A PROPOSED MODEL OF THE MEDIATING EFFECT OF STRATEGIC MANAGEMENT ACCOUNTING ON THE RELATIONSHIP BETWEEN PERCEIVED ENVIRONMENTAL UNCERTAINTY AND FIRM PERFORMANCE
DOI:
https://doi.org/10.29121/granthaalayah.v4.i1.2016.2869Keywords:
Perceived Environmental Uncertainty, Strategic Management Accounting, Firm PerformanceAbstract [English]
This paper investigates the relationship between contingency factors, strategic management accounting and firm performance. Due to the development and expansion of organizations and their connections to the industrial competition, it is usable that the organization rely more on non-financial information than financial. The management accounting and financial accounting literature have highlighted the important role of perceived environmental uncertainty and strategic management accounting on firm performance. However, unpredictable conditions from external can cause big problems for the company’s decision making process because both of them have effect on firm performance. The aim of this paper is to propose a model of the relationship amid perceived environmental uncertainty on the firm performance by mediating effect of strategic management accounting through review of the related literature. One of the most significant findings to emerge from this review is the identification the contingency factors that improve organizational performance under environmental uncertainty.
Downloads
References
Abernethy, M.A. and Bouwens, J. (2005), “Determinants of accounting innovation implementation”, Abacus, Vol. 41, pp. 217-239. DOI: https://doi.org/10.1111/j.1467-6281.2005.00180.x
Azadehdel, M., Farahbod, F. and Rahimi, M. (2012). The Modifying Role of Knowledge Management in Relationship among Environment and Organizational Structure Journal of Basic and Applied Scientific Research, 2(3)2758-2764. DOI: https://doi.org/10.12816/0017457
Burns, T., and G. Stalker, 1961, The Management of Innovation (Travistock: London, UK).
Cagwin. D and Bouwman. M. J. (2002). “The association between activity-based costing and improvement in financial performance,” Management and Accounting Research, Vol. 13, pp. 1-39.
Cadez, S. &Guilding, C. (2008). “An exploratory investigation of an integrated contingency model of strategic management accounting.” Accounting, Organizations and Society. 33(7-8), 836-863. DOI: https://doi.org/10.1016/j.aos.2008.01.003
Chapman, C. (1997). Reflections on a Contingent View of Accounting. Accounting, Organizations and Society, 22 (2), pp. 189-205. DOI: https://doi.org/10.1016/S0361-3682(97)00001-9
Chenhall, R.H. and Langfield-Smith, K. (1998), “The relationship between strategic priorities, management techniques and management accounting: an empirical investigation using a systems approach”, Accounting, Organizations and Society, Vol. 23, pp. 243-264. DOI: https://doi.org/10.1016/S0361-3682(97)00024-X
Chenhall, R. H. (2003). "Management Control Systems Design Within its Organizational Context: Findings from Contingency-based Research and Directions for the Future." Accounting, Organizations and Society 28(2/3), 127-168. DOI: https://doi.org/10.1016/S0361-3682(01)00027-7
Child, J. (1972). "Organizational structure, environment and performance: the role of strategic choice." Sociology 6: 1-22.
Daft, R. L. (2004). Organisational theory and design. 8th edition. Thompson South Western.
Dess, G. G. and D. W. Beard (1984). "Dimensions of Organizational Task Environments” Administrative Science Quarterly , Vol. 29, No. 1be consistent in format of referencing (Mar., 1984), pp. 52-73 DOI: https://doi.org/10.2307/2393080
Duncan, R. (1972). "Characteristics of organizational environments and perceived environmental uncertainty." Administrative Science Quarterly 17(3): 313-327. DOI: https://doi.org/10.2307/2392145
Elbanna, S. and M. Alhwarai (2012). "The Influence of Environmental Uncertainty and Hostility on Organization Performance” UAEU-FBE-Working Paper Series ISSN 2079-7141.
Ferris, K.R. 1977, 'Perceived uncertainty and job satisfaction in the accounting environment', Accounting, Organizations and Society, Vol. 2, No. 1, pp. 23-28.
Fisher, J., 1992, “Use of Nonfinancial Performance Measures”, Journal of Cost Management 6(1), 31-38.
Frucot, V., and W. T. Shearon. 1991. Budgetary participation, locus of control, and Mexican managerial performance and job satisfaction. The Accounting Review 66 (January): 80-98.
Gelinas, J. J., Sutton, S. G. &Oram, A. E. (1999). Accounting Information Systems. (4th Ed.). Cincinati, Ohio: South-Western College Publishing, pp. 1-17.
Gerdin, J., and J. Greve, 2004, “Forms of Contingency Fit in Management Accounting Research -- A Critical Review”, Accounting, Organizations and Society 29(3/4), 303-326. DOI: https://doi.org/10.1016/S0361-3682(02)00096-X
Gordon, L., & Miller, D. (1976). A contingency framework for the design of accounting information systems. Accounting Organization & Society, 1(1), 59–69. DOI: https://doi.org/10.1016/0361-3682(76)90007-6
Gordon, L.A., and V.K. Narayanan, 1984, “Management Accounting Systems, Perceived Environmental Uncertainty and Organizational Structure: An Empirical Investigation”, Accounting, Organizations and Society 9(1), 33-47. DOI: https://doi.org/10.1016/0361-3682(84)90028-X
Gul, F.A., and Y.M. Chia, 1994, “The Effects of Management Accounting Systems, Perceived Environmental Uncertainty and Decentralization on Management Performance: A Test of Three Way Interaction”, Accounting, Organizations and Society 19(4/5), 413-426. DOI: https://doi.org/10.1016/0361-3682(94)90005-1
Gosselin, D. P. and G. A. Bauwen (2006). "Strategic account management: customer value creation through customer alignment." Journal of Business & Industrial Marketing 21/6 (2006) 376–385.
Hansen, S.C., Otley, D.T. and van der Stede, W.A. (2003), "Practice Developments in Budgeting: An Overview and Research Perspective", Journal of Management Accounting Research, Vol. 15, pp. 95–116. DOI: https://doi.org/10.2308/jmar.2003.15.1.95
Hoque, Z. (2005). Linking environmental uncertainty to non-financial performance measures and performance: a research note. The British Accounting Review ,37, 471–481. DOI: https://doi.org/10.1016/j.bar.2005.08.003
Hoque, Z., Mia, L. and Alam, M. (2001). Market Competition, Computer-Aided Manufacturing And Use Of Multiple Performance Measures: An Emprical Study. British Accounting Review 33, 23–45. DOI: https://doi.org/10.1006/bare.2000.0149
Isabella, L. A., & Waddock, S. A. 1994. Top management team certainty: Environmental assesments, teamwork, and performance implications. Journal of Management, 20(4): 835-858. DOI: https://doi.org/10.1177/014920639402000407
Ismail, N.A. and King, M. (2005). Firm Performance and AIS Alignment in Malaysian SMEs, International Journal of Accounting Information Systems, 6(4), p. 241-259.
Ittner, C. D. and D. F. Larcker (1997). "Quality strategy, strategic control systems, and organizational performance." Accounting, Organizations and Society, 22(3-4), 293-314. DOI: https://doi.org/10.1016/S0361-3682(96)00035-9
Ittner, C. D. and D. F. Larcker (2002). "The association between activity-based costing and manufacturing performance," Journal of Accounting Research, Vol. 40 (3), June, pp. 711-726.
Jurczak, J. (2008). IC measurement methods. Economics and Organization of Future Enterprise, Vol. 1, issue 1, p. 37–45. DOI: https://doi.org/10.2478/v10061-008-0005-y
Jusoh, R. (2008). Environmental Uncertainty, Performance, and the Mediating Role of Balanced Scorecard Measures Use: Evidence from Malaysia. International Review of Business Research Papers, 4(2) 116-135
Kaplan, R. S. and D. P. Norton (2001). "Transforming the balanced scorecard from performance measurement to strategic management: part 1." Accounting Horizon 15 (1), 87- DOI: https://doi.org/10.2308/acch.2001.15.1.87
Kennedy, Tom and John Affleck-Graves (2001). “The impact of activity-based costing techniques on firm performance,” Journal of Management Accounting Research, Vol. 13, pp.19-45.
Khandwalla. P.N., 1972, “The Effect of Different Types of Competition on the Use of Management Controls”, Journal of Accounting Research (Autumn), 275-285. DOI: https://doi.org/10.2307/2490009
Kochhar, R. (1997). "Strategic Assets, Capital structure, and Firm Performance." Journal of Financial and Strategic Decisions Volume 10 Number 3 fall 1997.
Kotha, Suresh and Nair, Anil (1995). Strategy and environment as determinant of performance: Evidence from the Japanese machine tool industry, Strategic Management Journal, 16(7): 497-518. DOI: https://doi.org/10.1002/smj.4250160702
Langfield-Smith, K., 2007, A Review of Quantitative Research in Management Control Systems and Strategy, in: C. S. Chapman, A. G. Hopwood, and M. D. Shields, eds., Handbook of Management Accounting Research, Vol. 1 (Elsevier: Oxford, UK), 753-784). DOI: https://doi.org/10.1016/S1751-3243(06)02012-8
Lawrence, P. &Lorsch, J. (1967) Organization and Environment: Managing Differentiation and Integration. Harvard University.
Leifer, R., G.C. O’Connor, and M. Rice, 2001, “Implementing Radical Innovation in Mature Firms: The Role of Hubs”, Academy of Management Executive 15(3), 102-113.
Link, S. and Naveh, E. (2006). "Standardization and discretion: does the environmental standard ISO 14001 lead to performance benefits?" IEEE Transactions on Engineering Management 53, 508-519. DOI: https://doi.org/10.1109/TEM.2006.883704
Magnusson, D., (1981). Toward a Psychology of Situations: an Interactionism Perspective. Lawrence Erlbaum Associates, New Jersey.
Maiga, A.S. and Jacobs, F.A. (2006). Balanced Scorecard, Activity-Based Costing And Company Performance: An Empirical Analysis, Journal of Managerial Issues, 15 (3), p. 283.
Marginson, D. and Ogden, S., (2005). Coping with ambiguity through the budget: the positive effects of budgetary targets on managers’ budgeting behaviours. Accounting, Organizations and Society, Volume 30, Issue 5, p. 435-456. Available online at www.sciencedirect.com. Accessed on May 14, 2013 DOI: https://doi.org/10.1016/j.aos.2004.05.004
McManus, P. (2012) Measuring urban sustainability: The potential and pitfalls of city rankings. Australian Geographer, 43(4), pp. 411-424. DOI: https://doi.org/10.1080/00049182.2012.731301
Merchant, K .A. (1981), “The Design of the Corporate Budgeting System: Influences on Managerial Behavior and Performance”, the Accounting Review, Vol. 56, No. 4, pp. 813-829.
Mia, L. and B. Clarke (1999). "Market competition, management accounting systems and business unit performance." Management Accounting Research, vol 10, pp. 137- 158. DOI: https://doi.org/10.1006/mare.1998.0097
Miller, K. D. (1993). Industry and country effects on managers' perceptions of environmental uncertainties. Journal of International Business Studies, 24(4): 693-714.
Otley, D. and Wilkinson, C. 1988, 'Organizational behavior: Strategy, structure, environment,
and technology', in Behavioral Accounting Research: A Critical Analysis, ed. K.R. Ferris, Century VII, Columbus, Ohio, pp. 147-170.
Perren, L. and Grant, P. (2000), “The Evolution of Management Accounting Routines in Small Businesses: A Social Construction Perspective”, Management Accounting Research, 11(4): pp.391-411. DOI: https://doi.org/10.1006/mare.2000.0141
Puranam, P., H. Singh, and M. Zollo, 2006, “Organizing for Innovation: Managing the Coordination-autonomy Dilemma in Technology Acquisitions”, Academy of Management Journal 49(2), 263-280. DOI: https://doi.org/10.5465/amj.2006.20786062
Reed, R. and R. J. DeFillippi (1990). "Causal ambiguity, barriers to imitation, and sustainable competitive advantage." Academy of Management Review, 15(1), 88-102. DOI: https://doi.org/10.5465/amr.1990.4308277
Regan, P. (2012). Making Sense of Uncertainty: An Examination of Environmental Interpretation. International Journal of Business and Management, 7(6),18-29. DOI: https://doi.org/10.5539/ijbm.v7n6p18
Rumelt, R. (1991). "How much does industry matter?" Strategic Management Journal, Vol.12 (3) March, pp167-186.
Şener, R., and Dirlik, S. (2012). Stratejikyönetimkapsamındastratejikyönetimmuhasebesiaraçlarınınkullanımdüzeyiüzerineampirikbiraraştırma (An empirical research on the usage level of strategic administration accounting tools in the scope of strategic management). Proceedings from 31st Turkey Accounting Training Symposium, April 25-29, 2012, Muğla.
Schoute, M. (2009). The realtionship between cost system complexity, purposes of use, and cost system effectiveness, The British Accounting Review, 41, 208-226. DOI: https://doi.org/10.1016/j.bar.2009.10.001
Schulza, D., Wub, A and Chowc, Ch.W.(2010). "Environmental Uncertainty, Comprehensive, Performance Measurement Systems, Performance-Based Compensation, and Organizational Performance." Asia-Pacific Journal of Accounting & Economics 17 (2010) 17–40. DOI: https://doi.org/10.1080/16081625.2010.9720850
Tymon Jr. W.G., D. E. Stout, and K.N. Shaw, 1998, “Critical Analysis and Recommendations Regarding the Role of Perceived Environmental Uncertainty in Behavioral Accounting Research”, Behavioral Research in Accounting 10, 23-46.
Van der Stede, W. A., Chow, C. W. and Lin, T. W. (2006). Strategy, Choice of Performance Measures, and Performance. Behavioral Research in Accounting . 18, 185-205. DOI: https://doi.org/10.2308/bria.2006.18.1.185
Wagner, M. (2005). "How to reconcile environmental and economic performance to improve corporate sustainability: corporate environmental strategies in the European paper industry." Journal of Environmental Management 76, issue no? 105-118. DOI: https://doi.org/10.1016/j.jenvman.2004.11.021
Wagner, M., Van Phu, N., Azomahou, T. and Wehrmeyer, W. (2002). The relationship between the environmental and economic performance of firms: an empirical analysis of the European paper industry. . Corporate Social Responsibility and Environmental Management 9 (3), 133-146. DOI: https://doi.org/10.1002/csr.22
Kevin Watson, BeateKlingenberg, Tony Polito, Tom G. Geurts, (2004) "Impact of environmental management system implementation on financial performance: A comparison of two corporate strategies", Management of Environmental Quality: An International Journal, Vol. 15 Iss: 6, pp.622 – 628. DOI: https://doi.org/10.1108/14777830410560700
Downloads
Published
How to Cite
Issue
Section
License
With the licence CC-BY, authors retain the copyright, allowing anyone to download, reuse, re-print, modify, distribute, and/or copy their contribution. The work must be properly attributed to its author.
It is not necessary to ask for further permission from the author or journal board.
This journal provides immediate open access to its content on the principle that making research freely available to the public supports a greater global exchange of knowledge.
