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Contextual factors moderating the impact of strategic management accounting on competitive advantage

Contextual factors moderating the impact of strategic management accounting on competitive advantage
Contextual factors moderating the impact of strategic management accounting on competitive advantage

Purpose: This study investigates the influence of six interrelated contextual factors, namely organisational structure, quality of information technology, business strategy in terms of deliberate strategy-formulation, market orientation, market competition and perceived environmental uncertainty (PEU), on the usage intensity of innovative management accounting techniques commonly referred to as strategic management accounting (SMA); the impact of SMA usage on competitive advantage; and the moderating influence of the contextual factors on the relationship between SMA usage and competitive advantage. Design/methodology/approach: Survey data were obtained through a structured questionnaire from publicly listed manufacturing companies on the main board of the Nigerian Stock Exchange (NSE). Ordinary least squares (OLS) regression and moderated regression were used to analyse data. Both exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were used to examine the validity and reliability of variables as first and second order of analysis. Structural equation modelling (SEM) (maximum likelihood estimation method) was applied to assess the robustness of result. Findings: Market orientation and deliberate strategy-formulation emerged as significant determinants of SMA usage intensity. Although there is a significant relationship between SMA usage and competitive advantage, the strength of the relationship is moderate. Organisational structure, deliberate strategy-formulation and PEU significantly moderate the relationship between SMA usage and competitive advantage. Research limitations/implications: The emergence of deliberate strategy-formulation, as both a significant predictor of SMA usage intensity and as the strongest moderator of the relationship between SMA usage and competitive advantage, establish that it is organisations that take a proactive approach to strategy issues that may derive the most benefit from SMA utilisation. Practical implications: The result from this study brings to fore the need to involve management accountants in strategy-formulation and implementation in order to leverage their competence in deploying SMA techniques to enhance organisational competitiveness. Originality/value: The current study is the first, to the researcher's knowledge, to specifically examine interrelated contextual factors distinctively affecting SMA usage and organisational competitiveness in a developing country. Whilst these six factors have been stressed as important determinants of the adoption of innovative management accounting techniques, the study provides empirical evidence on the extent to which they exert on SMA. The study presents empirical evidence on the relevance of market orientation—a construct which has surprisingly received little research attention in management accounting literature—as a variable which could affect the adoption of management accounting innovation.

Competitive advantage, Contextual factors, Contingency theory, Management accounting innovation, Strategic management accounting
0967-5426
921-949
Oyewo, Babajide
36c93e4d-3041-4cef-8a0d-9f72f417e249
Oyewo, Babajide
36c93e4d-3041-4cef-8a0d-9f72f417e249

Oyewo, Babajide (2022) Contextual factors moderating the impact of strategic management accounting on competitive advantage. International Journal of Management Accounting Research, 23 (5), 921-949. (doi:10.1108/JAAR-04-2021-0108).

Record type: Article

Abstract

Purpose: This study investigates the influence of six interrelated contextual factors, namely organisational structure, quality of information technology, business strategy in terms of deliberate strategy-formulation, market orientation, market competition and perceived environmental uncertainty (PEU), on the usage intensity of innovative management accounting techniques commonly referred to as strategic management accounting (SMA); the impact of SMA usage on competitive advantage; and the moderating influence of the contextual factors on the relationship between SMA usage and competitive advantage. Design/methodology/approach: Survey data were obtained through a structured questionnaire from publicly listed manufacturing companies on the main board of the Nigerian Stock Exchange (NSE). Ordinary least squares (OLS) regression and moderated regression were used to analyse data. Both exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were used to examine the validity and reliability of variables as first and second order of analysis. Structural equation modelling (SEM) (maximum likelihood estimation method) was applied to assess the robustness of result. Findings: Market orientation and deliberate strategy-formulation emerged as significant determinants of SMA usage intensity. Although there is a significant relationship between SMA usage and competitive advantage, the strength of the relationship is moderate. Organisational structure, deliberate strategy-formulation and PEU significantly moderate the relationship between SMA usage and competitive advantage. Research limitations/implications: The emergence of deliberate strategy-formulation, as both a significant predictor of SMA usage intensity and as the strongest moderator of the relationship between SMA usage and competitive advantage, establish that it is organisations that take a proactive approach to strategy issues that may derive the most benefit from SMA utilisation. Practical implications: The result from this study brings to fore the need to involve management accountants in strategy-formulation and implementation in order to leverage their competence in deploying SMA techniques to enhance organisational competitiveness. Originality/value: The current study is the first, to the researcher's knowledge, to specifically examine interrelated contextual factors distinctively affecting SMA usage and organisational competitiveness in a developing country. Whilst these six factors have been stressed as important determinants of the adoption of innovative management accounting techniques, the study provides empirical evidence on the extent to which they exert on SMA. The study presents empirical evidence on the relevance of market orientation—a construct which has surprisingly received little research attention in management accounting literature—as a variable which could affect the adoption of management accounting innovation.

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SMA AND CONTEXTUAL FACTORS ACCEPTED PAPER - Accepted Manuscript
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More information

Accepted/In Press date: 17 November 2021
e-pub ahead of print date: 3 January 2022
Published date: 17 October 2022
Keywords: Competitive advantage, Contextual factors, Contingency theory, Management accounting innovation, Strategic management accounting

Identifiers

Local EPrints ID: 455615
URI: http://eprints.soton.ac.uk/id/eprint/455615
ISSN: 0967-5426
PURE UUID: d42e3fcc-a497-4dc1-a81f-fccb78d6a9a4
ORCID for Babajide Oyewo: ORCID iD orcid.org/0000-0002-4499-601X

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Date deposited: 29 Mar 2022 16:42
Last modified: 17 Mar 2024 04:08

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Author: Babajide Oyewo ORCID iD

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