Management Accounting Systems Change And Sub-Unit Performance: The Moderating Effects Of Perceived Environmental Uncertainty

• Main Authors: SEAMAN, Alfred E., WILLIAMS, John Joseph
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2006
• Subjects: Accounting; Management Information Systems
• Online Access: https://ink.library.smu.edu.sg/soa_research/193; http://www.cluteinstitute.com/ojs/index.php/JABR/article/view/1449
• Institution: Singapore Management University

This study reports the findings of an empirical study that investigated changes in five major management accounting system components (MASCs) and their linkages to the external environment and managerial performance. Responses from 116 Singaporean CFOs located in small- to medium-sized manufacturing and industrial firms were used to test the primary hypothesis that perceived environmental uncertainty (PEU) moderates the MASCs change–performance relationship. Positive evidence permitted subsequent analysis showing that different configurations of MASCs change enhanced CFO performance under both low and high levels of PEU. Further statistical evidence demonstrated that it is changes in specific components, matched with specific levels of PEU, which is responsible for improved performance. When PEU is low, a ‘defensive’ pattern of MASCs change emerged, dominated by more importance placed on emphasizing planning systems changes and de-emphasizing costing systems changes. Under conditions of high PEU, an ‘aggressive’ pattern of change was revealed, characterized by more primacy given to emphasizing novel changes to decision making systems while de-emphasizing changes to reward and bonus systems.