Article review of “Management accounting and control practices in a lean manufacturing environment”: for advanced management accounting study

Article review of “Management accounting and control practices in a lean manufacturing environment”: for advanced management accounting study

 

How to present this article in Harvard reference format?

Fullerton, R.R., Kennedy, F.A. & Widener, S.K., 2013. Management accounting and control practices in a lean manufacturing environment. Accounting, Organizations and Society, 38(1), pp.50–71. doi:10.1016/j.aos.2012.10.001

 

 What are the key research issues the article wants to address?

The key research issues addressed by the article are:

1.    Whether and how management accounting and control practices are used to support lean manufacturing strategies in manufacturing firms. The study investigates if firms alter their management accounting and control practices to align with lean manufacturing.

2.    Understanding the relationship between the extent of lean manufacturing implementation and five specific management accounting and control practices: value stream costing, inventory tracking, simplified strategic reporting system, visual performance measurement information, and employee empowerment.

3.    Gaining insight into how these management accounting and control practices work together as a package to support a lean manufacturing strategy, exploring both additive and interactive relationships amongst these practices.

4.    Providing empirical evidence on the conditional relationship between inventory tracking and lean manufacturing, particularly how it is influenced by top management support for change in production strategies.

These issues respond to gaps in existing accounting research regarding the alignment and integration of management accounting controls with lean manufacturing environments.

 

Describe two main theories employed in this article.

The two main theories employed in the article are:

1.    Contingency Theory The article draws on contingency theory to explain that organizations must adapt their structures, including management accounting and control systems, to fit specific contingencies such as the environment, organizational size, and business strategy to perform well. In this context, lean manufacturing represents a strategic contingency that requires appropriate alignment of management accounting and control practices.

2.    Congruence Model (Nadler & Tushman) The congruence model is used to emphasize the importance of internal consistency or "fit" among organizational components—people, work, formal and informal environments—to achieve organizational effectiveness. The model posits that changes in one component (e.g., implementing lean manufacturing in work processes) require corresponding adjustments in other components (e.g., management accounting controls and employee roles) for congruence. Misfit can lead to inefficiencies or ineffectiveness.

Together, these theories provide a framework for understanding how management accounting and control practices can and should be aligned to support a lean manufacturing strategy, ensuring organizational fit and improved performance

 

Describe 3 main claims of the article in terms of Toulmin's model of argument.

Using Toulmin's model of argument—which involves claims, grounds (evidence), and warrants (reasoning linking grounds to claims)—three main claims from the article are as follows:

1.    Claim 1: The extent of lean manufacturing implementation positively influences certain management accounting and control practices (employee empowerment, visual performance measurement information, simplified strategic reporting system, and value stream costing) and negatively influences inventory tracking.

• Grounds: Empirical data from 244 US firms and statistical analysis using structural equation modeling support positive relationships with empowerment, visual measures, simplified reporting, and value stream costing, and a negative relationship with inventory tracking (conditional on top management support).
• Warrant: Lean manufacturing strategies require streamlined, visual, and empowering controls that align with value stream-oriented operations, reducing the need for traditional inventory tracking systems.

2.    Claim 2: Management accounting and control practices operate as an integrated package (i.e., they are interrelated and not purely independent practices) in supporting lean manufacturing strategies.

• Grounds: Statistical associations among the set of practices were found even after controlling for lean manufacturing implementation; also, the interaction between inventory tracking and value stream costing depends on lean implementation extent.
• Warrant: For congruence and effective organizational fit under lean manufacturing, coherent combinations (packages) of controls are necessary rather than isolated practices.

3.    Claim 3: Top management support for change in production strategies moderates (enables) the reduction in reliance on inventory tracking when implementing lean manufacturing.

• Grounds: Multigroup analysis split by top management support level revealed that only firms with high support showed a significant negative relationship between lean implementation and inventory tracking reliance.
• Warrant: Change initiatives like lean implementation require active top management backing to facilitate cultural and procedural shifts, such as reducing traditional inventory monitoring.

These claims collectively present an argument that aligning management accounting and control practices with lean manufacturing strategies requires both structural fit among practices and top management commitment to change.

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