How does management accounting affect entrepreneurial orientation in SMEs? A structural equation modelling

Journal title MANAGEMENT CONTROL
Author/s Chiara Oppi , Caterina Cavicchi, Emidia Vagnoni
Publishing Year 2020 Issue 2020/Suppl. 1
Language English Pages 16 P. 63-78 File size 257 KB
DOI 10.3280/MACO2020-001-S1005
DOI is like a bar code for intellectual property: to have more infomation click here

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

Management accounting practices (MAP) appear to be a prerequisite for entrepreneur-ial orientation (EO) to positively influence profitability. In addition, critical capacities are a precondition to develop and maintain MAP. Studies revealed that small and me-dium enterprises use informal MAP and they generally lack managerial competences (MC) to develop and implement effective control systems to respond to environmental challenges. However, those who develop MC are more likely to implement MAP. The aim of the paper is to analyze the relationship between the use of MAP and the devel-opment of EO, where EO is measured through the independent dimensions of innova-tiveness, proactiveness and risk-taking. Further, the paper argues that the use of MAP is positively affected by the possession of MC. The paper adopts structural equation modelling to test the hypotheses, focusing on a sample of 339 Italian community pharmacies (response rate 54.6%). Findings support a positive relationship between MC and MAP and between MAP and EO, contributing to a field that is underexplored and providing suggestions for managers, practitioners and educators.

Keywords: Management accounting practices, managerial competences, entrepreneur-ial orientation, SMEs, structural equation modelling, community pharmacies.

  1. Ahmad K., Zabri S.M. (2015), Factors explaining the use of management accounting practices in Malaysian medium-sized firms, Journal of Small Business and Enterprise Development, 22, 4, pp. 762-781, DOI: 10.1108/JSBED-04-2012-0057
  2. Andersén J., Samuelsson J. (2016), Resource organization and firm performance: How entrepreneurial orientation and management accounting influence the profitability of growing and non-growing SMEs, International Journal of Entrepreneurial Behavior & Research, 22, 4, pp. 466-484. DOI: 10.1108/IJEBR-11-2015-0250
  3. Anderson J.C., Gerbing D.W. (1988), Structural equation modelling in practice: A review and recommended two-step approach, Psychological Bulletin, 103, 3, pp. 411-423.
  4. Aureli S., Del Baldo M. (2016), Performance Appraisal of Business Networks. How Small and Medium Enterprises Define and Monitor Network Objectives, Management Control, 1, pp. 35-58. DOI: 10.3280/MACO2016-001003
  5. Barbero J.L., Casillas J.C., Feldman H.D. (2011), Managerial capabilities and paths to growth as determinants of high-growth small and medium-sized enterprises, International Small Business Journal, 29, 6, pp. 671-694.
  6. Barringer B.R, Bluedorn A.C. (1999), The relationship between corporate entrepreneurship and strategic management, Strategic Management Journal, 20, 5, pp. 421-444.
  7. Bentler P.M. (1992), On the fit of models to covariances and methodology to the Bulletin. Psychological Bulletin, 112, 3, pp. 400-404. DOI: 10.1037/0033-2909.112.3.400
  8. Birch D.L. (1981), Who creates jobs?, The Public Interest, 65, pp. 3-14.
  9. Bolton D.L., Lane M.D. (2012), Individual entrepreneurial orientation: Development of a measurement instrument. Education+ Training, 54, 2/3, pp. 219-233. DOI: 10.1108/00400911211210314
  10. Byrne B.M. (2010), Structural equation modelling with AMOS: Basic concepts, applications, and programming (2nd ed.), New York, NY, Taylor and Francis. DOI: 10.4324/9780203807644
  11. Cardoni A. (2018), Le sfide evolutive del Management Control tra relazioni strategiche, innovazione e discontinuità: a knowledge transfer matter?, Management Control, 1, pp. 5-15. DOI: 10.3280/MACO2018-001001
  12. Cheetham G., Chivers G. (1996), Towards a holistic model of professional competence. Journal of European Industrial Training. 20, 5, pp. 20-30. DOI: 10.1108/03090599610119692
  13. Chiucchi M.S., Gatti M., Marasca S. (2012), The relationship between management accounting systems and ERP systems in a medium-sized firm: a bidirectional perspective, Management Control, 3, pp. 39-65. DOI: 10.3280/MACO2013-SU300
  14. Covin J.G., Slevin D.P. (1989), Strategic management of small firms in hostile and benign environment, Strategic Management Journal, 10, 1, pp. 75-87.
  15. Covin J.G., Wales W.J. (2012), The measurement of entrepreneurial orientation, Entrepreneurship Theory and Practice, 36, 4, pp. 677-702.
  16. Cronbach L.J. (1951), Coefficient alpha and the internal structure of tests, Psychometrika, 16, 3, pp. 297-334. DOI: 10.1007/BF02310555
  17. Del Baldo M. (2008), I nuovi sistemi informativi: opportunità e criticità per il controllo di gestione nelle piccole e medie imprese, in Cesaroni F., Demartini P. (Eds.), ICT e in- formazione economico-finanziaria. Saggi sull’applicazione delle nuove tecnologie nelle grandi e nelle piccole e medie imprese (pp. 101-131), Milano, FrancoAngeli.
  18. Del Baldo M., Arcari A.M., Ruisi M. (2019), Controllo di gestione nelle PMI e consulenti esterni, Management Control, 1, pp. 69-94. DOI: 10.3280/MACO2019-SU1005
  19. Doucette W.R., Nevins J.C., Gaither C., Kreling D.H., Mott D.A., Pedersen C.A., Schommer J.C. (2012), Organizational factors influencing pharmacy practice change. Research in Social and Administrative Pharmacy, 8, 4, pp. 274-284.
  20. Etikan I., Musa S.A., Alkassim R.S. (2016), Comparison of convenience sampling and purposive sampling, American Journal of Theoretical and Applied Statistics, 5, 1, pp. 1-4.
  21. Federfarma (2019), La farmacia in Italia 2018/2019.
  22. Fornell C., Larcker D.F. (1981), Evaluating structural equation models with unobservable variables and measurement error, Journal of Marketing Research, 18, 1, pp. 39-50.
  24. Garengo P., Bernardi G. (2007), Organizational capability in SMEs: Performance measurement as a key system in supporting company development, International Journal of Productivity and Performance Management, 56, 5/6, pp. 518-532. DOI: 10.1108/17410400710757178
  25. Garengo P., Biazzo S., Bititci, U.S. (2005), Performance measurement systems in SMEs: A review for a research agenda, International Journal of Management Reviews, 7, 1, pp. 25-47.
  26. Gebauer H. (2008), Robust management policies for positioning pharmacies as healthcare service providers, European Management Journal, 26, 3, pp. 175-187.
  27. Goktan A.B., and V.K. Gupta (2013), Sex, gender, and individual entrepreneurial orientation: evidence from four countries, International Entrepreneurship and Management Journal, 11, 1, pp. 95-112.
  28. Gregório J., Russo G., Lapão L.V. (2016), Pharmaceutical services cost analysis using time-driven activity-based costing: A contribution to improve community pharmacies’ management, Research in Social and Administrative Pharmacy, 12, 3, 475-485.
  29. Grundström C., Sjöström R., Uddenberg A., Rönnbäck, A. Ö. (2012), Fast-growing SMEs and the role of innovation, International Journal of Innovation Management, 16, 3, pp. 1240003. DOI: 10.1142/S1363919612400038
  30. Hair J.F., Black B., Babin B., Anderson R.E., Tatham R.L. (2010), Multivariate data analysis: A global perspective (7th ed.), Upper Saddle River, NJ, Pearson Education.
  31. Halabi A.K., Barrett R., Dyt R. (2010), Understanding financial information used to assess small firm performance: An Australian qualitative study, Qualitative Research in Accounting & Management, 7, 2, pp. 163-179. DOI: 10.1108/11766091011050840
  32. Henri J.F. (2006), Management control systems and strategy: A resource-based perspective, Accounting, Organizations and Society, 31, 6, pp. 529-558.
  33. Hindle K., Cutting N. (2002), Can applied entrepreneurship education enhance job satisfaction and financial performance? An empirical investigation in the Australian pharmacy profession. Journal of Small Business Management, 40, 2, pp. 162-167. DOI: 10.1111/1540-627X.00048
  34. Hu L.T., Bentler P.M. (1999), Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives, Structural Equation Modeling: A Multidisciplinary Journal, 6, 1, pp. 1-55. DOI: 10.1080/10705519909540118
  35. Hughes M., Morgan R.E. (2007), Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth, Industrial Marketing Management, 36, 5, pp. 651-661.
  36. Italian National Federation of Pharmacies (Federfarma) (2017), La farmacia italiana 2017, -- available at: https://www.federfarma.it/Documenti/farmacia_italiana2017.aspx (accessed: July, 2019).
  37. Ismail N.A., King M. (2014), Factors influencing the alignment of accounting information systems in small and medium sized Malaysian manufacturing firms. Journal of Information Systems and Small Business, 1, 1-2, pp. 1-20.
  38. Iyer S., Doucette W.R. (2003), The influence of environmental attributes on the relationship between entrepreneurial orientation and performance in independent community pharmacies, Journal of Pharmaceutical Marketing & Management, 15, 2, pp. 25-46.
  39. Jambulingam T., Doucette W.R. (1999), Pharmacy entrepreneurial orientation: antecedents and its effect on the provision of innovative pharmacy services, Journal of Social and Administrative Pharmacy, 16, 1, pp. 26-37.
  40. King R., Clarkson P.M., Wallace S. (2010), Budgeting practices and performance in small healthcare businesses, Management Accounting Research, 21, 1, pp. 40-55.
  41. Koop S., De Reu T., Frese M. (2000), Entrepreneurial orientation and personal initiative, in Frese M. (ed.), Success and failure of microbusiness owners in Africa: A psychological approach, London, Quorum Books.
  42. Lavia López O., Hiebl M.R.W. (2015), Management accounting in small and medium-sized enterprises: Current knowledge and avenues for further research, Journal of Management Accounting Research, 27, 1, pp. 81-119.
  43. Le Deist F.D., Winterton J. (2005), What is competence?. Human Resource Development International, 8, 1, pp. 27-46. DOI: 10.1080/1367886042000338227
  44. Lim S., Envick B.R. (2013), Gender and entrepreneurial orientation: a multi-country study, International Entrepreneurship and Management Journal, 9, 3, pp. 465-482.
  45. Lumpkin G.T., Dess G.G. (1996), Clarifying the entrepreneurial orientation construct and linking it to performance, Academy of Management Review, 21, 1, pp. 135-172. DOI: 10.2307/258632
  46. Mancini D. (2018), Evoluzione e prospettive dei sistemi di informazione e di controllo, Management Control, Suppl. 2, pp. 5-14. DOI: 10.3280/MACO2018-SU2001
  47. Marchi L. (2011), L’evoluzione del controllo di gestione nella prospettiva informativa e gestionale esterna, Management Control, 3, pp. 5-16. DOI: 10.3280/MACO2011-003001
  48. Marchini I. (2002), L’approccio tipologico allo studio della piccola impresa, Rivista Italiana di Ragioneria ed Economia Aziendale, 102, 1/2, pp. 252-272.
  49. Martin G., Staines H. (1994), Managerial competences in small firms, Journal of Management Development, 13, 7, pp. 23-34. DOI: 10.1108/02621719410063396
  50. Miller D. (1983), The correlates of entrepreneurship in three types of firms, Management Science, 29, 7, pp. 770-791.
  51. Ng H.S., Kee D.M.H. (2018), The core competence of successful owner-managed SMEs, Management Decision, 56, 1, pp. 252-272, DOI: 10.1108/MD-12-2016-0877
  52. Ottewill R., Jennings P.L., Magirr P. (2000), Management competence development for professional service SMEs: the case of community pharmacy, Education+ Training, 42, 4/5, pp. 246-255. DOI: 10.1108/00400910010373697
  53. Palazzi F., Ciambotti M., Gelsomini, L. (2019), L’adozione dell’Activity-Based Costing nelle PMI: analisi di un caso, Management Control, 1, pp. 97-122. DOI: 10.3280/MACO2019-001005
  54. Philpott L. (2014), Supermarket pharmacies: Sleeping giants... or are they foxing?, AJP: The Australian Journal of Pharmacy, 95, 1125, pp. 22-24.
  55. Ranghchian M., Sehat S., Akhgari M., Mehralian G. (2018), Performance model of community pharmacies in low-middle income countries: A societal perspective, Journal of Retailing and Consumer Services, 40, pp. 241-248.
  56. Rauch A., Wiklund J., Lumpkin G.T., Frese M. (2009), Entrepreneurial orientation and business performance: An assessment of past research and suggestions for the future, Entrepreneurship Theory and Practice, 33, 3, pp. 761-787.
  57. Scherer R.F., Adams J.S., Carley S.S., Wiebe F.A. (1989), Role model performance effects on development of entrepreneurial career preference, Entrepreneurship Theory and Practice, 13, 3, pp. 53-72. DOI: 10.1177/104225878901300306
  58. Schmidt R.A., Pioch E.A. (2004), Community pharmacies under pressure: issues of deregulation and competition, International Journal of Retail & Distribution Management, 32, 7, pp. 354-357. DOI: 10.1108/09590550410541471
  59. Schreiber J.B., Nora A., Stage F.K., Barlow E.A., King J. (2006), Reporting structural equation modelling and confirmatory factor analysis results: A review, The Journal of Educational Research, 99, 6, pp. 323-338. DOI: 10.3200/JOER.99.6.323-338
  60. Sharma M.K., Bhagwat R. (2007), Performance measurement system: Case studies from SMEs in India, International Journal of Productivity and Quality Management, 2, 4, pp. 475-509.
  61. DOI: 10.1504/IJPQM.2007.013338
  62. Singleton J.A., Nissen L.M. (2014), Future-proofing the pharmacy profession in a hypercompetitive market, Research in Social and Administrative Pharmacy, 10, 2, pp. 459-468.
  63. Sousa S.D., Aspinwall E., Sampaio P.A., Rodrigues A.G. (2005), Performance measures and quality tools in Portuguese small and medium enterprises: survey results, Total Quality Management and Business Excellence, 16, 2, pp. 277-307. DOI: 10.1080/14783360500054434
  64. Vagnoni E. (2017), La Pharmaceutical Care in Europa, in AA.VV, Gli scenari della distribuzione farmaceutica, Roma, Vecchiarelli Editore, pp. 34-45.
  65. Vagnoni, E. (2013). Le sfide manageriali delle farmacie: un’analisi del contesto italiano. Milano, FrancoAngeli.
  66. Vagnoni E., Heidari M. (2011), PHP90 The Reform of the Community Pharmacy in Italy Between New Role and Managerialism, Value in Health, 14, 7, pp. A349.
  67. Zacca R., Dayan M. (2018), Linking managerial competence to small enterprise performance within the dynamic capability logic, Journal of Small Business and Enterprise Development, 25, 2, pp. 256-276. DOI: 10.1108/JSBED-02-2017-0042

  • Business continuity and planning effectiveness: An empirical analysis of Italian manufacturing SMEs Francesca Sgrò, Federica Palazzi, Massimo Ciambotti, in MANAGEMENT CONTROL 3/2022 pp.89
    DOI: 10.3280/MACO2022-003005

Chiara Oppi , Caterina Cavicchi, Emidia Vagnoni, How does management accounting affect entrepreneurial orientation in SMEs? A structural equation modelling in "MANAGEMENT CONTROL" Suppl. 1/2020, pp 63-78, DOI: 10.3280/MACO2020-001-S1005