The Effect of Traditional and Contemporary Management Accounting Practices on Organisational Outcomes and the Moderating Role of Strategy

Nuraddeen Abubakar Nuhu, Kevin Baird and Lu Jiao
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Nuraddeen Abubakar Nuhu: Macquarie University
Kevin Baird: Macquarie University
Lu Jiao: Macquarie University

American Business Review, 2023, vol. 26, issue 1, 95-121

Abstract: This study examines the association between the use of a package of contemporary and a package of traditional management accounting practices with organisational outcomes (organisational performance and competitive advantage), and the moderating role of Miles and Snow’s (1978) strategic typologies on these relationships. Based on the responses from 505 US based financial managers, the Structural Equation Modelling (SEM) results indicate that the extent of use of both contemporary and traditional management accounting practices is positively associated with organisational performance and competitive advantage. Furthermore, the findings indicate that with the exception of the reactor typology, Miles and Snow’s (1978) strategy typologies (i.e., defender, prospector, and analyser) moderate the association between the use of management accounting practices with the organisational outcomes. In particular, the findings indicate that the defender (prospector) strategy positively (negatively) moderates the association between the use of a package of traditional (contemporary) management accounting practices with organisational performance. In addition, the results indicate that the defender (analyser) strategy positively (negatively) moderates the association between the use of a package of contemporary management accounting practices with competitive advantage, while the defender (analyser) strategy negatively (positively) moderates the association between the use of a package of traditional management accounting practices with competitive advantage.

Keywords: Contemporary Management Accounting Practices; Traditional Management Accounting Practices; Package of Management Accounting Practices; Miles and Snow Strategy; Organisational Performance; Competitive Advantage (search for similar items in EconPapers)
JEL-codes: L00 (search for similar items in EconPapers)
Date: 2023
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