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Journal of Management
Accounting Research
2006, Volume 18
Contents
Special Section: Management Accounting Research in Europe
Articles
Management Accounting Research in German-Speaking Countries
Alfred Wagenhofer
Abstract: This paper reviews current research and practice in management accounting in Germany, Austria, and (part of) Switzerland based on 240 management accounting articles by authors affiliated to a German institution, published in the leading German-language journals and in international management accounting journals from 1998 to 2004. I provide insights into the topics, settings, research methods, and underlying theories used in that literature. Economics-based analytical research is the predominant research method and also had the greatest impact in the international journals. Using examples from theory and practice, I discuss potential reasons for these observations, accomplishments, trends, and potential future developments.
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How Top Management Teams Use Management Accounting Systems to Implement Strategy
David Naranjo-Gil
Frank Hartmann
Abstract: In this paper we investigate how top management teams (TMTs) use management accounting systems (MAS) for strategy implementation. Consistent with upper echelon theory we argue that professional and administrative TMTs differ in their use of MAS, which in turn affects the implementation of strategic policies. We extract three dimensions of MAS use from extant research on the MAS-strategy relationships. We further distinguish between sets of strategic objectives aimed at cost reduction and flexibility enhancement as part of an overall firm strategy. Hypotheses are developed and tested in a survey study among 884 TMT members in all 218 general hospitals in Spain, forming 92 complete TMTs. Overall, we find systematic differences between professional and administrative TMTs in their use of MAS and its effects on strategy implementation. In a secondary analysis, we explore whether the observed differences in the use of MAS are consistent with the coercive-enabling framework recently introduced into the management accounting literature. We find considerable support for the validity of this framework in our sample. Overall, the paper contributes to the growing literature on the role of MAS in supporting strategy implementation. We extend this literature by explicitly recognizing the role of TMT composition in both strategy implementation and the use of MAS and by providing evidence of the validity of the coerciveenabling framework of MAS in a cross-sectional analysis.
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Performance Measure Properties and the Effect of Incentive Contracts
Jan Bouwens
Laurence van Lent
Abstract: Using data from a third-party survey on compensation practices at 151 Dutch firms, we show that less noisy or distorted performance measures and higher cash bonuses are associated with improved employee selection and better-directed effort. Specifically, (1) an increase in the cash bonus increases the perceived selection effects of incentive contracts, but does not independently affect the perceived amount and direction of effort that employees deliver, and (2) performance measure properties directly impact both effort and the selection functioning of incentive contracts. These results hold after controlling for an array of incentive contract design characteristics and for differences in organizational context. Our estimation procedures address several known problems with using secondary datasets.
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Capital Budgeting when Managers Value both Honesty and Perquisites
Brian Mittendorf
Abstract: It has long been recognized that padding of budgets is a concern that can complicate the practice of resource allocation. At the same time, experimental evidence suggests budget padding is somewhat restrained by a managerial preference for honesty. This paper models the confluence of these two incentives and considers the effect on optimal budgeting policies. In the model, budgetary transfers are established so as to reduce the manager's gain from padding which, in turn, forces the manager to think twice before seeking more funds. An effect of this optimal contract is that when facing a manager whose preference for honesty is uncertain, the firm encourages honesty but is resigned to the fact that padding may appear. Contrary to casual intuition, the extent of equilibrium budget padding is not necessarily monotonic in either the extent of information asymmetry or the prevalence of managers who value honesty.
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Assessing the Impact of Benchmarking Antecedents on Quality Improvement and its Financial Consequences
Adam S. Maiga
Fred A. Jacobs
Abstract: The objective of this study is to assess whether firms involved in quality benchmarking projects achieve greater actual quality improvements if they have in place the benchmarking antecedents identified by Elnathan et al. (1996). To show the financial impact of these results, we further assess the effect of quality improvement on profitability, both through relative cost improvement and through other means. To this end, we collected data from 457 manufacturing business units with qualitybenchmarking projects and analyzed the variable relationships using structural equation modeling. The results indicate a strong positive relationship between benchmarking antecedents and quality improvement and a significant impact of quality improvement on relative costs improvement, which in turn is significantly associated with profitability. However, the direct relationship between benchmarking antecedents and relative costs improvement or profitability is not significant, nor is the direct relationship between quality improvement and profitability. These relations are further analyzed within the context of quality and cost systems. Specifically, a comparison between the TQM/Non-ABC group and the Non-TQM/Non-ABC group shows that the TQM/Non-ABC group outperforms the Non-TQM/Non-ABC group and that the Non- TQM/ABC group outperforms the Non-TQM/Non-ABC group. Results show differences between groups, indicating the importance of cost and quality systems in improving manufacturing business unit performance. The implications, limitations, and directions for future research are discussed.
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The Competitive Advantage of Management Accounting
Robert S. Kaplan
No Abstract Provided
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Editorial Policy and Style Information
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