ترجمه مزیت منابع اطلاعاتی مشتری ، استراتژی بازاریابی و عملکرد تجاری

Management Accounting Research 50 (2021) 100725
Available online 28 November 2020
1044-5005/© 2020 Elsevier Ltd. All rights reserved.
Management accountants and strategic management accounting: The role
of organizational culture and information systems
Wael Hadid a,*, Mahmoud Al-Sayed b
a Brunel University London, Brunel Business School, Kingston Ln, Uxbridge, London, UB8 3PH, UK
b University of Southampton, UK
A R T I C L E I N F O
Keywords:
Strategic management accounting
Management accountant networking
Organizational culture
Information system quality
A B S T R A C T
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 outcomeoriented 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.
1. Introduction
The literature on strategic management accounting (SMA) has
significantly expanded since the work of Simmonds (1981) and a number of SMA practices have been introduced (Rigby and Bilodeau, 2015;
Cadez and Guilding, 2012, 2008; Langfield-Smith, 2008; Guilding et al.,
2000). Since then, interest has been growing to establish the popularity
of such practices among firms and determine their impact on firm performance (Rigby and Bilodeau, 2015; Guilding et al., 2000). However,
while some empirical studies have documented that SMA practices
brought into use have led to better firm performance (Alamri, 2019;
Pavlatos and Kostakis, 2018; Turner et al., 2017; Cravens and Guilding,
2001; Guilding et al., 2000), others have reported disappointing
implementation rates (Lachmann et al., 2013; Langfield-Smith, 2008;
Hyvonen, ¨ 2003; Cravens and Guilding, 2001; Guilding et al., 2000).
Such results are surprising to many researchers who have expected SMA
practices to spread widely in practice given their potential in helping
managers address increasing levels of competition and uncertainty, and
to make more informed strategic decisions (Bhimani and
Langfield-Smith, 2007; Bromwich and Bhimani, 1994; Dixon and Smith,
1993; Bromwich, 1990; Simmonds, 1981).
To explain the unexpected low implementation rates of SMA practices, a stream of literature has emerged in which scholars contend that
they may be context-specific. In other words, they are likely to be
implemented in certain situations but not others; therefore, identifying
the characteristics of such contexts has become an important goal
(Cescon et al., 2019; Baird et al., 2018; Ax and Greve, 2017; Turner
et al., 2017; Cadez and Guilding, 2012, 2008; Naranjo-Gil et al., 2009;
Cinquini and Tenucci, 2010; Baird et al., 2007; Dunk, 2004).
However, the aforementioned literature is limited in various ways.
First, most studies focus on merely one or two SMA practices, such as
activity-based costing/management (Baird et al., 2018; Naranjo-Gil
et al., 2009; Langfield-Smith, 2008; Al-Omiri and Drury, 2007; Baird
et al., 2007), balanced scorecard (Ax and Greve, 2017; Naranjo-Gil et al.,
* Corresponding author.
E-mail addresses: [e-mail] (W. Hadid), [e-mail] (M. Al-Sayed).
Contents lists available at ScienceDirect
Management Accounting Research
journal homepage: www.elsevier.com/locate/mar
https://doi.org/10.1016/j.mar.2020.100725
Received 18 February 2020; Received in revised form 11 November 2020; Accepted 12 November 2020
Management Accounting Research 50 (2021) 100725
2
2009) or life cycle costing (Dunk, 2004). Yet, these scholarly efforts fail
to provide evidence confirming that the appropriate context for one
SMA practice could also be conducive to all others. Without evidence
through empirical testing, generalization of their findings to other SMA
practices could be questionable (Emsley, 2005).
Second, studies analysing a relatively larger set of SMA practices to
address the abovementioned limitation remain very few and are thus far
unsuccessful in conclusively identifying influential factors associated
with the implementation of SMA practices (Cescon et al., 2019; Pavlatos
and Kostakis, 2018; Turner et al., 2017; Cinquini and Tenucci, 2010;
Cadez and Guilding, 2008). More specifically, while the roles of some of
the proposed variables did not gain any empirical support, such as
company orientation (Cescon et al., 2019), advanced manufacturing
technology (Baines and Langfield-Smith, 2003) and company ownership
(Yazdifar et al., 2019), mixed results were reported for all other variables, including business strategy (Cescon et al., 2019; Turner et al.,
2017; Naranjo-Gil et al., 2009; Cadez and Guilding, 2008), market
orientation (Turner et al., 2017; Cadez and Guilding, 2008), management accountant involvement (Yazdifar et al., 2019; Cadez and Guilding, 2008; Emsley, 2005) and firm size (Cinquini and Tenucci, 2010;
Naranjo-Gil et al., 2009; Cadez and Guilding, 2008).
Third, almost all of the studies outlined above have developed and
tested perhaps reductive models in which the proposed contingency
variables have been assumed to independently influence SMA practices,
in isolation from each other (Cescon et al., 2019; Baird et al., 2018;
Turner et al., 2017; Cadez and Guilding, 2012, 2008; Cinquini and
Tenucci, 2010; Baird et al., 2007; Dunk, 2004). There has been a paucity
of attempts at building more holistic, complex models which may better
capture the more intricate ways through which variables may interrelate, including potential interactions. Approaches as these would be
crucial and timely, given the inconclusive results reported in prior
studies on the independent impact of the proposed contingency variables (Otley, 2016). Such insignificant or inconclusive empirical findings leave practitioners and researchers unclear about the influential
factors which may facilitate or hinder the implementation of SMA
practices. Among others, Cadez and Guilding (2008) acknowledge the
limitations of their tested model and urge researchers to undertake more
research, in order to identify other significant contingent variables that
might aid in establishing and understanding the contexts in which SMA
practices could best be implemented. Lachmann et al. (2013) has more
recently echoed Cadez and Guilding’s (2008) call with similar requests
for further research on the determinants of SMA practices.
In the current study, we attempt to address these limitations and
respond to the calls by Cadez and Guilding (2008) and Lachmann et al.
(2013) in three different ways. Firstly, we include a relatively larger
number of SMA practices (twelve) rather than focusing on only one or
two, as has been the case in the majority of prior studies (Baird et al.,
2018; Gupta and Salter, 2018; Ax and Greve, 2017; Naranjo-Gil et al.,
2009; Baird et al., 2007; Dunk, 2004), enabling our reporting on
important contingency variables for a larger set (Cadez and Guilding,
2008). Secondly, we explore the potential role of three variables, namely
management accountant networking, information systems (IS) quality
and organizational culture, which have received little attention in the
SMA literature to date, and to our knowledge have not been simultaneously examined in any model in this stream of literature. Thirdly, we
develop a more integrated and complex model than in prior studies, by
examining not only independent impacts but also potential moderating
and mediating effects to better understand how the three main variables
influence SMA implementation. Furthermore, we control for the potential effects of a number of other variables, namely competition,
product diversity, perceived environmental uncertainty and firm size,
for robustness.
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. This implies that, in some
companies, management accountants who interact or communicate
with other decision makers may find it easier to propose and implement
SMA practices in the presence of high-quality IS. This may clarify why
management accountants networking with other decision makers did
not always lead to greater implementation of SMA practices, as
demonstrated by Cadez and Guilding (2012) and Roslender and Hart
(2003).
Unlike IS quality, we do not find empirical support for similar
moderating effects by the two organizational culture variables (i.e.
outcome-oriented and innovation-oriented) on the networking-SMA
implementation relationship1 . Nonetheless, our evidence suggests that
both types of culture still influence SMA implementation though in
different ways. The innovation-oriented culture has an indirect positive
impact on SMA implementation through networking but not a direct
one. As such, an innovation-oriented culture seems to motivate management accountants to network internally and externally which helps
them to acquire the knowledge and skills needed to identify new ideas/
practices and implement the most relevant ones including SMA practices
(Lapsley and Rekers, 2017; Yigitbasioglu, 2016; Emsley, 2005).
In the case of outcome-oriented culture, we find it to have a direct
positive impact on SMA implementation but not an indirect one through
networking. This indicates that the implementation of SMA practices in
outcome-driven companies is not determined by management accountant networking only. That is, our results suggest that even if management accountants do not network and hence are unable to satisfactorily
contribute to SMA implementation, managers in other functions may
implement these practices by themselves (Fish et al., 2017; Carlsson--
Wall et al., 2015; Lord, 1996). Managers in outcome-driven companies
are mainly driven by achievement, actions, results and high performance expectations (Baird et al., 2018, 2007; O’Reilly et al., 1991), and
their performance is likely to be evaluated accordingly. To achieve their
targets and effectively perform their managerial/strategic responsibilities, our findings suggest that such managers, in the absence of
competent management accountants, possibly collect the information
they need including through SMA practices (Bruns and McKinnon,
1993). This may explain the significant direct positive impact of
outcome-oriented culture on SMA implementation documented in our
study.
Prior research has documented empirical evidence of the lack of
management accountants’ contribution towards the implementation of
SMA practices (Yazdifar et al., 2019; Carlsson-Wall et al., 2015; Lord,
1996), and the competing role of operations managers in terms of collecting the information they need including through SMA practices (Fish
et al., 2017; Carlsson-Wall et al., 2015; Burns and Vaivio, 2001; Bruns
and McKinnon, 1993). However, our findings on the two culture variables propose that this lack of contribution by management accountants
and the competing role of operations managers may possibly be more
observed in companies with an outcome-oriented culture.
From a theoretical perspective, our study contributes to the SMA
literature by developing and testing a more integrated, complex model,
to shed light on the potential role of management accountant
networking, IS quality and organizational culture in the implementation
of SMA practices, which have not been simultaneously examined in a
single model. By doing so, we are able to reveal the importance of these
three in determining the implementation of a relatively large set of SMA
practices. Moreover, we show how quality IS may enhance the ability of
management accountants who communicate or interact with internal
and external parties to contribute to the implementation of SMA
1 Throughout this paper, the term “innovation-oriented culture” is used to
imply a higher emphasis on this type of culture in organizations as opposed to a
lower/no emphasis on it. The same applies to the term “outcome-oriented
culture”.
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
3
practices. Such results offer a potential explanation to the findings of
prior studies that document a lack of relationship between management
accountant networking and the implementation of SMA practices (Cadez
and Guilding, 2012; Roslender and Hart, 2003). Finally, our study also
documents how two different types of culture (i.e. outcome-oriented and
innovation-oriented) influence SMA implementation in different ways
(i.e. directly or indirectly through management accountant networking).
There are two key points to take away from our findings. First,
management accountants need to interact or communicate with internal
decision makers and others in their supply chain. Those who do are more
able to contribute to the implementation of SMA practices, and the existence of quality IS facilitates the implementation of these practices.
Second, in the absence of competent management accountants capable
of initiating and implementing SMA practices, other managers are likely
to implement these practices even if their management accountants are
not part of the process.
The remainder of the paper is structured as follows. In section 2, we
present a summary of the relevant literature and develop our hypotheses. The methodology and data collection are detailed in section 3,
whilst the analyses and results are explained in section 4. The final
section is devoted to the discussion and conclusion.
2. Literature review and hypotheses development
2.1. SMA and the need for more empirical research
The term ‘strategic management accounting’ (SMA) was coined
about 40 years ago by Simmonds (1981, p.26) describing it as “the
provision and analysis of management accounting data about a business
and its competitors for use in developing and monitoring the business
strategy”. Definitions offered by scholars since tend to vary (Cadez and
Guilding, 2008; Langfield-Smith, 2008). Bromwich (1990, p.28) deems
it to be “the provision and analysis of financial information on the firm’s
product markets and competitors’ costs and cost structures and the
monitoring of the enterprise’s strategies and those of its competitors in
these markets over a number of periods”. For Dixon and Smith (1993,
p.605), SMA is defined as “the provision and analysis of information
relating to a firm’s internal activities, those of its competitors and current and future market trends, in order to assist in the strategy evaluation process”.
In this study, we adopt Simmonds’s definition for two reasons. First,
unlike Bromwich’s view, Simmonds acknowledges the role of nonfinancial information provided by management accounting which is
also important for decision makers developing and evaluating strategy
(Bhimani and Langfield-Smith, 2007). Second, while Dixon and Smith’s
definition focuses on “information” in general, Simmonds’s definition
relates SMA more clearly to management accounting by focusing on
“management accounting data”.
To put the theoretical concept of SMA into action, some techniques/
practices are needed and such practices must overcome the lack of
strategic orientation of traditional management accounting practices
which encourage short-term and internal/inward focuses (Cadez and
Guilding, 2012; Guilding et al., 2000). In this respect, prior research has
concurred that for a management accounting practice to be helpful in
developing and evaluating strategy and hence be identified as a SMA
practice, it should possess one or both of the following characteristics:
(a) long-term orientation and (b) external/outward focus (Cadez and
Guilding, 2012, 2008; Cravens and Guilding, 2001; Guilding et al.,
2000).
Building on the aforementioned criteria, a number of introduced
practices have been associated with SMA, including target costing, life
cycle costing and competitor position monitoring (Langfield-Smith,
2008)2 . As such, a modest stream of literature has emerged, with interest in measuring the diffusion of such practices among firms and
understanding the factors which facilitate or hinder their implementation (Yazdifar et al., 2019; Cescon et al., 2019; Turner et al., 2017; Rigby
and Bilodeau, 2015; Cadez and Guilding, 2012, 2008; Hyvonen, ¨ 2003;
Cravens and Guilding, 2001; Guilding et al., 2000).
However, disappointing implementation rates of SMA practices have
been documented (Langfield-Smith, 2008; Cravens and Guilding, 2001;
Guilding et al., 2000) along with ambiguous results in relation to the
factors proposed to explain variations in the implementation rates of
SMA techniques observed in practice (Yazdifar et al., 2019; Cescon et al.,
2019; Turner et al., 2017; Cadez and Guilding, 2012, 2008; Hyvonen, ¨
2003). As evident in Table 1, a number of the proposed contingency
variables (such as advanced manufacturing technology, company
orientation, company ownership and IS quality) were found insignificant in explaining why some companies implemented SMA practices
while others did not. However, mixed and inconclusive results were
reported for all other variables such as business strategy, market
orientation, management accountant involvement and firm size (see
Table 1). In line with calls by scholars for more large-scale studies in this
relatively neglected area (Lachmann et al., 2013; Cadez and Guilding,
2008), the above results should indeed prompt further empirical
research to better understand what may encourage or prevent the
implementation of SMA practices.
2.2. Management accountant as a strategic information provider
Since the conception of SMA in the early 1980s, researchers have
envisaged a critical role for management accountants in providing
strategic information and, by extension, in the initiation and implementation of SMA practices (Dixon and Smith, 1993; Shank, 1989;
Simmonds, 1981). Remarkably, however, empirical evidence has
revealed they play a limited role in this respect (Yazdifar et al., 2019;
Carlsson-Wall et al., 2015; Lord, 1996). Such a limited role may be
attributed to five reasons which determine the ability of management
accountants to provide relevant strategic information that decision
makers can exploit, and to initiate and implement SMA practices. These
include:
(1) Understanding the business environment and operational complexity:
Carlsson-Wall et al. (2015) articulated in their case study how management accountants were excluded from making strategic decisions in
an inter-organizational context. They were simply believed to have
insufficient awareness of the technical complexity surrounding the
development of a strategic inter-organizational relationship. This concurs with Yazdifar et al. (2019) who interviewed management accountants who conceded that other managers were more aware of the
business environment and the technicality of operations and hence more
equipped to suggest and implement innovations.
(2) Understanding the information needs and information processing
traits of decision makers: In the majority of the interviews undertaken by
Pierce and O’Dea (2003), management accountants did not exhibit an
adequate understanding of what information and management accounting practices production managers and sales managers needed or
could benefit from. Uecker (1978) and Brecht and Martin (1996)
emphasized the importance of understanding the IS user’s behaviour
which should be taken into account by accountants when deciding what
system design to adopt and what information to provide. Otherwise, the
IS they design may not be used by decision makers and they may lose
their status as information providers (Van der Veeken and Wouters,
2002; Brecht and Martin, 1996).
(3) Awareness of management accounting innovations, including SMA
practices and the know-how for their implementation: Tillmann and
2 See Guilding et al. (2000) and Cadez and Guilding (2008) for a more
complete list of these practices.
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
4
Goddard (2008) argued that management accountants should be aware
of what management accounting practices are available, what information they provide and how they can be correctly implemented in
order to generate relevant and useful information that decision makers
can exploit effectively. However, Yazdifar et al.’s empirical findings
(2019) pointed to the difficulty in addressing Tillmann and Goddard’s
requirements. The management accountants they interviewed admitted
that their knowledge of management accounting innovations was only
at theoretical levels and they lacked the capability and confidence to put
them into action.
(4) The ability to identify what practices are appropriate and useful for
implementation: This is an important skill that management accountants
should also acquire in order to only implement the most appropriate and
useful practices which generate information critical for decision makers,
given the task in hand (Cadez and Guilding, 2008; Emsley, 2005; Otley,
1980).
(5) The competition management accountants face in their own practice
from other managers: Managers in other functions, particularly operations and marketing, have been reported to develop their own information systems including to encompass SMA information (Van der
Veeken and Wouters, 2002; Bruns and McKinnon, 1993). For instance,
Sedevich-Fons (2018) attributed the low recognition of many SMA
practices in the management accounting literature to the fact that they
could also fall within the remit of other disciplines such as operations
management and marketing. Scholars such as Dixon and Smith (1993)
and Lord (1996) detailed how some SMA practices were implemented by
individuals in other organizational functions especially marketing and
operations with no involvement of their management accountants.
To summarize, to the extent that management accountants face one
or more of the five issues outlined above, their contribution to the
provision of strategic information and their ability to initiate and
implement SMA practices will remain limited.
2.3. Hypotheses development
2.3.1. Management accountant networking and SMA
To overcome the aforesaid five issues facing management accountants, networking has been introduced as a potential solution. Management accountant networking is defined as the communication/
interaction between management accountants and other managers in
their organizations along with professional accounting institutions and
companies across their supply chain (Yigitbasioglu, 2016; Ugrin, 2009;
Emsley, 2005; Newell et al., 1998)3 . Bruns and McKinnon (1993) and
Emsley (2005) urged management accountants to spend more time with
other managers in order to understand their needs and hence be proactive in providing the information they need for making informed decisions. Lapsley and Rekers (2017) concluded that for management
accountants to play a role in strategizing, they need to move beyond the
boundary of the accounting function and interact or communicate with
individuals across both other functions and firms in their supply chain.
In general, it has been presumed that management accountants who
network with both internal managers and employees, other members of
their supply chain and professional accounting institutions may learn
about new accounting practices and understand the business environment better, along with the information needs of managers in other
functions and their information processing traits (Emsley, 2005).
Table 1
Summary of the survey-based contingency theory literature on the determinants of SMA practicesa.
Study Business
strategy
Market
orientation
Management
accountant
involvement
Firm
size
Advanced
manufacturing
technology
Company
orientation
IS
quality
Ownership (subsidiary
vs. independent)

Booth et al. (2000)	0
Hyvonen ¨ (2003)	0

Baines and LangfieldSmith (2003)
(+) 0
Emsley (2005) +
Cadez and Guilding
(2008)
(+) 0 + +
Naranjo-Gil et al.
(2009)
(+) 0
Cinquini and Tenucci
(2010)
0 0
Cadez and Guilding
(2012)
0 + 0
Turner et al. (2017) 0 + 0
Cescon et al. (2019) 0 0
Yazdifar et al. (2019) 0 0
The + and 0 represent positive and no relation respectively.
a The empirical literature focusing on single SMA practices includes hundreds of articles. Therefore, the studies summarized in this table are those which include
more than one SMA practice in their empirical analyses.
3 The role of networking in innovation diffusion has been highlighted in the
innovation and information system literature. Tushman and Scanlan (1981)
emphasized that new ideas and practices could be imported to an organization
through employees who are well connected internally and externally. Both such
avenues are important since an externally connected employee with access to
new knowledge, ideas or practices subsequently needs internal connections to
disseminate these. In the case of enterprise resource planning, Ugrin (2009)
offered empirical evidence confirming the influence of competitors, customers
and suppliers on the decision to adopt this program. Newell et al. (1998) found
significant differences in the level of employee interaction between companies
implementing business process reengineering and their non-implementing
counterparts. Swan and Newell (1995) revealed the positive role professional
associations play in diffusing innovations, and Damanpour and Schneider
(2006) confirmed their findings using data from 1200 US manufacturing firms.
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
5
Further, through communicating and interacting with these parties,
management accountants can develop the competence and knowledge
to select appropriate accounting practices and implement them successfully (Tillmann and Goddard, 2008). This is expected to ultimately
increase their ability to provide strategic information and contribute to
the implementation of SMA practices (Lapsley and Rekers, 2017; Emsley, 2005; Pierce and O’Dea, 2003).
Empirical evidence of the importance of networking for the implementation of management accounting practices exists though limited in
quantity. Anderson (1995) and Bjørnenak (1997) explicated the role of
information gained from professional courses, academics, auditors,
other business divisions of the same company and other companies in
the decision of General Motors and a sample of Norwegian companies to
adopt ABC. In a case study analysis by Ma and Tayles (2009), the main
reasons behind changes in the management accounting function and the
adoption of certain SMA practices were competition and mimetic
behaviour. Roslender and Hart (2002), in their field study of ten companies, articulated how management accountants and marketing managers were continuously engaged and communicated intensively in
exploring the feasibility of several SMA practices, especially customer
profitability analysis, ABC and benchmarking.
Tillmann and Goddard (2008) reported, by means of a case study,
how the intensive involvement of management accountants in the
everyday life of managers enabled them to implement a number of SMA
practices, including competitor accounting, value chain accounting and
ABC. Emsley’s survey study (2005) theorized and empirically determined that management accountants who were more engaged with
other managers were more likely to be innovative and develop radical
management accounting initiatives to meet the needs of other managers
and users of information. Further support was provided by Cadez and
Guilding (2008) who tested the impact of management accountant
involvement in strategic decisions on the usage of SMA practices. Using
data from 193 Slovenian companies, their empirical analysis revealed a
positive relationship. As such, the following hypothesis will be tested:
H1. Management accountant networking is positively related to the
implementation of SMA practices.
Interestingly, however, not all studies were successful in confirming
the above hypothesis. Roslender and Hart (2003) observed, in a field
study, a high level of communication and cooperation between accountants and marketing managers, although a low level of implementation of SMA practices in the examined firms. Cadez and Guilding
(2012) confirmed their findings, with 12 % of a sample of 109 firms
reporting a high level of accountant involvement in strategic decision
processes, but low-to-moderate levels of SMA practice uptake. The evidence in these two studies suggest that the impact of management accountant networking may also be contingent on other factors.
Identifying these could be crucial to understanding the results on the
role of management accountants in the implementation of SMA practices reported earlier. Accordingly, we now explore the potential role of
IS quality and organizational culture.
2.3.2. IS quality, management accountant networking and SMA
The value and importance of information for decision makers has
been well established in the literature (Schaltegger and Zvezdov, 2015;
Dunk, 2004; Firmin and Linn, 1968). Many organizations have been
trying to develop high-quality integrated IS in order to help managers
and decision makers effectively perform their tasks and make informed
decisions (Maiga et al., 2014; Booth et al., 2000). High-quality integrated IS are usually defined as systems which facilitate the collection,
aggregation, storage and accessibility of data and information from
divergent functions, such as accounting, sales, marketing and operations
(Al-Omiri and Drury, 2007; Dillard, 2000). Consequently, such IS are
believed to enable decision makers from across functions to access and
transmit more detailed and relevant information, which can be relied on
for various purposes (Maiga et al., 2014; Maiga, 2012; Al-Omiri and
Drury, 2007; Granlund and Mouritsen, 2003). If such IS are updated in
real time, the relevance and usefulness of data and information will be
further enhanced with an increase in the visibility of organizational
processes and consumed resources (Bruns and McKinnon, 1993). In this
sense, a few researchers have contended that high-quality IS could
facilitate and encourage the adoption of new management accounting
practices including SMA practices (Al-Omiri and Drury, 2007; Dunk,
2004).
Conversely, high-quality IS may also hinder the adoption of new
management accounting practices, including SMA (Yigitbasioglu, 2016;
Granlund and Mouritsen, 2003; Krumwiede, 1998; Malmi, 1997;
Anderson, 1995). This potential negative impact could be attributed to
two factors. First, as noted by Luft (2009); Dillard (2000) and Otley
(1980), accounting information only represents one dimension of
broader IS, which, beyond financial information, may also include
physical and non-financial information from other functions like marketing, sales, logistics, management or operations. Physical,
non-financial information is increasingly competing with cost and other
financial information to the extent that some managers discard the latter
and rely mostly on the former for making operational and, to some degree, strategic decisions (Hall, 2010; Luft, 2009; Davila and Wouters,
2007; Van der Veeken and Wouters, 2002; Bruns and McKinnon, 1993).
Therefore, insofar as (1) managers perceive the information provided by
their existing IS to be sufficient for decision making, planning and
control (Van der Veeken and Wouters, 2002; Krumwiede, 1998;
Anderson, 1995; Firmin and Linn, 1968) and (2) they rely on physical,
non-financial information to effectively perform their tasks (Luft, 2009;
Van der Veeken and Wouters, 2002; Bruns and McKinnon, 1993), this
could at least downgrade the importance and value of implementing
new management accounting practices, especially if such practices
mostly just generate cost and other financial information (Davila and
Wouters, 2007; Brecht and Martin, 1996).
Second, the introduction of new management accounting practices
may be resisted if they are believed to affect the existing balance of
information control. According to Bariff and Galbraith (1978); Dillard
(2000) and Schaltegger and Zvezdov (2015), information is power and
those with it have more power over others. They may control resources
previously controlled by other functional managers. Similarly, Markus
and Pfeffer contend that an accounting practice can be more easily
implemented when aligned with existing power distribution. Otherwise,
resistance will surface and challenge the successful implementation of
such practice (1983). This may explain the findings by Anderson (1995),
who highlights in her study of ABC implementation at General Motors
how the compatibility of ABC with existing IS influenced top management decisions to adopt it. The issue of information control and power is
especially important in cases where ownership of the IS is in the hands of
non-accountants (Schaltegger and Zvezdov, 2015; Abernethy and Bouwens, 2005; Hyvonen, ¨ 2003). In such cases, the introduction of new
management accounting practices could be perceived as a threat to the
controllers of the existing IS since their implementation may increase
the value, and by extension the power, of the accounting function
(Abernethy and Bouwens, 2005; Burns and Vaivio, 2001; Markus and
Pfeffer, 1983).
In line with the competing theoretical arguments outlined above,
empirical studies also have produced inconclusive results. Malmi’s study
(1997) refers to a case where managers were relying on informal estimates for costing whose accuracy was later confirmed by an ABC system
implemented for this purpose. Hence, the system was discontinued as
they gained the confirmation sought on the accuracy of their informal
estimates and whether they were on track to achieve their intended
strategy. This shows how the existing IS may substitute for some SMA
practices, ABC in this case. Similar empirical evidence was also documented by Krumwiede (1998) in the case of ABC. Booth et al. (2000)
found that firms using enterprise resource planning systems did not
implement new accounting practices. Al-Omiri and Drury (2007) expected a positive relationship between the usage of high-quality IS and
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
6
the implementation of advanced costing techniques. However, their
empirical analysis could not prove the proposed association. Hyvonen ¨
(2003) found that companies with integrated IS reported a higher
adoption rate of advanced management accounting practices than
companies without integrated IS, though the difference was not statistically significant. A clearer positive relationship was reported by Dunk
(2004) between quality IS and the extent of life cycle costing
implementation.
Clearly, the empirical literature on the impact of IS quality on the
implementation of SMA practices (1) is fairly limited and with focus on a
narrow set of SMA practices, particularly ABC (Al-Omiri and Drury,
2007; Krumwiede, 1998; Malmi, 1997) and (2) has reported inconclusive results. Therefore, building on the theoretical argument outlined at
the beginning of this subsection, we do expect quality IS to influence the
implementation of SMA practices though the direction of that influence
remains an empirical question. As such, the following hypothesis is
non-directional:
H2. There is a relationship between quality information systems and
the implementation of SMA practices.
Whilst H1 and H2 propose independent impacts of management
accountant networking and quality IS on the implementation of SMA
practices, we will argue that quality IS may also moderate the impact of
management accountant networking on SMA practices implementation.
As noted, management accountants who network with other employees
and managers internally and externally are more likely to have an up-todate knowledge of the management accounting practices available and
what information they generate along with the know-how to implement
them (Lapsley and Rekers, 2017; Cadez and Guilding, 2008; Tillmann
and Goddard, 2008; Emsley, 2005). In addition, they will better understand the information needs of other managers (Emsley, 2005; Pierce
and O’Dea, 2003). However, whether such knowledge and understanding will be translated into greater implementation of SMA practices
may depend on the quality of the existing IS. It is possible that, as a result
of interacting with managers and other employees, management accountants may encounter satisfaction with the existing IS; hence there is
no need for additional management accounting practices to be implemented (Bruns and McKinnon, 1993). If management accountants
attempt to implement additional accounting practices, they are likely to
face difficulties in justifying the related costs, and face resistance
(Abernethy and Bouwens, 2005; Burns and Vaivio, 2001; Firmin and
Linn, 1968). In this case, the role of the existing IS will be to weaken the
impact of management accountant networking on SMA practices
implementation.
In contrast, by interacting with other employees and managers,
management accountants may conclude that the implementation of
some SMA practices could help in meeting the information needs of
decision makers. In this case, quality IS may further encourage management accountants to implement those practices by (1) offering a
conducive environment through the provision of some of the necessary
data for implementing the practices (Al-Omiri and Drury, 2007; Dunk,
2004) and/or (2) by enabling the dissemination of the output of such
practices (information) to those decision makers who could benefit from
it (Maiga et al., 2014; Al-Omiri and Drury, 2007; Granlund and Mouritsen, 2003). This could enhance the value and justify the costs of
implementing those particular accounting practices and possibly reduce
the degree of resistance. Following this logic, we test the following
non-directional hypothesis:
H3. Quality information systems moderate the impact of management
accountant networking on the implementation of SMA practices.
2.3.3. Culture, management accountant networking and SMA
Organizational culture is generally defined as the “shared norms and
values that set expectations about appropriate attitudes and behavior for
members of the group” (O’Reilly and Chatman, 1996, p.160). In this
sense, some scholars have presumed it to play a role in the implementation of accounting practices, including SMA practices (Ax and
Greve, 2017; Baird et al., 2007; Markus and Pfeffer, 1983).
For instance, in some organizations, the shared norms and values
may result in an innovation-oriented culture which can be defined as the
pursuit of and experimentation with innovative ideas; seeking new opportunities and accepting higher levels of risk (O’Reilly et al., 1991,
p.505). Such organizations are more likely to accept new ideas and
innovative accounting and non-accounting practices with less resistance
(Baird et al., 2018; Gupta and Salter, 2018). They are more poised to
experiment with and respond positively to new practices and willing to
invest the necessary time, money and other resources in their implementation (Baird et al., 2018). Similarly, an outcome-oriented culture
may also play a role in the implementation of SMA practices. An
outcome-oriented culture can be defined as the extent to which the
shared norms and values emphasize achievement, actions, results and
high-performance expectations4 (O’Reilly et al., 1991, p.505). Therefore, organizations with an outcome-orientation culture are thought to
implement practices believed to drive performance and help in
achieving their pre-determined goals (Baird et al., 2018, 2007). They are
expected to be more committed to providing the necessary infrastructure to successfully implement and benefit from such practices (Baird
et al., 2004).
Empirical research in the SMA literature on the role of organizational
culture has been very limited (for example, Baird et al., 2018; Ax and
Greve, 2017; Zhang et al., 2015; Baird et al., 2007, 2004). Baird et al.
(2004) empirically captured a positive association between the outcome
dimension of culture and the extent of adopting ABC. However, the
innovation dimension of culture was found to be insignificant. Similarly,
Baird et al. (2007) and Zhang et al. (2015) found evidence for a positive
impact of the outcome dimension of culture on the success of ABC.
However, the impact of the innovation dimension of culture was not
supported. In contrast, Baird et al. (2018) reported the innovation
dimension to be positively related to environmental ABC whilst the
outcome dimension was not an important determinant. Ax and Greve
(2017) empirically demonstrated that a fit between organization culture
and the characteristics of an accounting innovation – the balanced
scorecard in this study – is not a sufficient reason for adopting or
rejecting the innovation.
Given the very limited number of studies in the SMA literature on the
role of organizational culture and their focus on single SMA practices
like ABC and balanced scorecard, we believe it is worth re-examining the
respective theoretical arguments, especially in that we include a larger
set of SMA practices. The following hypotheses are tested:
H4a. There is a positive relationship between an innovation-oriented
culture and the implementation of SMA practices.
H4b. There is a positive relationship between an outcome-oriented
culture and the implementation of SMA practices.
In addition to the potential independent impact of organizational
culture on the implementation of SMA practices proposed in H4a and
H4b, we argue that organizational culture may also moderate the impact
of management accountant networking on the implementation of SMA
practices. Through networking internally and externally, management
accountants should be exposed to updated knowledge on new management accounting practices, the information they generate, the information needs of other decision makers in their organizations, and
how such practices could potentially help these managers in carrying
out their tasks effectively through the information they generate
4
It is worth remembering that the innovation-oriented culture and outcomeoriented culture are not mutually exclusive. The shared norms and values in
some organizations may encourage behaviors in line with both (Baird et al.,
2018; Zhang et al., 2015; O’Reilly et al., 1991).
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
7
(Lapsley and Rekers, 2017; Cadez and Guilding, 2008; Tillmann and
Goddard, 2008; Emsley, 2005; Pierce and O’Dea, 2003). However, to
initiate and implement such practices, management accountants could
benefit from a conducive organizational culture. Yazdifar et al. (2019)
revealed a lack of confidence management accountants experience in
practice, which is a major reason for not initiating or proposing new
management accounting practices. Therefore, organizations with an
innovation-oriented culture can help knowledgeable and
well-connected management accountants in two different ways. First, an
innovation-oriented culture may motivate management accountants,
like other employees, to propose innovative solutions to problems with
more confidence that their ideas will not be criticized. This could be
crucial for those who lack confidence or believe that only managers in
operations or marketing are entitled to introduce and implement new
ideas and practices (Yazdifar et al., 2019).
Second, an innovation-oriented culture may also help management
accountants to avoid significant resistance to their proposals from other
functions, since such a culture, by definition, encourages employees and
managers to (1) appreciate any experimentation with new ideas and
practices and (2) respond positively to them (Baird et al., 2018; Gupta
and Salter, 2018; O’Reilly et al., 1991). Markus and Pfeffer (1983) and
Taipaleenm¨ aki (2014) advised that an accounting system can be more
easily implemented if it is congruent with organizational culture.
Otherwise, resistance will surface and undermine its implementation or
uptake. Similarly, Malmi’s study (1997) referred to a case where, due to
the dominant culture of engineers, accounting was neglected. It becomes
clear that an innovation-oriented culture may strengthen the relationship between management accountant networking and the implementation of SMA practices.
Likewise, organizations with an outcome-oriented culture can also
offer a conducive environment for management accountants to initiate
and implement SMA practices. Driven by a focus on achievements, actions, results and high-performance expectations (O’Reilly et al., 1991),
organizations with an outcome-oriented culture are believed to support
initiatives which help them to achieve their pre-determined goals and
become competitive (Baird et al., 2018, 2007). As such, after gaining
knowledge on what information decision makers need to effectively
carry out their tasks and achieve organizational goals through
networking (Cadez and Guilding, 2012, 2008; Tillmann and Goddard,
2008; Emsley, 2005), management accountants will be able to defend
their proposals to implement new management accounting practices by
highlighting the value of such practices and their role in the achievement of organizational goals. This may enfranchise the support needed
to implement the proposed accounting practices (Baird et al., 2018,
2004). In addition, given the available evidence for the superior performance of organizations implementing SMA practices (Alamri, 2019;
Pavlatos and Kostakis, 2018; Cravens and Guilding, 2001; Guilding
et al., 2000), once management accountants use the knowledge gained
through networking to articulate and emphasize the relevance of such
practices and their generated information to what decision makers are
trying to achieve, this is likely to facilitate the decision to implement the
proposed SMA practices (Abernethy and Bouwens, 2005; Emsley, 2005).
As such, the following hypotheses are tested:
H5a. Innovation-oriented culture positively moderates the impact of
management accountant networking on the implementation of SMA
practices.
H5b. Outcome-oriented culture positively moderates the impact of
management accountant networking on the implementation of SMA
practices.
Fig. 1 visually presents the research model and associated
hypotheses.
3. Method
Data were drawn from a survey of CIMA members from the UK
manufacturing sector. The questionnaire was mailed to 1456 business
units that a) are medium or large (over 200 employees) in size, and b)
have at least one CIMA member with a minimum of five years’ CIMA
membership. The Dillman (2000) survey method resulted in 149 usable
responses and a final response rate of 10 %5 . The main reasons given for
non-participation were high workload and company policy. The
responding firms covered a range of manufacturing activities, and no
one industry dominated or exceeded 15 % of the total sample. Table 2
breaks down our sample per industry. The respondents had an average
work history of approximately six years in their current job and 24 years
overall. The average number of employees was 842 and the average
annual sales was £131 million. These profiles indicate that the respondents are suitable and more likely to have the knowledge needed to
respond to the questionnaire.
Non-response bias was assessed by comparing responses from participants and non-participants using Chi-square and Mann-Whitney U
tests in terms of industry type and the duration of the respondents’ CIMA
membership. These were also used to determine whether there was any
significant difference between early and late respondents regarding the
number of employees and annual sales. The tests showed no significant
differences, thus suggesting that non-response bias is not a serious issue
in this study and does not threaten the validity of our findings.
3.1. Variable measurement
3.1.1. Dependent variables
SMA practices: 12 SMA practices used in prior research were included
in this study (Cadez and Guilding, 2012, 2008; Emsley, 2005; Baines and
Langfield-Smith, 2003). They are: strategic costing (SC), life cycle
costing (LCC), activity-based techniques (ABT), target costing (TC),
quality costing (QC), environmental cost management (ECM), competitive position monitoring (CPM), competitor performance appraisal
(CPA), economic value added (EVA), value chain analysis (VCA),
balanced scorecard (BSC), and customer profitability analysis (CPAN).
Respondents were asked to indicate on a seven-point scale (1 = not at
all, 7 = to a great extent) the extent to which each of the 12 SMA
practices was implemented in their business unit. Following the practice
of prior research and to maintain consistency in interpretation (Cadez
and Guilding, 2012, 2008; Baird et al., 2004), we provided the respondents with a glossary sheet containing definitions of each of the
selected SMA practices.
In selecting the 12 practices, the conditions (i.e. long-term orientation and/or external focus) presented in the literature review section
were adopted6 . Table 3 presents the 12 SMA practices and explains how
each practice meets the conditions of being strategically-oriented.
3.1.2. Independent and control variables
Networking: To measure the extent of management accountant
networking, we adapted the items initially developed by Newell et al.
(1998). Respondents were asked to indicate on a seven-point scale (1 =
5 This paper is based on the same dataset already used by Al-Sayed and
Dugdale (2016). However, all hypotheses examined in this paper have not been
tested by Al-Sayed and Dugdale (2016). We used only 149 observations of the
152 ones used by Al-Sayed and Dugdale (2016) due to missing information on
important variables to this current study.
6 While we have included more SMA practices than the majority of prior
studies, we cannot claim to cover all possible SMA practices. However, we
believe that the 12 practices included in our study adequately operationalize
the SMA definition we adopted through practices which (1) meet the conditions
for being strategically oriented (see Table 3) and (2) provide information on the
firm and its competitors.
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
8
never, 7 = extensively) how often they used various networks to learn of
recent ideas in the field of management accounting. The scale consisted
of eight items representing eight different networks, including contact
with colleagues within the respondent’s department, colleagues in other
departments, colleagues in the wider company, CIMA members, members of other professional associations, suppliers, customers and
consultants.
Organizational culture: Two different dimensions of organizational
culture were measured and included in this study. To measure the
innovation-oriented and outcome-oriented cultures, we followed prior
studies (Baird et al., 2018; Zhang et al., 2015; Baird et al., 2007, 2004)7 .
Five items for each dimension were used. Respondents were asked to
indicate on a seven-point scale (1 = not valued at all, 7 = valued to a
great extent) the extent to which each item was valued in their business
unit.
Information system quality: To measure the quality of IS, we followed
prior studies (for example, Al-Omiri and Drury, 2007) and used Krumwiede’s 5-item scale (1998). Respondents were asked to indicate on a
seven-point scale (1 = strongly disagree, 7 = strongly agree) the extent
to which they agree with five statements that reflect the quality of their
business unit’s IS.
Competition: Intensity of competition was measured using a five-item
scale adapted from Williams and Seaman (2001), which was a modified
version of Khandwalla (1977), having also been used by Libby and
Waterhouse (1996). Respondents were asked to indicate on a
seven-point scale (1 = low, 7 = extremely high) the intensity of
competition for their business unit in relation to raw materials, technical
personnel, selling and distribution, quality, prices and variety of
products.
Perceived environmental uncertainty: We followed prior studies that
used Khandwalla (1972; 1977) to measure perceived environmental
uncertainty (Abdel-Kader and Luther, 2008; Govindarajan, 1984). We
adopted Govindarajan (1984), which included 8 items. Respondents
were asked to indicate on a seven-point scale (1 = highly predictable, 7
= highly unpredictable) how predictable each of the following factors is
in the context of their business unit: manufacturing technology,
competitor actions, market demand, product attributes/design, raw
material availability, raw material price, government regulation and
Fig. 1. The research model and associated hypotheses.
Table 2
The distribution of sample firms per industry.
Manufacturing activity/industry Frequency Percent
Aerospace, Aircraft and defence Manufacturing 4 2.7
Manufacture of food products and beverages 21 14.1
Manufacture of tobacco products 1 0.7
Manufacture of textiles 3 2.0
Manufacture of wearing apparel; dressing and dyeing of fur 3 2.0
Tanning and dressing of leather; manufacture of luggage 2 1.3
Manufacture of wood and of products of wood and cork 6 4.0
Manufacture of pulp, paper and paper products 6 4.0
Publishing, printing and reproduction of recorded media 5 3.4
Manufacture of coke, refined petroleum products and
nuclear
4 2.7
Manufacture of chemicals and chemical products 17 11.4
Manufacture of rubber and plastic products 9 6.0
Manufacture of basic metals 3 2.0
Manufacture of fabricated metal products 10 6.7
Manufacture of machinery and equipment not elsewhere
classified
14 9.4
Manufacture of office machinery and computers 3 2.0
Manufacture of electrical machinery and apparatus not
elsewhere
5 3.4
Manufacture of radio, television and communication
equipment
4 2.7
Manufacture of medical, precision and optical instruments 11 7.4
Manufacture of motor vehicles, trailers and semi-trailers 3 2.0
Manufacture of other transport equipment 3 2.0
Manufacture of furniture; manufacturing not elsewhere
classified
4 2.7
Other products including glass, bricks, toys 8 5.4
Total 149 100
7 A more recent measure for organizational culture was introduced by House
et al. (2004) and used by Gupta and Salter (2018). However, because the majority of the empirical survey papers we identified on SMA adopted the measure
developed by O’Reilly et al. (1991), we decided to adopt the same measure in
order to minimize the impact of using different measures on our results and
produce as comparable findings as possible to prior studies in the SMA
literature.
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
9
labour union actions (Govindarajan, 1984).
Product diversity: To measure product diversity, we followed prior
studies (Abdel-Kader and Luther, 2008; Brown et al., 2004) and used
Krumwiede’s 4-item scale (1998). Respondents were asked to indicate
on a seven-point scale (1 = strongly disagree, 7 = strongly agree) the
extent to which they agree with four statements which point to the diversity and complexity of product lines within their business unit.
Firm size: This was measured by the number of employees (Schoute,
2011; Brown et al., 2004) and sales turnover (Al-Omiri and Drury, 2007;
Krumwiede, 1998). Respondents were asked to specify the approximate
number of employees and the approximate annual sales turnover for
their business unit in the last financial year. All measures used in this
study are presented in the Appendix.
4. Analyses and results
Table 4 provides some descriptive statistics for the 12 SMA practices
included in this study. Supporting the conclusions of prior research
(Cadez and Guilding, 2008; Cravens and Guilding, 2001; Guilding et al.,
2000), the implementation rate of SMA practices in our sample is low,
with the majority of practices scoring, on average, below the midpoint
(4) on the 7-point scale used to measure them. CPAN has the highest
average implementation rate (4.41) whilst LCC is the least implemented
practice (2.23) on average.
To test our proposed model and the associated hypotheses, partial
least squares structural equation modeling (PLS-SEM), which has been
commonly adopted in prior accounting research (Caglio, 2018; Fayard
et al., 2012; Lee et al., 2011), is used. PLS-SEM is a variance-based
technique which enables the testing of multiple relations simultaneously using multi-item measures (Hair et al., 2012). In addition,
PLS-SEM produces p values based on the bootstrapping method with
replacement, and hence does not make assumptions on the variables’
distribution, including the normality assumption (Hair et al., 2011).
PLS-SEM is deemed the most appropriate analysis because of the
violation of the normality assumption by a number of the measured
variables including some SMA practices, the sample size and the model
complexity stemming from the number of constructs and interaction
terms to be included (Hair et al., 2012). For confidence in increased
reliability of our results, our model will be estimated and assessed using
5000 bootstrapped samples.
4.1. Validity and reliability
To test the convergent validity of each multi-item construct8, we
inspected the indicators loading. An indicator loading, on its construct,
Table 3
The strategic orientation of each of the 12 practices.
SMA practice Reasons References
Competitor
performance
appraisal (CPA)
Emphasizes external
orientation by focusing on
competitor performance.
Pavlatos and Kostakis
(2018); Cinquini and
Tenucci (2010); Guilding
et al. (2000)
Competitive position
monitoring (CPM)
Emphasizes external
orientation by focusing on
competitor strategy and
market position.
Cescon et al. (2019);
Cinquini and Tenucci
(2010); Guilding et al.
(2000)
Environmental cost
management
(ECM)
Emphasizes external
orientation by focusing on the
firm’s impact on the
environment and the
associated costs.
Cadez and Guilding
(2017); Henri et al.
(2016); Burnett and
Hansen (2008)
Life cycle costing
(LCC)
Emphasizes long-term
orientation by taking into
account the whole life cycle of
a product including after
sales.
Cadez and Guilding
(2008); Cravens and
Guilding (2001); Guilding
et al. (2000)
Balanced scorecard
(BSC)
Emphasizes long-term focus
and external orientation by
including non-financial and
customer-related
perspectives.
Cescon et al. (2019);
Cadez and Guilding
(2008); Cravens and
Guilding (2001)
Quality costing (QC) Emphasizes long-term focus
and external orientation by
taking into account the
impact of quality issues on
customers and stressing the
importance of preventing
quality issues.
Cescon et al. (2019);
Cravens and Guilding
(2001); Guilding et al.
(2000)
Strategic costing
(SC)
Emphasizes long-term focus
and external orientation by
taking into account marketrelated information and
strategic decisions associated
with market penetration and
product positioning.
Turner et al. (2017);
Cravens and Guilding
(2001); Guilding et al.
(2000)
Target costing (TC) Emphasizes external
orientation by taking into
account the price that
customers are willing to pay
for a product.
Cinquini and Tenucci
(2010); Cadez and
Guilding (2008); Guilding
et al. (2000)
Economic value
added (EVA)
Emphasizes long-term focus
by driving managers to avoid
decisions for short-term gains
and less efficient use of the
capital employed.
McLaren et al. (2016);
Woods et al. (2012)
Value chain analysis
(VCA)
Emphasizes external
orientation by attempting to
understand how and where
value is added in all processes
required for a product from
the initial design to
distribution to customers.
Pavlatos and Kostakis
(2018); Turner et al.
(2017); Guilding et al.
(2000)
Activity-based
techniques (ABT)
While ABT may appear
inward looking, its role in
supporting strategy through
its focus on activities has been
documented in a number of
studies. Hence, it has been
identified as a SMA practice.
Hadid, 2019; Cravens and
Guilding (2001); Gosselin
(1997)
Customer
profitability
analysis (CPAN)
Emphasizes external
orientation by focusing on
customer-related data
Turner et al. (2017);
Cadez and Guilding
(2012), 2008
Table 4
Descriptive statistics for SMA practices.
SMA practices Mean Std. deviation
ABT 3.03 1.787
BSC 3.59 2.083
CPA 3.17 1.843
CPM 3.58 1.956
ECM 2.69 1.766
LCC 2.23 1.591
QC 2.54 1.738
SC 3.18 1.973
TC 3.21 1.894
VCA 2.73 1.887
CPAN 4.41 2.040
EVA 2.40 1.766
Activity-based techniques (ABT), the balanced scorecard (BSC), competitor
performance appraisal (CPA), competitive position monitoring (CPM), environmental cost management (ECM), life cycle costing (LCC), quality costing
(QC), strategic costing (SC), target costing (TC), value chain analysis (VCA),
customer profitability analysis (CPAN), and economic value added (EVA).
8 All constructs included in our study have been treated as reflective constructs and have been evaluated accordingly. Some may argue that the SMA
construct could or should be a formative construct. However, since prior studies
(e.g. Pavlatos and Kostakis, 2018; Cadez and Guilding, 2012, 2008) have
modeled it as a reflective construct, we have adopted a similar perspective to
increase the comparability of our results to theirs (Otely, 2016).
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
10
greater than 0.5 was evidence of convergent validity (Hair et al., 2011).
Table 5 presents the indicators loading for the constructs included in
this study and includes all indicators with loading >.5 9 . Composite
reliability higher than 0.7 was evidence of construct reliability (Hair
et al., 2011). Table 5 confirms the reliability of all constructs with the
majority having a reliability value greater than 0.8. Discriminant validity was evaluated by comparing the square root of the average variance extracted (AVE) of each construct with its correlation with other
constructs. As evident in Table 6, in all cases the square root of AVE of
any construct was higher than its correlation with any other construct
supporting the discriminant validity (Hair et al., 2012).
4.2. Hypotheses testing
After ensuring the validity and reliability of the constructs included
in our model, we tested the structural model and associated hypotheses.
Table 7 presents the results. In model 1, the main and control variables
were included whilst, in model 2, three interaction terms were added to
the analysis to test the moderation hypotheses10 .
As seen in Table 7, our proposed variables in model 1 explain a
substantial portion (R2 = 49 %, p = 0.000) of the variation in SMA
practices. This explained variance is higher than what the models in
prior studies could explain, such as Emsley (2005) (R2 = 21 %), Cinquini
and Tenucci (2010) (R2 = 16 %), and Pavlatos and Kostakis (2018) (R2 =
29 %).
Moving to the hypotheses testing, model 1 reveals a significant
positive impact (β = 0.37, p < 0.05) of networking on the implementation of SMA practice, which supports H1. In addition, Table 7 also
documents a significant positive impact of outcome-oriented culture (β
= 0.32, p < 0.05) on the implementation of SMA practices, and only a
marginal one for quality IS (β = 0.13, p < 0.10). These results fully
support H4b but only partially H2. However, whilst the innovationoriented culture (H4a) has a positive coefficient, this is not statistically significant (β = 0.11, p > 0.10). Regarding the control variables,
firm size has a marginally positive impact (β = 0.14, p < 0.10) on SMA
practice implementation, whilst product diversity and competition are
not significant (p > 0.10). After including the three interaction terms
(model 2), the documented impacts of networking, IS quality and the
outcome-oriented culture remain qualitatively unchanged. However,
model 2 in Table 7 suggests a marginally significant moderating impact
(β = 0.18, p < 0.10) of quality IS only, which partially supports H3,
whilst the other interaction terms are found insignificant. Thus, H5a and
H5b are not supported. Fig. 2 visually presents the results of model 2 in
Table 7.
4.3. Additional analyses
Our results in relation to the two culture variables raise some “why”
questions. We found the innovation-oriented culture to have neither an
independent impact on SMA implementation nor did it play a moderating role in the networking-SMA implementation relationship. Similarly, the proposed moderating role of the outcome-oriented culture was
also unsupported. To investigate this further, we tested, from an
exploratory perspective, a modified model (as shown in Fig. 3) which
differed from the initial one presented in Fig. 1 in two ways. First, we
removed the insignificant interaction variables between the two culture
variables and management accountant networking (reflecting H5a and
H5b in Fig. 1). Second, the innovation-oriented and outcome-oriented
culture variables were modeled so that they were presumed to have
both a direct and an indirect impact on SMA implementation through
management accountant networking. Inspecting the correlation matrix
in Table 6, a significant positive correlation was documented between
Table 5
The measurement model.
Construct/item Loading Composite
reliability
Competition (COMP) 0.755
COMP 1 0.835
COMP 2 0.719
Innovation-oriented culture (CULT-INNO) 0.895
CULT-INNO 1 0.873
CULT-INNO 2 0.836
CULT-INNO 3 0.782
CULT-INNO 4 0.837
CULT-INNO 5 0.624
Outcome-oriented culture (CULT-OUTC) 0.871
CULT-OUTC 1 0.818
CULT-OUTC 2 0.686
CULT-OUTC 3 0.584
CULT-OUTC 4 0.862
CULT-OUTC 5 0.821
Product diversity (DIVERS) 0.834
DIVERS 1 0.805
DIVERS 2 0.738
DIVERS 3 0.829
Quality information system (IS-QUAL) 0.913
IS-QUAL 1 0.810
IS-QUAL 2 0.835
IS-QUAL 3 0.833
IS-QUAL 4 0.819
IS-QUAL 5 0.815
Management accountant networking
(NETWORK)
0.877
NETWORK 1 0.666
NETWORK 2 0.775
NETWORK 3 0.598
NETWORK 4 0.721
NETWORK 5 0.759
NETWORK 6 0.636
NETWORK 7 0.646
NETWORK 8 0.682
Firm size (SIZE) 0.806
SIZE 1 0.780
SIZE 2 0.863
Strategic management accounting practices
(SMA)
0.866

SMA 1	0.574
SMA 2	0.520
SMA 3	0.684
SMA 4	0.706
SMA 5	0.658
SMA 6	0.600
SMA 7	0.612
SMA 8	0.661
SMA 9	0.553
SMA10	0.679

9 The items of the PEU construct all had very low loadings (<.5) and hence
the whole construct was removed from the analysis. In addition, CPAN and EVA
(SMA construct), competition in relation to price, raw materials and selling and
distribution (competition construct), and product lines diversity (product diversity construct) were all removed due to their loadings below .5.
10 The interaction terms were computed following the orthogonalizing method
as described by Little et al. (2006). Under this method, the interaction term of
two variables X and Z is represented by the residuals from regressing the
product term X*Z on X and Z, where X*Z is the multiplicative term of X and Z.
As such, the interaction term will have zero correlation with its composing
variables which mitigates the commonly-known collinearity problem and
ensure stable regression coefficients of X and Z when the interaction term is
entered into the model. The orthogonalizing method has been recommended by
Henseler and Chin (2010) and used in a number of accounting studies (e.g.
Peteghem et al., 2018; Glaum et al., 2013; Bruynseels and Willekens, 2012). It is
worth noting that the orthogonalizing method is a built-in function in SmartPLS
3, the software we used in our study.
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
11
management accountant networking and both the outcome-oriented
culture (0.21, p < 0.05) and innovation-oriented culture (0.22, p <
0.01). As such, our modified model tests whether the culture variables
influence the management accounting networking variable itself instead
of moderating its effect on SMA implementation as H5a and H5b previously suggested.
Table 8 summarizes the results and Fig. 3 visually presents them. We
find that the impact of innovation-oriented culture on SMA implementation is fully mediated by management accountant networking.
That is, while the direct impact of innovation-oriented culture on SMA
implementation is not significant as shown in Panel A (β = 0.081, p =
0.232), its indirect impact (β = 0.070, p = 0.028) (Panel B) through
management accountant networking is. In contrast, Table 8 reveals that
the outcome-oriented culture has only a direct positive impact (β =
0.295, p = 0.000) (Panel A) on SMA implementation. While it has a
marginally significant influence (β = 0.160, p = 0.068) on management
accountant networking, its overall indirect impact on SMA implementation through management accountant networking is statistically
insignificant (β = 0.061, p = 0.102) (Panel B). Finally, in this modified
model, the moderating impact of IS quality becomes more statistically
significant (β = 0.261, p = 0.042) as shown in Table 8 (Panel A). The
results of both the main and additional analyses will be discussed next.
5. Discussion and conclusion
This paper set out to contribute to the contingency theory literature
on SMA practices, by developing and testing a more complex theoretical
model than in prior studies, to explain potential factors and the mechanism through which they could influence the implementation of SMA
practices. Using data from 149 UK manufacturing business units, our
findings reveal the importance of networking in increasing the ability of
management accountants to propose and implement SMA practices.
Such results confirm the modus operandi offered in prior research for
management accountants to regain their status as important information
providers (Lapsley and Rekers, 2017; Cadez and Guilding, 2008). By
networking with internal and external parties, management accountants
Table 6
Correlation matrix and AVE^.
COMP CULT-INNO CULT-OUTC DIVERS IS-QUAL NETWORK SIZE SMA
COMP 0.78
CULT-INNO 0.16* 0.80
CULT-OUTC 0.27*** 0.34*** 0.76
DIVERS 0.24** 0.12 0.12 0.79
IS-QUAL 0.12 0.10 0.34*** 0.08 0.82
NETWORK 0.16* 0.22*** 0.21** - 0.01 0.19** 0.69
SIZE 0.10 - 0.06 0.03 0.14** - 0.06 0.18** 0.82
SMA 0.20** 0.30*** 0.49*** 0.16** 0.31*** 0.49*** 0.20*** 0.63
^Values on the diagonal represent the square root of AVE.
*,** and *** represent significant correlations at 10 %, 5% and 1% respectively.
Table 7
PLS analysis of the structural model (dependent variable: SMA).
Standardized β
Independent construct Model 1 P value Model 2 P value VIF
COMP 0.00 0.829 0.02 0.767 1.15
CULT-INNO 0.11 0.170 0.08 0.208 1.19
CULT-OUTC 0.32 0.000 0.30 0.000 1.33
DIVERS 0.10 0.182 0.06 0.424 1.10
IS-QUAL 0.13 0.072 0.11 0.077 1.17
NETWORK 0.37 0.000 0.39 0.000 1.16
SIZE 0.14 0.074 0.09 0.154 1.09
NETWORK * CULT-INNO 0.09 0.504 1.20
NETWORK * CULT-OUTC 0.13 0.369 1.16
NETWORK * IS-QUAL 0.18 0.073 1.11
R Square 0.49 0.000 0.61 0.000
Fig. 2. The PLS results for the research model.
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
12
are expected to learn about new management accounting practices,
understand the information they generate, understand the information
needs of decision makers in their organizations, and hence be able to
propose and implement the most relevant and useful management accounting practices to help decision makers perform effectively (Tillmann and Goddard, 2008; Emsley, 2005; Pierce and O’Dea, 2003).
Furthermore, our results offer a potential explanation for the findings
of Cadez and Guilding (2012) and Roslender and Hart (2003) that, even
supposing management accountants interact or communicate with other
managers, this may not translate into greater implementation of SMA
practices. Our findings suggest that the quality of existing IS could play a
significant role in this respect. We find a positive moderating impact of
quality IS on the relationship between networking and SMA implementation. This implies that management accountants, who interact or
communicate with other decision makers, may find it easier to propose
and implement SMA practices in organizations with high-quality integrated IS. As suggested in prior research, such IS enable the collection
and storage of information from different organizational functions
(Al-Omiri and Drury, 2007; Dillard, 2000), and consequently are
thought to assist decision makers from different functions to access
detailed and relevant information potentially useful for varying purposes (Maiga et al., 2014; Maiga, 2012; Al-Omiri and Drury, 2007;
Granlund and Mouritsen, 2003). In this environment, it seems that
management accountants find it easier to demonstrate the value of the
information the proposed SMA practices generate (Al-Omiri and Drury,
2007; Dunk, 2004). In addition, such information could be disseminated
more widely in their organization when high-quality integrated IS are
already in place (Maiga et al., 2014; Maiga, 2012; Granlund and
Mouritsen, 2003).
Unlike IS quality, we do not find empirical support for similar
moderating effects by the two organizational culture variables (i.e.
outcome-oriented and innovation-oriented) on the networking-SMA
implementation relationship. However, we still find evidence that
both types of culture are conducive to the implementation of SMA
practices though through different mechanisms. More specifically, the
innovation-oriented culture is found to have an indirect positive impact
on SMA implementation through networking but not a direct one. This
suggests that innovation-oriented culture offers a motivating environment for management accountants to network internally and externally.
This networking activity, as explained before, enables management accountants to gain the knowledge and skills needed to identify new ideas/
practices and implement the most relevant ones including SMA practices
(Lapsley and Rekers, 2017; Yigitbasioglu, 2016; Emsley, 2005).
In contrast to the innovation-oriented culture, we find a direct positive impact of outcome-oriented culture on SMA implementation but
not an indirect one through networking. These results confirm the
similar positive impact of the outcome-oriented culture reported by
Zhang et al. (2015) and Baird et al. (2004) in the case of ABC and
generalize it to a larger set of SMA practices. In addition, by examining
both its direct and indirect impact on SMA implementation, our findings
offer additional insights on the potential role of outcome-oriented culture. Having only a direct positive impact on SMA implementation but
Fig. 3. The PLS results for the modified research model (results in bold are for the indirect impact of each culture variable on SMA through networking).
Table 8
PLS analysis of the modified structural model.
Panel A Dependent construct (Standardized β)
Independent construct NETWORK P value SMA P value

CULT-INNO CULT-OUTC

0.187 0.160

0.013
0.068
COMP 0.005 0.968
CULT-INNO 0.081 0.232
CULT-OUTC 0.295 0.000
DIVERS 0.075 0.279
IS-QUAL 0.135 0.070
NETWORK 0.377 0.000
NETWORK * IS-QUAL 0.261 0.042
SIZE 0.120 0.062
Panel B: Indirect effects
CULT-INNO -> NETWORK -> SMA 0.070 0.028
CULT-OUTC -> NETWORK -> SMA 0.061 0.102
R Square 0.092 0.100 0.543 0.000
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
13
not an indirect one through networking indicates that in outcome-driven
companies, the implementation of SMA practices does not necessarily
depend on management accountant networking. Managers in
outcome-driven companies are mainly driven by achievement, actions,
results and high performance expectations (Baird et al., 2018, 2007;
O’Reilly et al., 1991), and their performance is likely to be evaluated
accordingly. To achieve their targets and effectively perform their
managerial/strategic responsibilities, such managers, on average, seem
to engage in collecting the information they need including through
SMA practices even if their management accountants do not network
and hence are unable to satisfactorily contribute (Bruns and McKinnon,
1993). This may explain the significant direct positive impact of
outcome-oriented culture on SMA implementation documented in our
study.
A number of scholars have documented empirical evidence of the
lack of management accountants’ contribution towards the implementation of SMA practices (Yazdifar et al., 2019; Carlsson-Wall et al.,
2015; Lord, 1996). Others have highlighted the competing role of operations managers (e.g. production and marketing) by taking the
initiative to implement and collect information through SMA practices
(Fish et al., 2017; Carlsson-Wall et al., 2015; Burns and Vaivio, 2001).
However, our findings on the two culture variables imply that this lack
of contribution by management accountants and the competing role of
operations managers may possibly be more observed in companies with
an outcome-oriented culture. Because of (1) the lack of data on who
actually implemented SMA practices in our sample firms and (2) the
paucity of research, including case studies, on the role of organizational
culture in the SMA context, some speculation in interpreting the findings
on the culture variables was a necessity, and this should be addressed in
future research.
Like other survey studies, this current study has some limitations.
Firstly, the data was collected from one informant per business unit.
While this method has shortcomings, collecting data from multiple respondents may have a negative bearing on the response rate. Secondly,
while a significant effort has been made to increase the response rate,
from which we managed to collect data from 149 business units, a larger
sample could raise our confidence in the generalizability of results.
Thirdly, despite our attempts to identify and include a higher number of
potential influential factors on SMA implementation, we do not claim
our list to be exhaustive. Future research could also collect data on other
important variables that enhance the predictive ability of our model.
Information on the extent to which SMA practice implementation has
been done by non-accountants could be very useful. This is especially the
case in order to further confirm or suggest an alternative interpretation
to the impact of organizational culture found in our study.
Due to data limitation, we have been unable to shed light on the
exact reasons for which an outcome-oriented culture does not encourage
management accountants to network as strongly as an innovationoriented culture, resulting in its indirect impact on SMA implementation through networking in our analysis to be statistically insignificant
(see Table 8). Future (especially case-based) research could be very
useful to enlighten us about this point. It could also be interesting to
know whether managers in innovation-driven and outcome-driven
companies have different perceptions of the capability of their management accountants and the implications of these perceptions in terms
of who implement SMA practices. Finally, given the nature of data
collected through survey studies such as ours, we cannot make claims
about causality but only relationships between the variables in our
model.
Notwithstanding these limitations, we still believe our study to
usefully contribute to the very limited contingency theory literature on
the determinants of SMA practices and the role of management accountants in this respect (for example, Yazdifar et al., 2019; Cadez and
Guilding, 2012, 2008; Emsley, 2005). First, we have included a larger
number of SMA practices than in the majority of prior studies (Yazdifar
et al., 2019; Naranjo-Gil et al., 2009; Hyvonen, ¨ 2003) and tested the
potential role of three variables (management accountant networking,
quality IS and organizational culture) which have not been examined in
a single model in prior studies. Second, we theorized and tested more
complex relationships than in prior studies, which helps to better understand how these three variables influence the extent of SMA implementation. By doing so, we are able to provide elucidation of the
ostensibly ambiguous findings on the role of management accountants
in prior studies (Yazdifar et al., 2019; Cadez and Guilding, 2012, 2008;
Emsley, 2005; Roslender and Hart, 2003). The implications can be
critical for organizations, especially those contemplating the successful
implementation of SMA practices.
Declaration of Competing Interest
None.
Acknowledgement
This work was financially supported by the Chartered Institute of
Management Accountants (CIMA), for which we are grateful. We would
also like to thank the Editor Theresa Libby and the two reviewers for
their insightful and constructive comments which helped improve the
quality of this paper.
Appendix A
Strategic management accounting practices
1. Using the following scale, please indicate to what extent your business unit uses the following management accounting techniques. If the
technique is still in the process of being implemented, please tick in the last column.
Not at all To a great extent
1 2 3 4 5 6 7
(continued on next page)
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
14
(continued)
Not at all To a great extent
Firm size
2. Please specify the approximate number of employees (full-time equivalents) currently employed in your business unit.
……….. employees
3. Please specify the approximate annual sales turnover for your business unit for the last financial year.
£ ……….. million
Organizational culture
4. The following statements represent a number of business values. To help us to understand the work environment in your business unit, please
indicate the extent to which it is valued in your business unit.
Not valued
at all
Valued to a very
great extent
1. A willingness to experiment 1 2 3 4 5 6 7
2. Not being constrained by many rules 1 2 3 4 5 6 7
3. Being quick to take advantage of opportunities 1 2 3 4 5 6 7
4. Being innovative 1 2 3 4 5 6 7
5. Risk taking 1 2 3 4 5 6 7
6. Being competitive 1 2 3 4 5 6 7
7. Being achievement oriented 1 2 3 4 5 6 7
8. Having high expectations for performance 1 2 3 4 5 6 7
9. Being results oriented 1 2 3 4 5 6 7
10. Being action oriented 1 2 3 4 5 6 7
Product diversity
5. The following statements help us to understand the diversity of manufacturing operations within your business unit. Please indicate the extent to
which you disagree/agree with each following statements:
Strongly
disagree
Neutral Strongly
agree
1. Product lines are diverse. 1 2 3 4 5 6 7
2. Most products require different processes to design, produce and distribute. 1 2 3 4 5 6 7
3. There are major differences in volume/output across product lines. 1 2 3 4 5 6 7
4. The consumption of support department resources (e.g., engineering, purchasing, marketing) varies substantially across product lines. 1 2 3 4 5 6 7
Information system quality
6. Regarding your business unit information technology, please indicate the extent to which you disagree/agree with each following statements:
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
15
Strongly disagree Neutral Strongly agree
1. The business unit’s information systems (e.g. sales, manufacturing) are integrated with each other. 1 2 3 4 5 6 7
2. The information system offers user-friendly query capability. 1 2 3 4 5 6 7
3. Detailed sales and operating data are available in the information system for the last 12 months. 1 2 3 4 5 6 7
4. Many perspectives of cost and performance data are available. 1 2 3 4 5 6 7
5. Manufacturing and other operating data are updated in ‘real time’ rather than periodically. 1 2 3 4 5 6 7
Perceived environmental uncertainty
7. The following statements describe some of the factors that constantly change in the external environment. Using the scale below, for each factor,
please circle the number that corresponds to the predictability or unpredictability of the rate of change within your business unit.
Highly
Predictable
Fairly
Predictable
Slightly Predictable Neutral Slightly Unpredictable Fairly Unpredictable Highly
Unpredictable
1 2 3 4 5 6 7
1. Manufacturing technology 1 2 3 4 5 6 7
2. Competitors’ actions 1 2 3 4 5 6 7
3. Customers’ demand and taste 1 2 3 4 5 6 7
4. Product attributes/design 1 2 3 4 5 6 7
5. Raw material availability 1 2 3 4 5 6 7
6. Raw material prices 1 2 3 4 5 6 7
7. Labour union actions 1 2 3 4 5 6 7
8. Government regulation 1 2 3 4 5 6 7
Competition
8. Using the following scale, please indicate the intensity of competition for your business unit in relation to:
Low Moderate Moderate Extremely high
1. Raw materials 1 2 3 4 5 6 7
2. Technical personnel 1 2 3 4 5 6 7
3. Selling and distribution 1 2 3 4 5 6 7
4. Quality and variety of products 1 2 3 4 5 6 7
5. Price 1 2 3 4 5 6 7
Management accountant networking
9. Using the following scale, please indicate how often you use the following networks to find out about the latest ideas in the field of management
accounting.
Never Moderately Extensively
1. Colleagues within your own department. 1 2 3 4 5 6 7
2. Colleagues in other departments 1 2 3 4 5 6 7
3. Colleagues in the wider company 1 2 3 4 5 6 7
4. CIMA members 1 2 3 4 5 6 7
5. Other professional accounting associations’ members 1 2 3 4 5 6 7
6. Suppliers 1 2 3 4 5 6 7
7. Customers 1 2 3 4 5 6 7
8. Consultants 1 2 3 4 5 6 7
Other, please specify
A Glossary Sheet
Activity-based Techniques (ABT): Any management accounting technique that uses business unit’s activities as its base. Such techniques include: Activity Analysis (AA), Activity Cost
Analysis (ACA), Activity-based Costing (ABC), Time Driven ABC, Activity-based Management (ABM) and Activity-based Budgeting (ABB).
Activity Analysis (AA): Identifying the activities and procedures carried out to convert material, labour and other resources into outputs. Activities that do not
contribute to the value of those outputs may be removed, replaced or diminished. AA does not require cost analysis and does not necessarily
lead to a new overhead allocation method.
Activity Cost Analysis (ACA): Based on AA, ACA aims to identify the costs of each activity and the factors that cause them to vary.
Activity-based Costing (ABC): Approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs. Resources are
assigned to activities, and activities to cost objects based on consumption estimates. The latter utilise cost drivers to attach activity costs to
outputs.
Time-Driven ABC:
(continued on next page)
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
16
(continued)
Activity-based Techniques (ABT): Any management accounting technique that uses business unit’s activities as its base. Such techniques include: Activity Analysis (AA), Activity Cost
Analysis (ACA), Activity-based Costing (ABC), Time Driven ABC, Activity-based Management (ABM) and Activity-based Budgeting (ABB).
Approach to ABC based on the time required for each unit activity. The method avoids the use of interviews with operating managers in order
to estimate percentage of time spent on different areas of work. It is claimed that “time-driven ABC” based on “time per transactional activity”
is simpler to install and update and can highlight unused capacity.
Activity-based Management
(ABM):
Refers to the entire set of actions that can be taken, on basis of activity-based information that aim to increase efficiency, lower costs, improve
asset utilisation and improve profitability.
Activity-based Budgeting (ABB): Method of budgeting based on activity framework and utilising cost driver data in the budget setting and variance feedback process.
Balanced scorecard (BSC): Approach to the provision of information to management to assist strategic policy formulation and achievement. It emphasises the need to
provide the user with a set of information which addresses all relevant areas of performance in an objective and unbiased fashion. The
information provided may include both financial and non-financial elements, and cover areas such as profitability, customer satisfaction,
internal efficiency and innovation.
Competitive position monitoring
(CPM):
The analysis of competitor positions within the industry by assessing and monitoring trends in competitor sales, market share, volume, unit
costs, and return on sales. This information can provide a basis for the assessment of a competitor’s market strategy.
Competitor performance appraisal
(CPA):
The numerical analysis of a competitor’s published statements as a part of an assessment of their key sources of competitive advantage.
Customer profitability analysis
(CPAN):
This involves calculating profit earned from a specific customer. The profit calculation is based on costs and sales that can be traced to a
particular customer. This technique is sometimes referred to as "customer account profitability”.
Economic Value Added (EVATM): Profit less a charge for capital employed in the period. Accounting profit may be adjusted, for example, for the treatment of goodwill and
research and development expenditure, before economic value added is calculated.
Environmental cost management
(ECM):
Identification, collection, analysis and use of two types of information for internal decision making: physical information on the use, flows and
rates of energy, water and materials (including wastes); and monetary information on environment related costs, earnings and savings.
Life cycle costing (LCC): The appraisal of costs based on the length of stages of product or service’s life. Namely: design, introduction, growth, decline and eventually
abandonment (marketing perspective).
Quality costing (QC): Those costs associated with the creation, identification, repair and prevention of defects. These fall into three categories: prevention,
appraisal and internal and external failure costs. Cost of quality reports are produced for the purpose of directing management attention to
prioritize quality problems.
Strategic costing (SC): Using cost data, strategic and marketing information to develop and identify strategies that will sustain a competitive advantage.
Target costing (TC): Estimating a cost calculated by subtracting a desired profit margin from an estimated or market-based price to arrive at a desired production,
engineering or marketing cost, and to design a product which meets that cost.
Value chain analysis (VCA): Use of the value chain model to identify the value adding activities of an entity. (Also Value chain costing: An activity-based approach where
costs are allocated to activities required to design, procure, produce, market, distribute and service a product or service.)
References
Abdel-Kader, M., Luther, R., 2008. The impact of firm characteristics on management
accounting practices: a UK-based empirical analysis. Br. Account. Rev. 40 (1), 2–27.
Abernethy, M.A., Bouwens, J., 2005. Determinants of accounting innovation
implementation. Abacus 41 (3), 217–240.
Alamri, A.M., 2019. Association between strategic management accounting facets and
organizational performance. Balt. J. Manag. 14 (2), 212–234.
Al-Omiri, M., Drury, C., 2007. A survey of factors influencing the choice of product
costing systems in UK organizations. Manag. Account. Res. 18 (4), 399–424.
Al-Sayed, M., Dugdale, D., 2016. Activity-based innovations in the UK manufacturing
sector: extent, adoption process patterns and contingency factors. Br. Account. Rev.
48 (1), 38–58.
Anderson, S., 1995. A framework for assessing cost management system changes: the
case of activity based costing. J. Manag. Account. Res. 7 (Fall), 1–51.
Ax, C., Greve, J., 2017. Adoption of management accounting innovations: organizational
culture compatibility and perceived outcomes. Manag. Account. Res. 34 (March),
59–74.
Baird, K., Harrison, G., Reeve, R., 2004. Adoption of activity management practices: a
note on the extent of adoption and the influence of organizational and cultural
factors. Manag. Account. Res. 15 (4), 383–399.
Baird, K., Harrison, G., Reeve, R., 2007. Success of activity management practices: the
influence of organizational and cultural factors. Account. Financ. 47 (1), 47–67.
Baird, K., Su, S., Tung, A., 2018. Organizational culture and environmental activity
management. Bus. Strategy Environ. 27 (3), 403–414.
Bariff, M.L., Galbraith, J.R., 1978. Intraorganizational power considerations for
designing information systems. Account. Organ. Soc. 3 (1), 15–27.
Bhimani, A., Langfield-Smith, K., 2007. Structure, formality and the importance of
financial and non-financial information in strategy development and
implementation. Manag. Account. Res. 18 (1), 3–31.
Bjørnenak, T., 1997. Diffusion and accounting: the case of ABC in Norway. Manag.
Account. Res. 8 (1), 3–17.
Booth, P., Matolcsy, Z., Wieder, B., 2000. The impacts of enterprise resource planning
systems on accounting practice – the Australian experience. Aust. Account. Rev. 10
(22), 4–18.
Brecht, H.D., Martin, M.P., 1996. Accounting information systems: the challenge of
extending their scope to business and information strategy. Account. Horiz. 10 (4),
16–22.
Bromwich, M., 1990. The case for strategic management accounting: the role of
accounting information for strategy in competitive markets. Account. Organ. Soc. 15
(1–2), 27–46.
Bromwich, M., Bhimani, A., 1994. Management Accounting Pathways to Progress.
Chartered Institute of Management Accountants, London.
Brown, D.A., Booth, P., Giacobbe, F., 2004. Technological and organizational influences
on the adoption of activity-based costing in Australia. Account. Financ. 44 (3),
329–356.
Bruns, W.J., McKinnon, S.M., 1993. Information and managers: a field study. J. Manag.
Account. Res. 5 (Fall), 84–108.
Bruynseels, L., Willekens, M., 2012. The effect of strategic and operating turnaround
initiatives on audit reporting for distressed companies. Account. Organ. Soc. 37 (4),
223–241.
Burnett, R.D., Hansen, D.R., 2008. Ecoefficiency: defining a role for environmental cost
management. Account. Organ. Soc. 33 (6), 551–581.
Burns, J., Vaivio, J., 2001. Management accounting change. Manag. Account. Res. 12 (4),
389–402.
Cadez, S., Guilding, C., 2008. An exploratory investigation of an integrated contingency
model of strategic management accounting. Account. Organ. Soc. 33 (7–8),
836–863.
Cadez, S., Guilding, C., 2012. Strategy, strategic management accounting and
performance: a configurational analysis. Ind. Manag. Data Syst. 112 (3), 484–501.
Cadez, S., Guilding, C., 2017. Examining distinct carbon cost structures and climate
change abatement strategies in CO2 polluting firms. Account. Audit. Account. J. 30
(5), 1041–1064.
Caglio, A., 2018. To disclose or not to disclose? An investigation of the antecedents and
effects of open book accounting. Eur. Account. Rev. 27 (2), 263–287.
Carlsson-Wall, M., Kraus, K., Lind, J., 2015. Strategic management accounting in close
inter-organisational relationships. Account. Bus. Res. 45 (1), 27–54.
Cescon, F., Costantini, A., Grassetti, L., 2019. Strategic choices and strategic management
accounting in large manufacturing firms. J. Manag. Gov. 23 (3), 605–636.
Cinquini, L., Tenucci, A., 2010. Strategic management accounting and business strategy:
a loose coupling? J. Account. Organ. Chang. 6 (2), 228–259.
Cravens, K.S., Guilding, C., 2001. An empirical study of the application of strategic
management accounting techniques. Adv. Manage. Account. 10, 95–124.
Damanpour, F., Schneider, M., 2006. Phases of the adoption of innovation in
organizations: effects of environment, organization and top managers. Br. J. Manag.
17 (3), 215–236.
Davila, T., Wouters, M., 2007. Management accounting in the manufacturing sector:
managing costs at the design and production stages. In: Chapman, C.S., Hopwood, A.
G., Shields, M.D. (Eds.), Handbook of Management Accounting Research, Vol. 2.
Elsevier, Amsterdam, pp. 831–858.
Dillard, J.F., 2000. Integrating the accountant and the information systems development
process. Account. Forum 24 (4), 407–421.
Dillman, D.A., 2000. Mail and Internet Surveys: the Tailored Design Method, 2nd ed.
Wiley, New York.
Dixon, R., Smith, D.R., 1993. Strategic management accounting. Omega 21 (6), 605–618.
Dunk, A.S., 2004. Product life cycle cost analysis the impact of customer profiling,
competitive advantage, and quality of IS information. Manag. Account. Res. 15 (4),
401–414.
Emsley, D., 2005. Restructuring the management accounting function: a note on the
effect of role involvement on innovativeness. Manag. Account. Res. 16 (2), 157–177.
W. Hadid and M. Al-Sayed
Management Accounting Research 50 (2021) 100725
17
Fayard, D., Lee, L.S., Leitch, R.A., Kettinger, W.J., 2012. Effect of internal cost
management, information systems integration, and absorptive capacity on interorganizational cost management. Account. Organ. Soc. 37 (3), 168–187.
Firmin, P., Linn, J., 1968. Information systems and managerial accounting. Account. Rev.
43 (1), 75–82.
Fish, M., Miller, W., Becker, D., Pernsteiner, A., 2017. The role of organizational culture
in the adoption of customer profitability analysis a field study. Qual. Res. Account.
Manag. 14 (1), 38–59.
Glaum, M., Baetge, J., Grothe, A., Oberdorster, ¨ T., 2013. Introduction of international
accounting standards, disclosure quality and accuracy of analysts’ earnings forecasts.
Eur. Account. Rev. 22 (1), 79–116.
Gosselin, M., 1997. The effect of strategy and organizational structure on the adoption
and implementation of activity-based costing. Account. Organ. Soc. 22 (2), 105–122.
Govindarajan, V., 1984. Appropriateness of accounting data in performance evaluation:
an empirical examination of environmental uncertainty as an intervening variable.
Account. Organ. Soc. 9, 125–135.
Granlund, M., Mouritsen, J., 2003. Special section on management control and new
information technologies. Eur. Account. Rev. 12 (1), 77–83.
Guilding, C., Cravens, K.S., Tayles, M., 2000. An international comparison of strategic
management accounting practices. Manag. Account. Res. 11 (1), 113–135.
Gupta, G., Salter, S.B., 2018. The balanced scorecard beyond adoption. J. Int. Account.
Res. 17 (3), 115–134.
Hadid, W., 2019. Lean service, business strategy and ABC and their impact on firm
performance. Prod. Plan. Control. 30 (4), 1203–1217.
Hair, J.F., Ringle, C.M., Sarstedt, M., 2011. PLS-SEM: indeed a silver bullet. J. Mark.
Theory Pract. 19 (2), 139–151.
Hair, J.F., Sarstedt, M., Ringle, C.M., 2012. An assessment of the use of partial least
squares structural equation modeling in marketing research. J. Acad. Mark. Sci. 40
(3), 414–433.
Hall, M., 2010. Accounting information and managerial work. Account. Organ. Soc. 35
(3), 301–315.
Henri, J.F., Boiral, O., Roy, M.J., 2016. Strategic cost management and performance: the
case of environmental costs. Br. Account. Rev. 48 (2), 269–282.
Henseler, J., Chin, W.W., 2010. A comparison of approaches for the analysis of
interaction effects between latent variables using partial least squares path
modeling. Struct. Equ. Model. 17 (1), 82–109.
House, R.J., Hanges, P.J., Javidan, M., Dorfman, P.W., Gupta, V., 2004. Culture,
Leadership, and Organizations: The GLOBE Study of 62 Societies. Sage Publications,
Thousand Oaks, CA.
Hyvonen, ¨ T., 2003. Management accounting and information systems: ERP versus BoB.
Eur. Account. Rev. 12 (1), 155–173.
Khandwalla, P., 1972. The effect of different types of competition on the use of
accounting controls. J. Account. Res. 10 (Autumn), 275–285.
Khandwalla, P., 1977. Design of Organisations. Harcourt Brace Jovanovich, New York.
Krumwiede, K.R., 1998. The implementation stages of activity-based costing and the
impact of contextual and organizational factors. J. Manag. Account. Res. 10,
239–277.
Lachmann, M., Knauer, T., Trapp, R., 2013. Strategic management accounting practices
in hospitals: empirical evidence on their dissemination under competitive market
environments. J. Account. Organ. Chang. 9 (3), 336–369.
Langfield-Smith, K., 2008. Strategic management accounting: how far have we come in
25 years? Account. Audit. Account. J. 21 (2), 204–228.
Lapsley, I., Rekers, J.V., 2017. The relevance of strategic management accounting to
popular culture: the world of West End musicals. Manag. Account. Res. 35 (June),
47–55.
Lee, L., Petter, S., Fayard, D., Robinson, S., 2011. On the use of partial least squares path
modeling in accounting research. Int. J. Account. Inf. Syst. 12 (4), 305–328.
Libby, T., Waterhouse, J.H., 1996. Predicting change in management accounting
systems. J. Manag. Account. Res. 8, 137–150.
Little, T.D., Bovaird, J.A., Widaman, K.F., 2006. On the merits of orthogonalizing
powered and product terms: implications for modeling interactions among latent
variables. Struct. Equ. Model. 13 (4), 497–519.
Lord, B.R., 1996. Strategic management accounting: The emperor’s new clothes? Manag.
Account. Res. 7 (3), 347–366.
Luft, J., 2009. Nonfinancial information and accounting: a reconsideration of benefits
and challenges. Account. Horiz. 23 (3), 307–325.
Ma, Y., Tayles, M., 2009. On the emergence of strategic management accounting: an
institutional perspective. Account. Bus. Res. 39 (5), 437–495.
Maiga, A.S., 2012. The effects of information technology integration on manufacturing
financial performance: the role of cost control systems. Adv. Manag. Account. 21,
183–206.
Maiga, A.S., Nilsson, A., Jacobs, F.A., 2014. Assessing the interaction effect of cost
control systems and information technology integration on manufacturing plant
financial performance. Br. Account. Rev. 46 (1), 77–90.
Malmi, T., 1997. Towards explaining activity-based costing failure: accounting and
control in a decentralized organization. Manag. Account. Res. 8 (4), 459–480.
Markus, M.L., Pfeffer, J., 1983. Power and the design and implementation of accounting
and control systems. Account. Organ. Soc. 8 (2–3), 205–218.
McLaren, J., Appleyard, T., Mitchell, F., 2016. The rise and fall of management
accounting systems: a case study investigation of EVA. Br. Account. Rev. 48 (3),
341–358.
Naranjo-Gil, D., Maas, V.S., Hartmann, F.G.H., 2009. How CFOs determine management
accounting innovation: an examination of direct and indirect effects. Eur. Account.
Rev. 18 (4), 667–695.
Newell, S., Swan, J., Robertson, M., 1998. A cross-national comparison of the adoption of
business process reengineering: fashion-setting networks? J. Strateg. Inf. Syst. 7 (4),
299–317.
O’Reilly, C.A., Chatman, J.A., 1996. Culture as social control: corporations, cults, and
commitment. Res. Organ. Behav. 18, 157–200.
O’Reilly, C.A., Chatman, J., Caldwell, D.F., 1991. People and organizational culture: a
profile comparison approach to assessing person-organization fit. Acad. Manag. J. 34
(3), 487–16.
Otely, D., 2016. The contingency theory of management accounting and control
1980–2014. Manag. Account. Res. 31 (June), 45–62.
Otley, D., 1980. The contingency theory of management accounting achievement and
prognosis. Account. Organ. Soc. 5 (4), 413–428.
Pavlatos, O., Kostakis, X., 2018. The impact of top management team characteristics and
historical financial performance on strategic management accounting. J. Account.
Organ. Chang. 14 (14), 455–472.
Peteghem, M.V., Bruynseels, L., Gaeremynck, A., 2018. And Beyond diversity: a tale of
faultlines and frictions in the board of directors. Account. Rev. 93 (2), 339–367.
Pierce, B., O’Dea, T., 2003. Management accounting information and the needs of
managers: perceptions of managers and accountants compared. Br. Account. Rev. 35
(3), 257–290.
Rigby, D., Bilodeau, B., 2015. Management Tools & Trends 2015. Available at: https
://www.bain.com/insights/management-tools-and-trends-2015/.
Roslender, R., Hart, S.J., 2002. Integrating management accounting and marketing in the
pursuit of competitive advantage: the case for strategic management accounting.
Crit. Perspect. Account. 13 (2), 255–277.
Roslender, R., Hart, S.J., 2003. In search of strategic management accounting: theoretical
and field study perspectives. Manag. Account. Res. 14 (3), 255–279.
Schaltegger, S., Zvezdov, D., 2015. Gatekeepers of sustainability information: exploring
the roles of accountants. J. Account. Organ. Chang. 11 (3), 333–361.
Schoute, M., 2011. The relationship between product diversity, usage of advanced
manufacturing technologies and activity-based costing adoption. Br. Account. Rev.
43 (2), 120–134.
Sedevich-Fons, L., 2018. Linking strategic management accounting and quality
management systems. Bus. Process. Manag. J. 24 (6), 1302–1320.
Shank, J.K., 1989. Strategic cost management: New wine, or just new bottles? J. Manag.
Account. Res. 1 (Fall), 47–64.
Simmonds, K., 1981. Strategic management accounting. Manag. Account. 59 (4), 26–30.
Swan, J.A., Newell, S., 1995. The role of professional associations in technology
diffusion. Organ. Stud. 16 (5), 847–874.
Taipaleenm¨ aki, J., 2014. Absence and variant modes of presence of management
accounting in new product development–theoretical refinement and some empirical
evidence. Eur. Account. Rev. 23 (4), 291–334.
Tillmann, K., Goddard, A., 2008. Strategic management accounting and sense-making in
a multinational company. Manag. Account. Res. 19 (1), 80–102.
Turner, M.J., Way, S.A., Hodari, D., Witteman, W., 2017. Hotel property performance:
the role of strategic management accounting. Int. J. Hosp. Manag. 63 (May), 33–43.
Tushman, M.L., Scanlan, T.J., 1981. Boundary-spanning individuals: their role in
information transfer and their antecedents. Acad. Manag. J. 24 (2), 289–305.
Uecker, W.C., 1978. A behavioral study of information system choice. J. Account. Res. 16
(1), 169–189.
Ugrin, J.C., 2009. The effect of system characteristics, stage of adoption, and experience
on institutional explanations for ERP systems choice. Account. Horiz. 23 (4),
365–389.
Van der Veeken, H.J.M., Wouters, M.J.F., 2002. Using accounting information systems
by operations managers in a project company. Manag. Account. Res. 13 (3),
345–370.
Williams, J.J., Seaman, A.E., 2001. Predicting change in management accounting
systems: national culture and industry effects. Account. Organ. Soc. 26 (4), 443–460.
Woods, M., Taylor, L., Ge Fang, G.C., 2012. Electronics: a case study of economic value
added in target costing. Manag. Account. Res. 23 (4), 261–277.
Yazdifar, H., Askarany, D., Wickramasinghe, D., Nasseri, A., Alam, A., 2019. The
diffusion of management accounting innovations in dependent (subsidiary)
organizations and MNCs. Int. J. Account. 54 (1), 1–42.
Yigitbasioglu, O., 2016. Firms’ information system characteristics and management
accounting adaptability. Int. J. Account. Inf. Manag. 24 (1), 20–37.
Zhang, Y.Z., Hoque, Z., Isa, C.R., 2015. The effects of organizational culture and structure
on the success of activity-based costing implementation. Adv. Manag. Account. 25,
229–257.
W. Hadid and M. Al-Sayed