The moderating effect of corporate size on the relationship between prospector strategy and management accounting practices

Federica Palazzi (), Francesca Sgrò (), Massimo Ciambotti, Nick Bontis () and Lorenzo Gelsomini ()
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Federica Palazzi: University of Urbino
Francesca Sgrò: University of Urbino
Nick Bontis: McMaster University
Lorenzo Gelsomini: TM and Partners

Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, 2023, vol. 34, issue 2, No 1, 135-165

Abstract: Abstract The relevant role of management accounting within large companies is highly recognized. However, there is little evidence of its role in Small and Medium-sized Enterprises (SMEs), especially concerning the variables affecting the adoption and usefulness of Management Accounting Practices (MAPs). This study aims at verifying the moderator effect of corporate size on the relationship between prospector strategies, governance bodies and MAPs. In detail, the governance bodies’ demand for MA and the prospector strategy (oriented to opportunity-seeking and problem-anticipating) can affect MAPs’ adoption and usefulness, especially when investigating the role of corporate size as a moderator variable. A survey was administered to a sample of SMEs located in Italy. Descriptive statistical analysis and ordinary least squares (OLS) models were employed. The empirical analysis shows that the governance bodies’ demand for MA positively affects both MAPs’ adoption and usefulness. The prospector strategy also positively influences the level of MAPs’ adoption. This study confirms the critical role of corporate size but as a moderator variable. The corporate size negatively moderates the positive effect of a prospector strategy on MAPs’ adoption. Hence, the prospector strategy is more positively linked to MAPs’ adoption for smaller firms than for bigger firms. Thus, the prospector strategy among smaller companies is fundamental when promoting the spread of MAPs to support decision-making processes.

Keywords: Management accounting practices; Small and medium-sized enterprises; Firm size; Strategy (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s00187-023-00353-2

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