Strategic Management Accounting Practices Research Articles

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.

Strategic Management Accounting Practices among Indigenous Nigerian Manufacturing Enterprises

The primary objective of this study was to review the extent of application of Strategic Management Accounting Practices (SMAP) by local Nigerian manufacturing enterprises in the making of effective decisions by business managers and accountants. Using a sample of ten manufacturing enterprises, fifty professional accountants and business managers working in the organizations were used in this study. In addition, questionnaires were used for gathering primary data. The Pearson Product Moment Correlation Coefficient and multiple regression analysis were adopted as the main statistical tools for this analysis. The first hypothesis shows a ranking of -0.58 which is less than 0.5 level of confidence. On the other hand, the second hypothesis shows that the sampled enterprises were hindered by inherent barriers in utilizing the benefits of SMAP resulting in the p value of 0.061 which is greater than 0.05. The results of this study indicated significant disapproval of SMAP among professionals working in indigenous manufacturing enterprises. The findings of the study may have implications on the management staff and accountant of the enterprise. Thus, this is because they revealed the below average knowledge of the workings of SMAP. As a result of this research, one is able to conclude on the need for managers to employ SMAP to enable them identify, accumulate, and manage the costs of their activities to ensure accuracy in their decisions making.

Enhancing the Governance of Government Linked Companies via Strategic Management Accounting Practices and Value Creation

Government Linked Companies (GLCs) are expected to achieve sustainable growth and improve their competitiveness in the global market. Value creation can be influenced by the alliance management capability which is a firm's ability to manage several alliances effectively. A strong alliance management capability assists the firm to have an effective implementation of inter-organizational relationships that will benefit alliance partners. Meanwhile, strategic management accounting (SMA) practices consist of various techniques which can enhance value creation in organizations. This practice provides management accounting information used for competitive strategy, firm development, market changes, corporate strategic program, strategic implementation and strategic control. This paper aims to ascertain the mediating role of strategic management accounting (SMA) practices on the relationship between alliance management capability and firms’ value creation in Malaysian GLCs. This paper contribute by providing empirical review which enables the top management, management accountants and policy makers to review the implementation of SMA techniques in order to create firm's value.

Intellectual Capital and Management Accounting Practices: Evidence from Iran

Abstract The purpose of this paper is to propose a framework to investigate the association between the level intellectual capital (IC) and management accounting practices (MAPs) within the Iranian public listed companies. In particular, it aims to examine whether companies with higher level of IC are more likely to place importance on more contemporary management accounting (MA) approaches. The premise of “fit as mediation” of contingency theory is borrowed to explore the potential association between the level of IC and the use of specific MA perspectives in terms of performance measurement and budgetary control techniques. This model brings more useful insight in linking IC to MAPs and those techniques which tend towards strategic-oriented approaches within Iranian context, thereby suggesting that some evolution in MAPs stems from focusing too intently on IC and intangibles. The Iranian public listed companies from Tehran Stock Exchange (TSE) are selected as the ideal setting to examine the relationship between IC and MAPs since most of them are medium to large-sized companies that plausibly enjoy greater resource available for investment in knowledge-based resources and also actively engaged in more innovative and strategic MAPs. This study provides insights into the way practitioners and organizations adopt appropriate MA approaches, to be aligned with the level of IC in a company, with the ultimate purpose of taking full advantage of those knowledge related resources.

Strategic management accounting in close inter-organisational relationships

This paper provides a conceptual comparison between the ‘mainstream strategic management accounting’ literature, the ‘accounting and strategising’ literature and ‘strategic management accounting (SMA) in close inter-organisational relationships’. It concludes that ‘SMA in close inter-organisational relationships’ shares some important characteristics with the ‘accounting and strategising’ literature. Important differences were found, too, though. These mainly concerned the need to understand individuals working for close partners as preparers of strategic information; the need for disaggregated accounting information about unique connections to close partners and about the role of indirect benefits that follow from close connections and the need for the company to not only collect information but also disperse diverse information within close inter-organisational relationships. Through an intensive case study of a global robot manufacturer, Robotics, this paper also provides novel empirical evidence on ‘SMA in close inter-organisational relationships’. For instance, SMA practices included indirect benefits, something mainly neglected in the existing literature on SMA. These indirect benefits involved a close customer's willingness to invest time and effort in Robotics’ technological development, thereby contributing to Robotics’ ability to attain revenue gains in its interactions with other customers. Our findings also have important implications for the ‘inter-organisational accounting’ literature, for instance, by highlighting the need to link more explicitly strategic decision-making with the current interest in the role of accounting in inter-organisational dynamics.

Strategic management accounting practices in hospitals

PurposeThe purpose of this paper is to give an overview of the use of strategic management accounting (SMA) techniques in hospitals under competitive market environments. The paper analyses the dissemination of SMA techniques in consideration of structural characteristics and perform a cluster analysis in order to investigate performance differences between various groups of hospitals.Design/methodology/approachThe paper collected empirical data in a nationwide survey of German general hospitals. Analyses are based on questionnaires from 116 hospitals.FindingsResults show that strategies are applied and regularly adjusted in most hospitals. However, SMA techniques are not in widespread use. The paper explores performance differences between the clusters comprised. The paper finds evidence that the use of SMA techniques varies among hospitals based on their structural characteristics.Research limitations/implicationsThe authors' exploratory analysis suggest that further study exploring both the determinants and effects of the use of SMA techniques in hospitals represents an interesting path for future research. This study is subject to limitations, particularly concerning the limited number of contextual variables and performance measures taken into consideration.Practical implicationsConsidering the limited use of SMA techniques, this paper conclude that hospitals should consider the adoption of additional practices. The paper identifies particular potential for development in the areas of risk management and capital budgeting methods.Originality/valueThis study provides the first comprehensive overview of SMA techniques used in hospitals and advances the literature, which primarily includes case study evidence on single SMA techniques or analyses of the impact of strategies and health reforms on “conventional” management accounting practices. This paper, then, constitutes a useful starting point for further research on SMA practices in hospitals.

The paradox of strategic management accounting

The evidence that strategic management accounting (SMA) techniques have not been adopted widely and that developments in the SMA literature seem to have languished may be consistent with the relatively short lifecycle of most strategic management (SM) tools and many concepts. Nevertheless, there is an inherent contradiction between the apparent decline of SMA and the sustained growth in the number of concepts, models, tools, theoretical perspectives, disciplines, academic and professional journals and consultancy practices that populate the SM domain.This paradox of SMA is explored in the context of the evolution of the SM literature, SMA practice, as exemplified by two recent case studies, and the cognate literatures of management control, performance measurement and knowledge management. It transpires that the SMA literature is based in large part on a narrow, first-era, view of the SM literature that reached maturity with Michael Porter's industry analysis model and generic competitive strategies.The second era of SM that began in 1977 with a move to a more internal, resource-based view of the firm and competitive advantage has been mostly neglected by the extant SMA literature. However, to judge from the small number of published case studies, SMA practices are developing in line with their strategy formulation and organisational processes. The links among the bundle of techniques that are usually included in SMA and between SMA and cognate literatures need to be integrated into a coherent, cohesive framework to complement SM.

Strategic Management Accounting Practices in a Competitive Environment: A Theoretical Exposition

This paper examines a theoretical exposition of strategic management accounting practices in a competitive environment with a view to determining its relevance in achieving competitive advantage. To achieve this objective, a critical review of extant literature on the concept of strategic management accounting, forms of strategic management accounting and the role of strategic management accounting in developing competitive strategies, was made. It was revealed from our analysis that the strategic management accounting is superior to the traditional management accounting in the provision of information that meet environmental demands, particularly in the area of competition. It was therefore concluded that corporate executives should take advantage of the strategic management accounting as an information system if they must gain competitive edge over their rivalries.

Strategic management accounting and the strategising mindset in an English higher education institutional context

PurposeThe purpose of this paper is to explore the concept of strategic management accounting (SMA) in an English university. It is in search of and investigates SMA practices and processes, and their meaning to participants in an English university context. The higher education (HE) institution under research had gone through a major change a couple of years prior to this study, including implementation of new strategic management and management accounting practices.Design/methodology/approachThe approach taken is an interpretive one and the adopted methodology is grounded theory according to Glaser's evolved approach. Data collection took place largely through interviews and, where possible, participant observation.FindingsThe main findings of the research concern the core concept of the strategising mindset, which encapsulates the institutional, divisional and individual stance towards strategy and SMA. The strategising mindset is understood as the belief system that is adopted with regard to SMA, which is divided into a bureaucratic and an entrepreneurial mindset. According to the respective mindset, accounting for strategic management is dealt with and institutional members' perceptions of SMA are shaped. The particular mindset adopted depends on the context members were and are functioning, which reflects Bourdieu's theory of practice.Originality/valueThe main contributions are the emergent theoretical framework on SMA in HE, the concept of the strategising mindset and resulting views and conclusions on what SMA actually means in practice. To the authors' knowledge, no such theoretical framework has been published to date.

An international comparison of strategic management accounting practices

Following a consideration of what accounting practices may comprise strategic management accounting (SMA), the results of a questionnaire survey investigating the incidence and perceived merit of 12 SMA practices are reported. The survey sample comprises large companies in New Zealand, the United Kingdom and the United States. There is a wide range of application rates for the 12 practices appraised; competitor accounting and strategic pricing are the most widely-used. Most of the SMA practices appraised are not widely used. However, based on the perceptions of the benefits from adopting such practices, the potential for greater use exists in all countries examined. Cross-country comparisons highlight fairly similar levels of SMA usage. However, when controlling for company size, there is a suggestion that some practices are used relatively more in N.Z. and relatively less in the U.K. and U.S. There appears to be negligible use of the term `strategic management accounting' in organizations and practising accountants have a limited appreciation of what the term means.