study aims to contribute to the scant contingency theory literature on the determinants of strategic management accounting (SMA) practices and the role management accountants play. We develop and test a more complex theoretical model than in prior studies, to simultaneously examine the role of three variables: management accountant networking, information systems (IS) quality and organizational culture. These have not been examined in a single model before in the SMA literature. Using data from 149 UK manufacturing business units and the partial least square structural equation modeling, our findings document a positive relationship between management accountant networking and the implementation of SMA practices. However, this relationship is positively moderated by IS quality, which further enables management accountants to implement SMA practices. Unlike IS quality, we do not find empirical support for similar moderating effects by the outcome-oriented culture and innovation-oriented culture. Instead, the innovation-oriented culture has a significant indirect positive effect on SMA implementation through management accountant networking but not a direct one. In contrast, we find a direct positive impact of outcome-oriented culture on SMA implementation but not an indirect one through management accountant networking. These results suggest that in outcome-driven business units, the implementation of SMA practices may not be limited to the accounting function. Managers in other functions may be motivated to implement SMA practices even when management accountants are not part of the process.

Strategic management accounting practices: a literature review and opportunity for future research

PurposeThe purpose of this study is to review the empirical studies that have focused on the adoption, benefits and contingencies of strategic management accounting (SMA) practices and the effects of adoption on firm performance.Design/methodology/approachThe study has highlighted empirical studies conducted on SMA practices in the context of both developed [1] and developing economies. In reviewing the literature, the study focuses on the findings of developed economy separately from that of developing economy to get more insight into the differences in the practices of the two set of economies. Based on the review, avenues for future research studies are outlined.FindingsThe review of extant literature reveals that several SMA techniques such as competitor accounting, strategic pricing, benchmarking and customer accounting have been highly or moderately adopted in several developed countries while majority of other techniques remained at the bottom line of the adoption status. However, the review demonstrates substantial differences in the SMA practices between the two set of economies in terms of the level of adoption, contingent factors and the effects of adoption.Originality/valueThe study attempts to focus on empirical studies that have concentrated exclusively on SMA practices. The adoption status, benefits derived, contingent factors affecting the adoption decision and the effect of adopting a package of SMA techniques on several aspects of firm performance are presented in the context of both developed and developing economies.

Assessing Strategic Management Accounting Practices in Public Interest Companies in Malaysia

Strategic management accounting (SMA) practices play important roles in supporting decision making and strategic plan positioning in a firm. SMA practices comprise a range of useful and relevant techniques to facilitate a firm’s value. Through these techniques, a firm would be able to achieve competitive advantage and sustain economic growth, which leads to long-term performance. Recently, the role of SMA techniques in enhancing business performance has become the focus of many studies, unfortunately, studies that accessing the adoption of SMA practices in organizations particularly in Malaysia are not widely available. Hence, the purpose of this paper is to investigate the extent of SMA practices in public interest companies in Malaysia called Government Linked Companies (GLCs). Through SPSS analysis of data collected from 215 questionnaires, the study shows that top management of GLCs has a better understanding of SMA practices due to extensive use of SMA techniques which discovered from the findings and believe that it can benefit their organization. This paper has enriched the literature and provided an assessment of SMA practices for researchers and practitioners which can improve competitiveness in the industry, business prosperity, and secure long-term performance.

Generic Strategy and Strategic Management Accounting Practices: Case Study of a Sri Lankan Telecommunications Company

Organizations depend on different generic strategies to gain competitive advantage (Porter, 1980). Usage of a particular generic strategy is always associated with a set of rules, practices, and procedures within an organization. Amongst them, Strategic Management Accounting (SMA) practices play a vital role in supporting and monitoring the performance of the generic strategy pursued by an organization.However, organizations may change the generic strategies they use over the time due to various changes taking place in the environment including the changes in business environment,technology, competitors, regulation and the global economy (Wickramasinghe & Alawattage, 2007).A change in the strategy is expected to lead to changes in existing policies and practices to match the new strategy (Langfield – Smith, 2007).Thus SMA practices used by the organization should be no exception. Such changes in practices are important for effective implementation of the new strategy. Otherwise, the new strategy is expected to fail. However, studies, which examine the changes in generic strategy and associated changes in SMA practices are scarce in the Sri Lankan context. Hence, the purpose of this paper is to examine whether the change in generic strategy leads to changes in SMA practices used in Alpha Telecom PLC, which is a leading telecommunications company in Sri Lanka. Also, the study expects to recognize other factors contributing to the changes in SMA practices in this company.This study adopted the qualitative research methodology and used the single case study method to conduct an in depth analysis of SMA practices of Alpha Telecom. The data were collected through semi- structured interviews with senior managers and a questionnaire was distributed among middle level executives. Management Accounting (MA) reports and annual reports of the company were used as secondary sources. The study has used new institutional theory as the theoretical lens. The study found that when generic strategy moved from cost leadership to differentiation, the traditional MA practices based on costing shifted to SMA practices such as Balanced scorecard (BSC), Competitor analysis, Quality costing etc. Further, it was found that changes in ownership, culture of parent company, and nature of competition also had an impact towards the usage of new SMA practices within the company. Coercive and mimetic pressures affected for the usage of SMA at Alpha PLC.

Organizational lifecycle and strategic management accounting

PurposeThis study aims to examine the relationship between organizational lifecycle stages, the adoption of strategic management accounting (SMA) practices and the performance consequences of SMA adoption.Design/methodology/approachThe analysis is based on survey data from 377 firms operating in German speaking countries.FindingsThe author finds that the firms’ adoption rates of SMA increase from the birth to the revival lifecycle stages and drop at the decline stage. Firms that deviate from the optimal SMA profile have lower performance compared to the firms that do not deviate. The negative performance effect, however, is only significant for firms that have too little SMA practices and is not significant for firms that adopt too much SMA practices.Research limitations/implicationsThese results suggest that firms that fail to implement a sufficient level of SMA suitable for their development stage will not develop as fast as their competitors. This study is subject to general limitations of survey research, particularly with respect to the operationalization of the variables, the number of contextual variables in the empirical model and sample coverage.Practical implicationsThe implication for managerial practice is that greater efforts should be directed toward eliminating underfit than overfit regarding the implementation of management control systems.Originality/valueThis is the first analysis of the adoption of SMA at different life cycle stages and the consequences of misfitted adoption.

Strategic Management Accounting disclosure, ownership structure, and firm characteristics in Indonesia manufacturing companies

Why managers should choose to disclose their information with investors is one of the major issues in accounting research. Because of information asymmetry and the agency problem, disclosure is an important aspect of the modern capital market. This study aims to measure the extent of Strategic Management Accounting (SMA) disclosure and the impact of ownership structure (managerial ownership, foreign ownership, government ownership) and firm characteristics (firm size, leverage, profitability) on SMA practices in annual reports of Indonesia manufacturing companies. The annual reports of 545 listed companies for 2012–2016 were examined to measure the extent of SMA disclosure and investigate potential determinant factors of SMA disclosure. This study used 42 items of weighted disclosure index, based on international guideline and SMA literature. This study used multiple regression analysis to examine the association between ownership structure, firm characteristics, and SMA disclosure. The results indicate a low extent of SMA disclosure in annual reports of Indonesia manufacturing companies. The average of SMA disclosure rate is only 39.4 percent, which indicates that SMA has not been commonly disclosed in annual reports. Further results indicate that only leverage that has an insignificant effect on the extent of SMA disclosure. The finding regarding SMA disclosure in annual reports should be on concern to regulatory authorities and standard-setters in Indonesia. JEL Classification: G30, G32, G34 DOI: https://doi.org/10.26905/jkdp.v23i3.3228

Strategic choices and strategic management accounting in large manufacturing firms

This study examines the relationship between strategic choices and the use of strategic management accounting (SMA) techniques in large manufacturing companies and investigates whether external factors such as environmental uncertainty and competitive forces affect the SMA system. The survey results show that SMA usage does not depend on strategy type and only marginally depends on geographic orientation. These findings have been integrated using qualitative data collected in seven large companies through interviews. Although significant progress has been made over the last two decades in describing SMA practices in Europe, the contribution of this study to the accounting (SMA) literature involves both the research content and design. Having identified gaps in previous SMA research, we design a study focused on large manufacturing firms that considers different hypotheses and adopts a mixed method approach.