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Article
Publication date: 7 May 2020

Witchulada Vetchagool, Marcjanna M. Augustyn and Mike Tayles

To extend the limited yet conflicting results of prior studies, this paper hypothesizes and statistically tests alternative, structurally different models of likely…

Abstract

Purpose

To extend the limited yet conflicting results of prior studies, this paper hypothesizes and statistically tests alternative, structurally different models of likely positive impacts of activity-based costing (ABC) on organizational performance (OP). It also tests moderating effects of business type and business size.

Design/methodology/approach

To test the models' abilities to explain the data, this comparative study uses survey data from 191 Thai firms, measures validated in the study and structural equation modeling (SEM).

Findings

Extensive use of ABC for cost analysis, cost strategy and cost evaluation directly improves operational performance (OPP); it also indirectly improves financial performance (FP) through improving OPP. The results are similar for manufacturing and non-manufacturing firms and for large firms and small-medium enterprises (SMEs).

Research limitations/implications

Future studies could test the alternative models in other geographical and industrial contexts and could widen the range of control variables.

Practical implications

Monitoring of the effects of ABC use on OPP is crucial to achieving positive financial outcomes. The cross-functional nature of ABC is apparent; for it to be effective managers must ensure cooperation from departments and employees involved in the design and implementation of ABC systems.

Originality/value

This research arbitrates prior inconsistent findings by adopting an original approach of testing structurally different models in a single comparative study, using measures validated in the study. It provides new evidence that extends knowledge about impacts of ABC on OP. Further, it demonstrates its applicability in the context of developing economies.

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Article
Publication date: 1 July 2004

Margaret Webster, David M. Sugden and Mike E. Tayles

The paper discusses the measurement of manufacturing virtuality and, in doing so, contributes to knowledge in the fields of operations strategy, operations management and…

Abstract

The paper discusses the measurement of manufacturing virtuality and, in doing so, contributes to knowledge in the fields of operations strategy, operations management and accounting. Initially, the use of a virtual manufacturing operations strategy within the contemporary business environment is considered. Thereafter, a conceptual scale by which the extent of the virtuality of a manufacturing organisation can be measured is presented. A preliminary version of the scale is described together with its application to three companies manufacturing in the global electronic and electrical industrial sector. These companies, each having adopted different operations strategies, potentially represent the two extremes and a mid‐point on the virtuality scale. The empirical component of the work includes presentation of case study descriptions of the companies and the results of the application of the scale. These are shown to provide evidence of its validity. The final section of the paper analyses the current form of the model and describes how its performance might be informed by the incorporation of concepts from accounting that embrace the financial measurement of intangible company assets. It is a further demonstration of the limitations of conventional financial reporting in dealing with contemporary issues in management and business. The paper concludes by discussing the generic significance of the work and by presenting future directions for the research.

Details

International Journal of Operations & Production Management, vol. 24 no. 7
Type: Research Article
ISSN: 0144-3577

Keywords

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Article
Publication date: 31 July 2007

Mike Tayles, Richard H. Pike and Saudah Sofian

The purpose of the paper was to examine whether, and in what way, managers perceive that the level and shape of intellectual capital (IC) within firms influences…

Abstract

Purpose

The purpose of the paper was to examine whether, and in what way, managers perceive that the level and shape of intellectual capital (IC) within firms influences management accounting practice, specifically, performance measurement, planning and control, capital budgeting, and risk management. It also explores whether such firms are better able to respond to unanticipated economic and market changes and achieve relatively higher performance within their sector.

Design/methodology/approach

The paper is based on the results of a study conducted in Malaysia through a questionnaire survey in 119 large companies with varying levels of IC and selected interviews with both accounting and non‐accounting executives in a subset of them.

Findings

The findings in the paper suggest some evolution in management accounting practices for firms investing heavily in IC. The findings are discussed and further explored through interviews in some of the firms analysed.

Research limitations/implications

The limitations of survey research in this paper are acknowledged, however these are ameliorated by confirmatory insights from the interviews. Further research could be carried out using more extensive case studies in companies, perhaps longitudinally, or undertaken using sector focused surveys.

Practical implications

It is important to show in the paper that management accounting systems reflect the strategic orientation of the companies concerned. Where a greater focus on intangibles and intellectual capital occurs it may require a different emphasis on management accounting practices compared to companies where they do not feature strongly. It is important that management recognise and act on this in order to improve corporate performance.

Originality/value

The paper shows that it is widely recognised that (IC), whether in the form of knowledge, experience, professional skill, good relationships, or technological capacity is a major source of corporate competitive advantage. Whilst the literature places considerable attention on the valuation, measurement and reporting of IC for external reporting purposes, far less attention has so far been given to the implications of IC for managerial accounting practice. This paper addresses this omission.

Details

Accounting, Auditing & Accountability Journal, vol. 20 no. 4
Type: Research Article
ISSN: 0951-3574

Keywords

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Article
Publication date: 1 February 2005

Chris Guilding, Colin Drury and Mike Tayles

This paper has two specific objectives: to appraise the relative importance of cost‐plus pricing and to develop and test hypotheses concerned with contingent factors that…

Abstract

Purpose

This paper has two specific objectives: to appraise the relative importance of cost‐plus pricing and to develop and test hypotheses concerned with contingent factors that might affect the degree of importance attached to cost‐plus pricing.

Design/methodology/approach

Data were collected via a mailed survey of UK and Australian companies. Tests were applied and non‐response bias was not a threat to the validity of the findings.

Findings

A relatively high degree of importance attached to cost‐plus pricing is noted, although there appears to be a substantial number of companies that use cost‐plus pricing for a relatively small sub‐set of products and services. Companies confronted by high competition intensity attach relatively high degrees of importance to cost‐plus pricing and manufacturing companies attach a relatively low degree of importance to cost‐plus pricing.

Originality/value

The paper makes a contribution, given that only two empirical studies with a specific focus on cost‐plus pricing were revealed in a literature search covering the last two decades. Additionally, little has been done to investigate the contingent factors affecting the application of cost‐plus pricing. The significant role played by competition intensity in connection with accounting system design is observed to be one of the more enduring relationships uncovered by management accounting research. But a somewhat perplexing aspect of this study concerns the failure to find a statistically significant positive relationship between company size and cost‐plus pricing.

Details

Managerial Auditing Journal, vol. 20 no. 2
Type: Research Article
ISSN: 0268-6902

Keywords

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Article
Publication date: 1 September 2005

Mike Tayles, Margaret Webster, David Sugden and Andrew Bramley

Of relatively recent origin is the virtual organisation where companies are able to marshal the necessary competencies from a range of independent external agents through…

Abstract

Purpose

Of relatively recent origin is the virtual organisation where companies are able to marshal the necessary competencies from a range of independent external agents through the strategic use of outsourcing mechanisms. The paper discusses the challenge of accounting for intellectual capital (IC) and intangible assets and presents a financial analysis and background of companies exhibiting different levels of virtuality, from traditional manufacturing to virtual manufacturing.

Design/methodology/approach

This paper is based on the interaction of the researchers with three companies examining their positions on the continuum from traditional to virtual manufacturing. Case studies of the companies and some key financial results for a period of years are presented in order to explore implications and inform strategic decisions.

Findings

It concludes that conventional financial reporting for IC and intangibles has limited scope. This is elaborated through contrasts in a number of conventional accounting measures and some others, less conventional, to highlight the implications of the intellectual capital employed. The results are reported and implications of these discussed in the context of the companies whose background and activities are briefly outlined.

Practical implications

The measurement and management of the intangible assets and intellectual capital of organisations has been the focus of recent research in accounting and finance. This has applied to the corporate reporting of financial results involving its impact on the balance sheet, managerial accounting concerned with decisions and the internal use of various financial and non‐financial performance measures and finance where market values of companies have been shown to differ significantly from their book values as shown in published accounts.

Originality/value

The content will be of interest to academics studying issues surrounding the reporting and decision making concerning intellectual capital and intangibles. Additionally, managers and consultants whose companies are engaged in outsourcing and or virtual/semi‐virtual manufacturing should find the results informative.

Details

Journal of Intellectual Capital, vol. 6 no. 3
Type: Research Article
ISSN: 1469-1930

Keywords

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Article
Publication date: 1 May 2002

Mike Tayles, Andrew Bramley, Neil Adshead and Janet Farr

Given the considerable increase in knowledge‐based and technology driven companies, the accounting profession has been wrestling with the valuation of intangibles and…

Abstract

Given the considerable increase in knowledge‐based and technology driven companies, the accounting profession has been wrestling with the valuation of intangibles and particularly intellectual capital. This paper is based on our interaction, as a multi‐disciplined team, with service businesses and their concern to make visible and hence manageable the value of the intellectual capital of their employees and infrastructure. It is observed that valuation should not be left to the market but that internally the role of strategic management accounting can inform valuation, support decisions and promote competitive advantage. This could be undertaken by reference to strategically driven and formally established performance measures which are incorporated into a proposed valuation model.

Details

Accounting, Auditing & Accountability Journal, vol. 15 no. 2
Type: Research Article
ISSN: 0951-3574

Keywords

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Article
Publication date: 1 March 1997

Colin Drury and Mike Tayles

Surveys of capital budgeting practices in the UK and USA reveal a trend towards the increased use of more sophisticated investment appraisals requiring the application of…

Abstract

Surveys of capital budgeting practices in the UK and USA reveal a trend towards the increased use of more sophisticated investment appraisals requiring the application of discounted cash flow (DCF) techniques. Several writers, however, have claimed that companies are underinvesting because they misapply or misinterpret DCF techniques. Such claims have been made on the basis of observations in only a few companies, or anecdotal evidence, without any supporting statistical evidence. Reports on a recent survey conducted by the authors which suggests that many UK firms are guilty of misapplying DCF techniques. Also provides evidence relating to some issues that have not been thoroughly examined in previous studies, namely the impact of company size and the relative importance that firms attach to different investment appraisal techniques.

Details

Management Decision, vol. 35 no. 2
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 10 October 2016

Mirna Jabbour and Magdy Abdel-Kader

This paper aims to investigate various institutional pressures driving the adoption and implementation of a new risk management system; enterprise risk management (ERM).

Abstract

Purpose

This paper aims to investigate various institutional pressures driving the adoption and implementation of a new risk management system; enterprise risk management (ERM).

Design/methodology/approach

The implementation of ERM-related practices is analysed based on an institutional framework and drawing on empirical evidence from multiple sources in ten large/medium-sized insurance companies. This paper focuses on extra-organisational pressures exerted by political, social and economic institutions on insurance companies which drove the adoption decision.

Findings

It was found that different change agents have taken part in the decision to introduce new risk management system as a part of ERM implementation process. Further, the institutional pressures, coercive, mimetic and normative, were found to differ in character and strength over different intervals of time in relation to the adoption of ERM. Companies that adopted ERM early were mostly driven by internal strategic drivers, whereas the recent adoption decision was more driven by coercive and mimetic pressures. Thus, evidence of divergence between insurance companies was found.

Research limitations/implications

The findings have implications for policy makers, regulatory agencies and innovation developers. ERM was considered not only as a necessity but also as a value added to the insurance companies under study. Thus, regulators and innovation developers should survey main players in any specific organisational field to understand their views before issuing new compulsory regulations or developing innovations. They also need to consider exploring companies’ experiences with ERM, which can provide a basis for the development of strengthened and more informative regulatory ERM frameworks. This will support a faster and easier understanding and implementation of ERM framework hindered by the confusions companies may face when considering the complicated/changing regulatory and risk requirements.

Originality/value

This study extends the scope of institutional analysis to the risk management field, particularly ERM and to the explanation of how different institutions affect the decision to move towards ERM and modify the risk management rules applied within the organisational environment. It looks not only at convergences but also divergences associated with the period of time when ERM adoption decision was made. Thus, it develops a processual view of change.

Details

Qualitative Research in Accounting & Management, vol. 13 no. 4
Type: Research Article
ISSN: 1176-6093

Keywords

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Article
Publication date: 25 September 2007

Fadi Kattan, Richard Pike and Mike Tayles

This paper seeks to concern itself with the determination of the effect that external factors have on the design and implementation of management accounting systems in a…

Abstract

Purpose

This paper seeks to concern itself with the determination of the effect that external factors have on the design and implementation of management accounting systems in a developing economy which has in the last decade experienced fluctuating levels of environmental uncertainty.

Design/methodology/approach

This is explained through the use of a case study involving interviews and archival data in a company over a ten‐year period, a period involving considerable environmental change. It explores, how the organisation responded to the changes experienced over that time and the extent to which this impacted management accounting.

Findings

The study finds that the management accounting and control systems used are more mechanistic in times of environmental and political stability, but become more organic in periods of greater uncertainty.

Research limitations/implications

The challenge of relying for this research on respondents' recall of events occurring some years previously is acknowledged and steps taken to minimise this are identified. The results of any case study research are not widely generalisable beyond the context in which it is studied.

Practical implications

This study offers insights into management accounting and control systems as they are implemented in an underdeveloped country where uncertainty stems from political fluctuations.

Originality/value

This research sees environmental uncertainty stemming from changes in the political structure and this precipitates changes in markets and their structures. Companies operating in those markets are influenced by and need to react to such changes.

Details

Journal of Accounting & Organizational Change, vol. 3 no. 3
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 25 September 2007

Chandana Alawattage, Trevor Hopper and Danture Wickramasinghe

This paper seeks to introduce, summarise, and reflect on the key themes and findings raised by the seven papers selected for this special issue devoted to management…

Abstract

Purpose

This paper seeks to introduce, summarise, and reflect on the key themes and findings raised by the seven papers selected for this special issue devoted to management accounting in less developed countries (LDCs).

Design/methodology/approach

The conclusions are drawn from desk research generally and the articles contained in this collection.

Findings

This paper finds that accounting research in LDCs needs to address issues of poverty reduction, corruption, community involvement, history, culture, and politics, and examine a wider spectrum of organisations ranging from households to non‐governmental organisations.

Practical implications

Effective management accounting in LDCs may require broader, simpler, open and transparent, sometimes informal systems developed locally.

Originality/value

This paper presents a collection of mainly empirical papers on an important but neglected topic, namely how management accounting might aid economic development in poor countries.

Details

Journal of Accounting & Organizational Change, vol. 3 no. 3
Type: Research Article
ISSN: 1832-5912

Keywords

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