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Do innovation attributes really drive the diffusion of management accounting innovations? Examination of factors determining usage intensity of strategic management accounting

Babajide Oyewo (Department of Accounting, University of Lagos, Lagos, Nigeria)

Journal of Applied Accounting Research

ISSN: 0967-5426

Article publication date: 5 February 2021

Issue publication date: 7 May 2021




This study investigates the usage of modern management accounting techniques popularly referred to as “strategic management accounting” (SMA), and the extent to which innovation attributes (namely relative advantage, compatibility, complexity, trialability and observability) determine SMA usage intensity.


Survey data was obtained through a structured questionnaire from 45 out of 56 publicly listed manufacturing companies on the Mainboard of the Nigerian Stock Exchange. Descriptive statistics, one-way ANOVA, exploratory factor analysis, confirmatory factor analysis and structural equation modelling were used to analyse data.


Whereas the overall usage rate of SMA as an innovation is generally moderate, there is significant difference in SMA usage intensity across industries in the manufacturing sector due to environmental uncertainty. Compatibility emerged as the strongest determinant of SMA usage intensity, implying that commercial enterprises would intensely apply SMA to remain innovative, to continuously improve and to incorporate strategy in accounting practice in a bid to survive competition. SMA will witness extensive usage if it aligns with the competitive strategies of an organisation.

Research limitations/implications

The attributes of innovation measured treat all SMA techniques as one, but did not measure relative advantage, compatibility, complexity, trialability and observability for each of the techniques. Future studies may consider investigating how innovation attributes specifically affect each SMA technique. The dimension of compatibility investigated in the study lean towards the alignment of SMA with competitive strategies. Taking into account the multidimensionality of compatibility as an innovation attribute, future studies may examine how past experience of implementing new ideas, as well as compatibility of SMA with corporate culture and value system, affect the dissemination and diffusion of management accounting innovations.

Practical implications

The paper proposes that although innovation attributes may partly explain SMA usage, coercive factors such as competition and environmental uncertainty may also be responsible for the decision to adopt innovative management accounting practices. The study therefore calls for a critical appraisal of how coercive institutional factors such as competition, regulation and actions of key stakeholders influence the decision of organisations to adopt an innovation.


This paper contributes to knowledge by challenging existing knowledge and presenting evidence that innovation attributes acclaimed to determine the spread of an innovation may be inapplicable in certain settings due to some environmental challenges. The study also contributes to knowledge by developing a composite scale for measuring innovation attributes specifically adapted to management accounting innovation, which can be used in future studies.



The Author is grateful to the Editor, Professor Othmar Lehner and two anonymous reviewers for their insightful comments and suggestions in improving the earlier versions of the paper.Funding: This work was supported by the Institute of Chartered Accountants of Nigeria (ICAN).


Oyewo, B. (2021), "Do innovation attributes really drive the diffusion of management accounting innovations? Examination of factors determining usage intensity of strategic management accounting", Journal of Applied Accounting Research, Vol. 22 No. 3, pp. 507-538.



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