Strategic management accounting and sense making : a grounded theory study

Abstract

This research investigates the phenomenon of strategic management accounting in multinational companies. It seeks to understand strategic management accounting processes in use in a particular organisational context. Multinational companies are an important phenomenon of our time and researching strategic management accounting in such a setting promises rich insights into its use in a complex environment. Little is known to date on how strategic management accounting is undertaken in organisations and this research contributes to that field of knowledge. Premised on an interpretive theoretical orientation, this research involves a grounded theory study (Strauss and Corbin, 1990, 1998) based on data collected in a large multinational company in Germany.

The research establishes the importance of management accounting for the assessment of strategic situations. It was found that sense making was the main activity underlying strategic management accounting processes. Sense making was defined as involving the understanding of diverse situations, thereby finding and demonstrating their meaning to the company and individuals inside the company. The importance of sense making arose from the presence of a multiplicity of relevant aspects in the organisation's internal and external contexts, all of which had to be taken into account for the assessment of strategic situations. This put a premium on information, professional management accounting and interdisciplinary know-how, and a feel for the game, which intervened in sense making activities. As a consequence, there was found to be a need for an enhanced management accounting skills profile.

This research contributes to interpretive accounting research by providing incremental evidence of a particular phenomenon, strategic management accounting, in a particular setting. It presents rich insights into the use of management accounting in the case site, while also analysing the particular environment of its use, thereby contributing to an emergent understanding of accounting in organisational contexts.

More information

Identifiers

Catalogue record

Export record

ASCII CitationAtomBibTeXData Cite XMLDublin CoreDublin CoreEP3 XMLEndNoteHTML CitationHTML CitationHTML ListJSONMETSMODSMPEG-21 DIDLOpenURL ContextObjectOpenURL ContextObject in SpanRDF+N-TriplesRDF+N3RDF+XMLRIOXX2 XMLReferReference ManagerSimple Metadata