Integrating business strategy,organizational configurations and management accounting systems with business unit effectiveness: a fitness landscape approach

This study adopts a fitness landscape approach to test contingency hypotheses about the relationship between business strategy, organizational configurations, management accounting systems, and business unit effectiveness. Central to this approach is the notion of contingent fit between strategic priorities and its contextual variables. Building on Kauffman’s N-locus, two-state additive fitness model, this study predicts that the degree of contingent fit, defined as the weighted sum of independent fitness contributions of each contextual variables, will have a positive association with business unit effectiveness.Based on a mail survey and personal interviews of 106 business unit managers of publicly held companies listed under consumer goods industry, this study indicates that the degree of contingent fit has a positive association with business unit effectiveness. Further analysis reveals that strategic priorities affect the types of controls and management accounting systems used by the business units.     

The relations among competition, delegation, management accounting systems change and performance: A path model

This paper is concerned with an empirical investigation into the relations among competition, delegation, management accounting and control systems (MACS) change and organizational performance. It follows a standard contingency type path modeling to propose that intensity of competition causes firms to change their MACS and that this change enhances their performance. Delegation of authority is implicated in the model as competition encourages delegation, and this in turn causes the change in MACS, as well as enhancing performance directly. The results from a sample of Australian strategic business units indicate that (1) increased competition results in improved organizational performance indirectly through a greater number of changes in MACS, and (2) increased delegation of authority to lower level management leads to higher organizational performance. These results contribute to the management accounting change literature by providing empirical evidence that the relationship between competition and organizational performance is mediated by a decentralized organizational form and changes in MACS of the firm.     

Market competition,earnings management,and persistence in accounting profitability around the world

We examine how cross-country differences in product, capital, and labor market competition, as well as earnings management affect mean reversion in accounting return on assets. Using a sample of 48,465 unique firms from 49 countries, we find that accounting returns mean revert faster in countries where there is more product and capital market competition, as predicted by economic theory. Country differences in labor market competition and earnings management are also related to mean reversion in accounting returns—but the relation varies with firm performance. Country labor competition increases mean reversion when unexpected returns are positive but slows it when unexpected returns are negative. Accounting returns in countries with higher earnings management mean revert more slowly for profitable firms and more rapidly for loss firms. Thus earnings management incentives to slow or speed up mean reversion in accounting returns are accentuated in countries where there is a high propensity for earnings management. Overall, these findings suggest that country factors explain mean reversion in accounting returns and are therefore relevant for firm valuation.     

Linking control systems to business unit strategy: impact on performance

Rooted in continguency theory, this paper examines linkages between strategy, incentive bonus system and effectiveness at the strategic business unit (SBU) level within diversified firms. Data from 58 SBUs reveal (1) that greater reliance on long-run criteria as well as subjective (non-formula) approaches for determining the SBU general managers' bonus contributes to effectiveness in the case of “build” SBUs but hampers it in the case of “harvest” SBUs, and (2) that the relationship between extent of reliance on short-run criteria and effectiveness is virtually independent of SBU strategy.     

The relationship between business strategy, management control systems and performance: Evidence from China

Over the past two decades, China has emerged as a global economic power, ranking behind only the USA, Japan and Germany. China's continuous global economic power has therefore prompted a surge in interest in understanding Chinese business practices. This paper reports on the results of a survey on the contingent relationship between business strategy, management control systems (MCS) and performance in Chinese Enterprises. The analysis is based on data gathered from 215 enterprises operating within the Xinjiang autonomous region of China. For those firms that were classified as pursuing differentiation strategy, the use of more non-financial based MCS has a positive effect on performance and this finding is consistent with the literature. We also found that for those firms classified as pursuing a low cost strategy, the use of more financial based MCS had a positive effective on performance as suggested in the literature. Our research has implications for understanding management accounting practices in Chinese enterprises.     

Culture, management accounting and managerial performance: Focus Iran

Modern management and control systems may not be equally effective in every country. Budget participation is one of the effective tools in western nations. However, management control tools, in general, and budget participation, in particular, could be ineffective or even dysfunctional in other environments. Hofstede (1980) had suggested that cultural differences among countries are influencing factors. In this study, we investigate the impact of culture, budgetary participation, and management accounting systems on managerial performance in Iran. Three-way analyses of variance are used separately for each of the four cultural Hofstede dimensions. We find convincing evidence that the application of management tools and techniques developed in western countries for effective management performance is not as useful in the Iranian context.     

Management accounting systems, top management team heterogeneity and strategic change

Institutional and market changes force many organizations across economic sectors to reconsider their strategic position and engage in strategic change. Organizations differ in their ability to realize strategic change, however, which appears to depend on several factors in their strategic management process. In this paper we explore two such factors simultaneously, which are the composition of the top management team and the characteristics of the management accounting system. In particular, the paper investigates how top management team heterogeneity affects strategic change both directly, and indirectly, through the design and use of the management accounting system. Hypotheses are developed and tested through a survey study among 103 Spanish public hospitals. We find significant effects of top management team heterogeneity on the extent and direction of strategic change, and find that the use of the management accounting system partially mediates the relationship between top management team heterogeneity and strategic change. The paper contributes to the extant literature on the complex relationships between strategic change and MAS [Gerdin, J., & Greve, J. (2004). Forms of contingency fit in management accounting research – a critical review. Accounting, Organizations and Society, 29, 303–326], by analysing both extent and direction of strategic change, and by recognizing the importance of top management teams’ use of the management accounting system for strategic change.     

Deviation-amplifying feedback and unintended consequences of management accounting systems

The concept of deviation-amplifying feedback is introduced, and its potential for providing insights into unintended consequences of management accounting systems is discussed. Specific applications of deviation-amplifying feedback to various aspects of a budgetary control system are explored. Then more general implications of deviation-amplifying feedback for management accounting systems are elaborated.     

Management accounting systems, task uncertainty and managerial performance: A research note

This study examines the interactive effects of management accounting systems (MAS) design and task uncertainty on managerial performance. MAS design was defined in terms of the extent to which managers use broad scope MAS information. The responses of 42 managers, drawn from a cross-section of Australian manufacturing companies, to a questionnaire survey were analysed by using a multiple regression technique. The results showed that under a high task uncertainty situation, the extent of use of broad scope MAS information led to effective managerial decisions and hence to improved managerial performance. On the other hand, under low task uncertainty situations, the extent of use of broad scope MAS information led to information overload which was dysfunctional to managerial performance.     

Managerial competition,information costs,and corporate governance: The use of accounting performance measures in proxy contests

This paper reports evidence that dissident stockholders who wage a proxy contest for board seats typically site poor earnings rather than poor stock price performance as necessitating the proposed hostile management change. Consistent with this finding, sample firms' pre-contest accounting returns are systematically below-market, whereas their pre-contest stock returns are not. During an election campaign, incumbent managers apparently exercise their accounting discretion to paint a favorable picture of their own performance to voting stockholders. If elected, dissidents tend to take an immediate earnings ‘bath’ which they typically blame on the poor decisions of prior management.     

养老保险会计核算管理系统的设计与实现

人民银行养老保险统筹工作经过近10年的发展,各项制度日臻完善,逐步走上了规范化管理轨道。但是,人民银行在养老保险基金和管理费的会计核算管理方面仍然使用手工操作, 这不仅增加了业务人员的工作量, 而且导致了各级统筹机构会计核算水平的参差不齐,制约了养老保险会计核算工作的有效开展。因此,迫切需要一套适应养老保险工作发展的会计核算管理系统,进一步规范养老保险会计核算管理工作,提高养老保险工作电子化水平。2003年底,人民银行咸宁市中心支行成功开发了养老保险会计核算管理系统,并在人民银行武汉分行辖内推广应用,取得了良好效果…     

University Tees: Introducing fundamentals of management accounting in a small business

This case introduces sophomore-level managerial accounting students to pricing decisions. The case also offers an opportunity to discuss the concepts of business strategy, business risk, and cost drivers. Students draw on concepts such as relevant costing, breakeven analysis, and contribution format income statements to recommend price quotes for a small business.¹     

Discussion of earnings-based bonus plans and earnings management by business unit managers

Guidry, Leone, and Rock use business unit data from a multinational conglomerate to reexamine whether earnings-based bonus plans are associated with earnings management. By focusing on business unit compensation, the authors increase the power of the tests and control for earnings management incentives provided by stock-based compensation. Questions raised by the study include the generalizability of the findings beyond the sample firm, the economic significance of earnings management, the effect of earnings management on bonus awards, and how group-level incentives to manage earnings interact with incentives at the business unit level.     

Editorial. Problems, challenges and opportunities: the small business as a setting for management accounting research

This special issue is devoted to management accounting in the small firm. It comprises five studies which address various aspects of this topic, which have been undertaken from different perspectives and which involve different research methodologies. The editorial below reviews the potential for and significance of research in this area and assess the contribution made by the five studies.     

Irish accounting, business and financial history: a bibliographical essay

Historians have engaged with accounting and business archives primarily in the areas of social and economic history. While much economic and social history draws on macro-economic data, micro-level sources have cast new light on old historical problems such as the Great Famine (1845-51) and the development of trade in Ireland and between Ireland and abroad. This paper traces the contributions of historians of Ireland to our understanding of accounting, business and financial history and maps out potential areas of research for accounting and business historians in the light of earlier and current trends in historical research. Adopting a historians' perspective, the paper will also provide a historical background and suggest potential bibliographical and archival sources to present and future accounting and business historians with a view to enhancing and enriching our understanding of the context in which accounting and business is situated in Ireland.