Strategic Management Accounting and financial performance in the small and medium sized Italian manufacturing enterprises

Journal title MANAGEMENT CONTROL
Author/s Fabio Santini
Publishing Year 2013 Issue 2013/1
Language Italian Pages 31 P. 77-107 File size 872 KB
DOI 10.3280/MACO2013-001005
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

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.

Firstly, the present paper proposes a theoretical framework of Strategic Management Accounting (SMA) in the context of small and medium sized enterprises (SMEs). Additionally, it examines the actual diffusion of SMA with reference to a sample of 40 SMEs from central Italy. Finally, it presents a contingent model based on a regression analysis in order to identify the determinants of traditional and SMA tool introduction and their influence on the financial performance distinguishing between high- and low-complexity companies. For this purpose, a mixed quantitative and qualitative information was employed. The quantitative data was acquired through a survey and the study of AIDA database while the qualitative one through interviews. In contrast with some earlier assumptions, the findings show a higher than expected SMA diffusion in SMEs, combined with a proactive approach in the organizations which introduced it, largely in an informal way. The study also reveals that SMEs which operate in a high-complexity environment use SMA tools more extensively to achieve higher financial performance.

Keywords: Strategic Management Accounting, Financial Performance, Small And Medium Sized Enterprises

  1. Ahmed P. K., & Rafiq M. (1998), A customer-oriented framework for empowering service employees, Journal of Services Marketing, 12(5): 379-396. DOI: 10.1108/08876049810235423
  2. Ahrens T., & Chapman C. S. (2005), Management control systems and the crafting of strategy: a practice-based view. In C. S. Chapman (Ed.), Controlling Strategy: Management, Accounting and Performance Measurement. Oxford: Oxford University Press.
  3. Allen M. P., & Panian S. K. (1982), Power performance and succession in the large corporation. Administrative Science Quarterly, 27: 538-547. DOI: 10.2307/2392529
  4. Appiah-Adu K., & Singh S. (1998), Customer orientation and performance: s stuy of SMEs, Management Decision, 36(6): 385-394. DOI: 10.1108/00251749810223592
  5. Arnold J., Cherry A., Diamond M., & Walker J. (1984), Small business: an area ripe for practice development, Journal of Accountancy, August: 74-82.
  6. Ashton D., Hopper T., & Scapens R. (1991), The Changing Nature of Issues in Management Accounting. In D. Ashton, T. Hopper, & R. Scapens (Eds.), Issues in Management Accounting. Hemel Hempstead: Prentice-Hall.
  7. Ballantine J., Levy M., & Powell P. (1998), Evaluating information systems in SMEs: issues and evidence, European Journal of Information System, 7(4): 241-251. DOI: 10.1057/palgrave.ejis.3000307
  8. Bellis-Jones R. 1989. Customer profitability analysis, Management Accounting, 63: 26-28.
  9. Belohav, J. A. (1993), Quality, strategy and competitiveness, California Management Review, (35): 55-67. DOI: 10.2307/41166743
  10. Bessant J., & Tidd J. (2007), Innovation and enterpreneurship. Chichester, UK: Wiley
  11. Bhimani A., & Bromwich M. (1992), Management accounting: Evolution in progress. In C. Drury (Ed.), Management accounting handbook. Oxford: Wiley.
  12. Bhimani A., & Langfield-Smith K. (2007), Structure, formality and the importance of financial and non financial information in strategy development and implementation, Management Accounting Research, (18): 3-31. DOI: 10.1016/j.mar.2006.06.005
  13. Birkett W. P., Barbera M. R., Chua W. F., Fatseas V. A., Luckett P. F., & MacMullen J. S. (1992), Cost Management in Small Manufacturing Enterprises. Sydney: Australian Centre for Management Accounting Development UNSW
  14. Bradley U. (1987), Applied Marketing and Social Research. Chichester: Wiley
  15. Braverman J. D. (1984), Maximizing Profits in Small and Medium-Sized Businesses. New York, NY: Van Nostrand Reinhold Company.
  16. Bromwich M. (1990), The case for strategic management accounting: The role of accounting information for strategy in competitive markets, Accounting, Organizations and Society, (15): 27-46. DOI: 10.1016/0361-3682(90)90011-I
  17. Brownlie D. (1999), Benchmarking your marketing process, Long Range Planning, 31: 88- 95. DOI: 10.1016/S0024-6301(98)00129-0
  18. Bubbio A., & Rubello U. (2007), Calcolo dei costi: quali pratiche vengono eseguite dalle imprese italiane? Liuc Papers, 201 (Aprile).
  19. Cadez S., & Guilding C. (2008), An exploratory investigation of an integrated contigency model of strategic management accounting, Accounting, Organizations and Society, 33(7/8): 836-863. DOI: 10.1016/j.aos.2008.01.003
  20. Catturi G., & Mussari R. (Eds.) (1996). Il controllo di gestione seguito nelle imprese operanti nelle province di Bologna, Firenze, Perugia e Siena. Padova: Cedam
  21. Cavazzoni G. (1994), Il sistema informativo aziendale nell’economia delle piccole e medie imprese, con particolare riferimento al caso dell’Umbria. Paper presented at the I servizi informativi per l’internazionalizzazione delle piccole e medie imprese, Perugia.
  22. Chenhall R. H. (2003), Management control system design within its organizational context: findings from contingency-based research and directions for the future, Accounting, Organizations and Society, 28: 123-168. DOI: 10.1016/S0361-3682(01)00027-7
  23. Chenhall R. H., & Langfield-Smith K. (1998), Factors influencing the role of management accounting in the development of performance measurements within organizational change programs, Management Accounting Research, 9(4): 361-386. DOI: 10.1006/mare.1998.0080
  24. Chenhall R. H., & Moers F. (2007), The issue of endogeneity within theory-based, quantitative management accountin research European Accounting Review, 16(1): 173- 195. DOI: 10.1080/09638180701265937
  25. Cinquini L., & Tenucci A. (2010), Strategic management accounting and business strategy: a loose coupling?, Journal of Accounting & Organizational Change, 6(2): 228-259. DOI: 10.1108/18325911011048772
  26. Cooper R., & Kaplan R. S. 1999. The Design of Cost Management Systems (2 ed.). New York, NY: Prentice-Hall
  27. Cooper R., Kaplan R. S., Maisel L. S., Morrisey E., & Oehm R. M. (1992), Implementing Activity-based Cost Management: Moving from Analysis to Action. Montvale, NJ: Institute of Management Accountants
  28. Cooper R., & Slagmulder R. (1999), Develop Profitable New Products with Target Costing, Sloan Management Review, July, 15
  29. Cravens K. S., & Guilding C. (1999), Strategic brand valuation: A cross-functional perspective, Business Horizons, 42: 53-62. DOI: 10.1016/S0007-6813(99)80064-0
  30. Cravens K. S., & Guilding C. (2001), An empirical study of the application of strategic management accounting techniques, Advances in Management Accounting, 10: 95-124
  31. Czyzewski A. B., & Hull R. (1991), Improving profitability with life cycle costing, Journal of Cost Management, 5: 20-27
  32. Dekker H. C. (2003), Value chain analysis in interfirm relationships: a field study, Management Accounting Research, 14:1-23. DOI: 10.1016/S1044-5005(02)00067-7
  33. Docter H. J., & Stokman C. T. M. (1987), Innovatie, een kwestie van informatie. Kleinbedrijf: Economisch Instituut voor het Midden
  34. Donckels R., & Lambrecht J. 1994. Netwerken en KMO-groei: een verklarend model, Tijdschrift voor Economie en Management, 39(2): 155-176.
  35. Drury C., & Tayles M. (1994), Product costing in UK manufacturing organizations, The European Accounting Review, 3(3): 443-469. DOI: 10.1080/09638189400000031
  36. Dunk A. S. (2004), Product life cycle cost analysis: the impact of customer profiling, competitive advantage, and quality of IS information, Management Accounting Research, 15: 401-414. DOI: 10.1016/j.mar.2004.04.001
  37. Elnathan D., Lin T. W., & Young M. S. (1996), Bencharking and management accounting: a framework for research, Journal of Management Accounting Research, 8: 37-54.
  38. Fiengenbaum A., & Karnani A. (1991), Output flexibility: a competitive advantage for small firms, Strategic Management Journal, 12(2): 101-114. DOI: 10.1002/smj.4250120203
  39. Foster G., & Gupta M. (1994), Marketing, cost management and management accounting, Journal of Management Accounting Research, 6: 43-77.
  40. Foster G., Gupta M., & Sjoblom L. (1996), Customer profitability analysis: challenges and new directions, Journal of Cost Management, 10: 5-17.
  41. Gerdin J., & Greve J. (2004), Forms of contingenty fit in management accounting research - a critical review, Accounting, Organizations and Society, 29(3/4): 303-326. DOI: 10.1016/S0361-3682(02)00096-X
  42. Gibb A., & Dyson J. (1984), Stimulating the growth of owner managed firms. In J. Lewis, J. Stanworth & A. Gibb (Eds.), Success and Failure in Small Business: 249-258. Aldershot: Gower Publishing Company
  43. Guilding C. (1992), Should management accounting take up the brand valuation challenge? Management Accounting, 70: 44-46.
  44. Guilding C. (1999), Competitor-focused accounting: an exploratory note, Accounting, Organizations and Society, 24(7): 583-595. DOI: 10.1016/S0361-3682(99)00007-0
  45. Guilding C., Cravens K. S., & Tayles M. (2000), An international comparison of strategic management accounting practices, Management Accounting Research, 11(1): 113-135. DOI: 10.1006/mare.1999.0120
  46. Guilding C., & McManus L. (2002), The incidence, perceived merit and antecedens of customer accounting: an exploratory note, Accounting, Organizations and Society, 27: 45-59. DOI: 10.1016/S0361-3682(01)00030-7
  47. Gul F. A. (1991), The effects of management accounting system and environmental uncertaninty on small business manager’s performance, Accounting & Business Research, 22(85): 57-61. DOI: 10.1080/00014788.1991.9729418
  48. Gul F. A., & Chia Y. M. (1994), The effects of management accounting systems, perceived environmental uncertainty and decentralization on managerial performance: A test of three-way interaction, Accounting, Organizations and Society, 19: 413-426. DOI: 10.1016/0361-3682(94)90005-1
  49. Heagy C. D. (1991), Determinating optimal quality costs by considerin cost of lost sales, Journal of Cost Management, Fall: 64-72.
  50. Hergert M., & Morris D. (1989), Accounting Data for Value Chain Analysis, Strategic Management Journal, 20(2): 175-188. DOI: 10.1002/smj.4250100207
  51. Holmes S., Kelly G., & Cunningham R. (1991), The small firm information cycle: a reappraisal, International Small Business Journal, 4(1): 41-53. DOI: 10.1177/026624269100900203
  52. Holmes S., & Nicholls D. (1989), Modelling the accounting information requirements of small businesses, Accounting & Business Research, 19(74): 143-150. DOI: 10.1080/00014788.1989.9728844
  53. Ittner C. D., & Larcker D. F. (1997), Quality strategy, strategic control system, and organizational performance, Accounting, Organizations and Society, April/May Ittner C. D., & Larcker D. F. (2001), Assessing empirical research in managerial accounting: a value-based management perspective, Journal of Accounting and Economics, 32: 349- 410. DOI: 10.1016/S0165-4101(01)00026-X
  54. J. I., & Mitchell F. (1995), A survey of activity-based costing in the UK’s largest companies, Management Accounting Research, 6(2): 137-153.
  55. Jones, L. 1988. Competitor cost analysis at Caterpillar. Management Accounting, October: 32-38.
  56. Kaplan R. S., & Norton D. P. (1992), The Balanced Scorecard - Measures that Drive Performance, Harvard Business Review(January-February): 71-79.
  57. Kaplan R. S., & Norton D. P. (1996), Linking the balanced scorecard to strategy. California Management Review, Fall: 53-79. DOI: 10.2307/41165876
  58. Kaplan R. S., & Norton D. P. (2000), The Strategy-focused Organization. Boston, MA: Harvard Business School Press
  59. Kirby D. A., & King S. H. (1997), Accountants and Small Firm Development: Filling the Expectation Gap, The Service Industries Journal, 17(2): 294-304. DOI: 10.1080/02642069700000017
  60. Langfield-Smith K. (2007), A review of quantitative research in management control systems and strategy. In C. S. Chapman, A. G. Hopwood, & M. D. Shields (Eds.), Handbook of Management Accounting Research, Vol. 2: 753-784. Oxford: Elsevier. DOI: 10.1016/S1751-3243(06)02012-8
  61. Libby T., & Waterhouse J. H. (1996), Predicting change in management accounting systems, Journal of Management Accounting Research, 8: 137-150.
  62. Lybaert N. (1998), The information use in an SME: its importance and some elements of influence, Small Business Economics, 10(2): 171-191. DOI: 10.1023/A:1007967721235
  63. Lynch R. L., & Cross K. F. (1992), Measure Up - Yardsticks for Continuous Improvement. Cambridge, MA: Basil Blackwell.
  64. Marasca S., & Silvi R. (Eds.) (2004), Sistemi di controllo e cost management tra teoria e prassi. Torino: Giappichelli
  65. Marchini I. (1995), Il governo della piccola impresa. Urbino: ASPI
  66. Marriott N., & Marriott P. (2000), Professional Accountants and the Development of a Management Accounting Service for the Small Firms: Barriers and Possibilities, Management Accounting Research, 11(4): 475-492. DOI: 10.1006/mare.2000.0142
  67. McNair C. J., & Leibfried K. (1992), Benchmarking: A Tool for continuous Improvement. Essex Junction, TX: Omneo.
  68. McNair C. J., & Vangermeersch R. (1998), Total capacity management: optimizing ate the operational, tactical and strategic level. Boca Raton: St. Lucie Press.
  69. Merchant K. (1981), The design of corporate budgeting system: influences of managerial behaviour and performance, The Accounting Review, October: 813-829.
  70. Miller J. G., & Vollman T. H. (1985), The hidden factory, Harvard Business Review, September/October.
  71. Minzberg H. (1987), Crafting strategy, Harvard Business Review, 65: 66-75.
  72. Minzberg H., Quinn J. B., & Voyer J. (1995), The strategy process. Englewood Cliffs, NJ: Prentice-Hall
  73. Mitchell F., & Reid G. (2000), Problems, Challenges and Opportunities: Small Business as a Setting for Management Accounting, Management Accounting Research, 11(4): 385- 390. DOI: 10.1006/mare.2000.0152
  74. Monden Y., & Hamada K. (1991), Target costing and kaizen costing in Japanese automobile companies, Journal of Management Accounting Research, Fall: 16-34.
  75. Moon P., & Bates K. (1993), Core analysis in strategic performance appraisal, Management Accounting Research, 4: 139-152. DOI: 10.1006/mare.1993.1009
  76. Morgan M. J. (1993), Accounting for strategy. Management Accounting, May: 20-24
  77. Nanni A. J., Dixon J. R., & Vollman T. E. (1992), Integrated performance measurement: management accounting to support the new manufacturing realities. Journal of Management Accounting Research, Fall: 1-19.
  78. Narayanan V. K. (2001), Managing Technology and Innovation for Competitive Advantage. Upper Saddle River, NJ: Prentice-Hall.
  79. Oliver L. (1991), Accoutants as business partners. Management Accounting, 72: 40-42.
  80. Ouchi W. G. (1979), A conceptual framework for the design of organizational control mechanism, Management Science: 833-849. DOI: 10.1287/mnsc.25.9.833
  81. Pondy L. R. (1969), Effects of size, complexity on administrative intensity, Administrative Science Quarterly, 14: 47-60. DOI: 10.2307/2391361
  82. Porter M. (1985), Competitive Advantage. New York, NY: The Free Press
  83. Qian G., & Li L. (2003), Profitability of small and medium-sized enterprises in high-tech industries: the case of the biotechnology industry, Strategic Management Journal, 24(9): 881-887. DOI: 10.1002/smj.344
  84. Rangone A. (1997), Linking organization effectiveness, key success factors and performance measures: An analytucal framework, Management Accounting Research, 8(2): 207-219. DOI: 10.1006/mare.1996.0039
  85. Romano C. A., & Ratnatunga J. (1994), Growth stages of small manufacturing firms: the relationship with planning and control, British Accounting Review, 26(2): 173-195. DOI: 10.1006/bare.1994.1012
  86. Roslender R., & Hart S. J. (2003), In search of strategic management accounting: theoretical and field study perspectives, Management Accounting Research, 14(3): 255-279. DOI: 10.1016/S1044-5005(03)00048-9
  87. Santini F. (2007), Riflessioni sulle esigenze informative del controllo di gestione nelle piccole e medie imprese italiane. Paper presented at the Aspetti evolutivi della comunicazione d’impresa: teoria e strumenti innovativi, Bari
  88. Scapens R. (1994), Never Mind the Gap: Towards an Institutional Perspective on Management Accounting Practice, Management Accounting Research, 5(3-4): 301-321. DOI: 10.1006/mare.1994.1019
  89. Scapens R. (2006), Understanding Management Accounting Practices: A personal Journey, British Accounting Review, 38(1): 1-30. DOI: 10.1016/j.bar.2005.10.002
  90. Shank J. K. (1996), Analyzing technology investment - From NPV to strategic cost management (SCM), Management Accounting Research, 7: 185-197. DOI: 10.1006/mare.1996.0011
  91. Shank J. K., & Govindarajan V. (1988), Making strategy explicit in cost analysis: A case study, Sloan Management Review, 29: 19-30.
  92. Shank J. K., & Govindarajan V. (1992), Strategic cost management: the value chain perspective, Journal of Management Accounting Research, Fall: 179-198.
  93. Shank J. K., & Govindarajan V. (1993), Strategic Cost Management: The New Tool for Competitive Advantage. New York, NY: The Free Press
  94. Shein E. H. (1990), Organizational culture, American Psycologist, 45: 109-119. DOI: 10.1037/0003-066X.45.2.109
  95. Shields M. D., & Young M. S. (1991), Managing product life cycle cost: an organizational model, Journal of Cost Management, 5: 39-52.
  96. Simmonds K. (1981), Strategic management accounting, Management Accounting, 59: 26- 29.
  97. Simmonds K. (1982), Strategic management accounting for pricing: a case example, Accounting & Business Research, 47: 206-214.
  98. Simmonds K. (1986), The accounting assessment of competitive position, European Journal of Marketing, 20: 16-32. DOI: 10.1108/EUM0000000004626
  99. Slater S. F., & Narver J. C. (1994), Market orientation, customer value and superior performance, Business Horizons, 37: 22-28. DOI: 10.1016/0007-6813(94)90029-9
  100. Storey D. J. (1995), Understanding Business Sector. London: Routledge.
  101. Templeman J. G., & Wootton C. (1987), Small Businesses: Management Information Needs, London: Chartered Institute of Management Accountants.
  102. Ward K. (1992), Strategic Management Accounting. Oxford: Butterworth-Heinemann
  103. Wilson R. M. S. (1991), Strategic management accounting. In D. Ashton, T. Hopper, & R. Scapens (Eds.), Issues in Management Accounting. New York, NY: Prentice-Hall.
  104. Wilson R. M. S. (1995), Strategic management accounting. In D. Ashton, T. Hopper, & R. Scapens (Eds.), Issues in Management Accounting: 159-190. London: Prentice-Hall
  105. Zeithaml V. A. (2000), Service quality, profitability, and the economic worth of customers: what we know and what we need to learn, Academy of Marketing Science Journal, 28: 67-85. DOI: 10.1177/0092070300281007

  • ICT e piccole imprese. Il Cubo della Predisposizione Tecnologica Aziendale Francesca Maria Cesaroni, Domenico Consoli, in MANAGEMENT CONTROL 1/2015 pp.73
    DOI: 10.3280/MACO2015-001004
  • Controllo e complessità. Il ruolo delle forme di rappresentazione per il governo di problemi complessi Filippo Zanin, Eugenio Comuzzi, in MANAGEMENT CONTROL 2/2016 pp.89
    DOI: 10.3280/MACO2016-002005
  • Strategic planning for value creation in business networks. Conceptual framework and theoretical proposals Andrea Cardoni, Filippo Zanin, Francesca Bartolacci, George H. (Jody) Tompson, in MANAGEMENT CONTROL 1/2018 pp.17
    DOI: 10.3280/MACO2018-001002
  • How Italian companies are monitoring innovation Anna Arcari, Anna Pistoni, Enrico Moretto, Paolo Ossola, Daniele Tonini, in MANAGEMENT CONTROL 2/2016 pp.143
    DOI: 10.3280/MACO2016-002007
  • Quality practices in travel agencies Jordi Perramon, Llorenç Bagur-Femenias, Oriol Amat, in Industrial Management & Data Systems /2015 pp.1325
    DOI: 10.1108/IMDS-04-2015-0133
  • La comunicazione al mercato delle performance economico-finanziarie: il ruolo del controllo di gestione Luciano Marchi, Sara Trucco, in MANAGEMENT CONTROL 3/2017 pp.55
    DOI: 10.3280/MACO2017-003005
  • La Network Governance a supporto dell'Open Innovation: un'analisi della letteratura Palmira Piedepalumbo, Concetta Metallo, Daniela Mancini, in MANAGEMENT CONTROL 3/2017 pp.79
    DOI: 10.3280/MACO2017-003006
  • Nghiên cứu mức độ sẵn sàng áp dụng kế toán quản trị chiến lược ở các doanh nghiệp vừa và nhỏ trên địa bàn thành phố Hà Nội Soa Nguyễn La, in Journal of Trade Science /2023 pp.69
    DOI: 10.54404/JTS.2023.175V.07
  • Il controllo relazionale nelle destinazioni Turistiche: alcune evidenze empiriche Valeria Cataldo, in MANAGEMENT CONTROL 3/2015 pp.23
    DOI: 10.3280/MACO2015-003003
  • Esiste una strategia di Internal Auditing che crea valore? Un'analisi empirica del contesto italiano Giuseppe D'Onza, Alessandra Rigolini, Francesco Brotini, in MANAGEMENT CONTROL 1/2016 pp.125
    DOI: 10.3280/MACO2016-001008
  • Risk management and firm size: a survey of Italian private companies Elisabetta Mafrolla, Felice Matozza, in MANAGEMENT CONTROL 3/2015 pp.87
    DOI: 10.3280/MACO2014-003005
  • A Conceptual Framework for Assessing the Use of Strategic Management Accounting in Small and Medium Enterprises Abolfazl Amanollah Nejad Kalkhouran, Siti Zaleha Abdul Rasid, Saudah Sofian, Bahareh Hossein Nezhad Nedaei, in Global Business and Organizational Excellence /2015 pp.45
    DOI: 10.1002/joe.21644
  • Performance Audit in the Public Sector. What is the contribution to the Performance Management? Luciano Marchi, Manuela Bertei, in MANAGEMENT CONTROL 3/2016 pp.49
    DOI: 10.3280/MACO2016-003004

Fabio Santini, Strategic Management Accounting and financial performance in the small and medium sized Italian manufacturing enterprises in "MANAGEMENT CONTROL" 1/2013, pp 77-107, DOI: 10.3280/MACO2013-001005