Article review of “On the emergence
of strategic management accounting”
How
to present this article in Harvard reference format
Ma, Y. &
Tayles, M., 2009. On the emergence of strategic management accounting: an
institutional perspective. Accounting and Business Research, 39(5),
pp.403-430.
What are the key research issues the article wants to address?
The key research issues the article aims to address are:
1.
How Strategic Management Accounting (SMA) practices have
been adopted within the processes of management accounting change in an
organization.
2.
What kind of change process the case company experienced
during the adoption of SMA practices.
3.
What causes or influences the change in management
accounting practices, particularly the evolving strategic role of management
accountants.
4.
Understanding how accountants engage with strategic
issues beyond merely reporting financial data.
5.
The influence of organizational environments and actions
on the adoption and diffusion of SMA practices, moving beyond popularity to
explaining why certain practices are adopted or rejected.
These issues are highlighted as gaps in prior research
which mostly focused on describing popular SMA practices without sufficient
analysis of the underlying adoption processes, organizational contexts, and
role changes of management accountants
Describe
two main theories employed in this article.
The article employs two main theoretical
perspectives:
1.
Neoinstitutional Theory:
- This is the primary theoretical framework used to analyze
management accounting change and SMA adoption in the case company.
- Neoinstitutionalism focuses on how organizations are embedded in
wider social, economic, and institutional fields or populations and how
institutional pressures (coercive, mimetic, normative) influence
organizational behaviors and change processes.
- The theory stresses that management accounting change is not only a
technical matter but also involves social and political dynamics, power
relations, and value commitments within organizations.
- The article applies neoinstitutional concepts such as archetypal
templates (organizational configurations shaping values and privileges),
value commitments, and capacity for action to explain how SMA practices
emerged as administrative innovations influenced by both external
pressures (market competition, regulation) and internal organizational
actions.
2.
Strategic Management Accounting (SMA) Theory:
- SMA itself is treated as a conceptual framework or body of
management accounting concerned with generating strategically oriented
information that supports decision-making and control.
- SMA emphasizes a broader business perspective beyond traditional
financial measures, incorporating non-financial, competitor-related, and
long-term oriented information for strategy formulation and
implementation.
- The article reviews the SMA literature, its contested definitions,
and its intent to elevate the role of accountants to strategic partners who
actively participate in decision-making rather than only producing routine
financial reports.
- SMA theory provides the substantive content of the management
accounting changes observed in the company, framing these changes as
comprising competitor performance appraisal, customer profitability
analysis, and forward-looking strategic measures.
Together, neoinstitutional theory offers the lens
for understanding the processes and contextual drivers of change, while SMA
theory provides the content and direction of the management accounting change
under study.
Describe 3 main
claims of the article in terms of Toulmin's model of argument.
Using Toulmin's
model of argument—which consists of Claim, Data (Evidence), and Warrant (the
reasoning that links data to claim)—three main claims from the article can be
described as follows:
1.
Claim 1: The adoption of Strategic Management
Accounting (SMA) practices is influenced by both organizational environments
and organizational actions, and is not merely a matter of popularity or
technical implementation.
- Data: The case study showed that SMA adoption depended on external
pressures such as market competition and internal factors like strategic
alignment and managerial support, rather than just the existence of SMA
techniques. Resistance within the organization also affected adoption.
Existing survey evidence showed low adoption rates and limited awareness
of SMA, despite perceived merits.
- Warrant: Understanding SMA adoption requires examining the organizational
context and human agency within firms, as SMA practices emerge as
administrative innovations shaped by these factors, rather than from
simple diffusion or technical characteristics.
2.
Claim 2: SMA adoption and management accounting
change can be better understood through a neoinstitutional theoretical
framework, which links organizational contexts to organizational actions.
- Data: The article draws on neoinstitutionalism to explain how power
relations, value commitments, and capacity for action within the
organization influenced the emergence of SMA practices in the case
company, such as the role of senior managers and cross-functional
cooperation programs (e.g., IBP).
- Warrant: Neoinstitutional theory provides a richer explanation of
management accounting change by accounting for social, political, and
institutional dynamics, thereby illuminating why and how organizational
actors embrace or resist new SMA practices.
3.
Claim 3: Effective SMA implementation involves a
shift in the role of management accountants from routine financial reporting
towards strategic involvement in decision-making supported by non-financial and
forward-looking information.
- Data: Evidence from the case showed management accountants acting as
'sparring partners' or strategic advisors, being embedded within marketing
teams, and producing reports featuring competitor, customer, and long-term
indicators rather than only historical financial data. This change
improved cooperation between finance and other business functions and
supported strategic goals.
- Warrant: SMA’s strategic orientation requires new roles and skills for
accountants to contribute meaningfully to strategy formulation, thus
moving beyond a traditional bean-counter image towards becoming integral
to business decision processes.
These claims
together address the article’s principal arguments about the nature, causes,
and implications of SMA adoption and management accounting change.
** reference: a collection of management accounting notes
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