There has been sustained interest in explaining why firms adopt different management accounting practices. This paper applies contingency theory to respond empirically to calls by Gerdin (2005), Tillema (2005) and Chenhall (2007) to increase understanding of factors that explain management accounting sophistication.

Acknowledgement:The authors would like to thank the two anonymous reviewers and participants at the EIASM conference on new directions in management accounting: innovations in practice and research (Brussels December 2002) for their valuable comments on earlier drafts of this paper. Financial support from the Chartered Institute of Management Accountants is acknowledged with gratitude. ABSTRACTPurpose -This paper investigates and reports on the management accounting practices in the British food and drinks industry.Design/methodology/approach -The data is generated by a large-scale postal questionnaire which was informed by preliminary interviews. Further interviews were carried out to aid interpretation of the responses. Descriptive statistics on the importance and frequency of use of individual practices provide the basis for discussion.Findings -Direct costing is widely practised and important, by contrast with activity-based costing and full absorption costing. Despite the limitations of conventional budgets, they remain a central management accounting 'pillar' and are frequently used in 'what if?' analyses. The balanced scorecard and other non-financial performance measures are perceived to be important but never or rarely used by 40% of companies. Product profitability analyses are frequently applied, and, surprisingly, the profitability of supplying individual customers is frequently calculated by over 50% of the population. Respondents were sceptical about sophisticated DCF investment appraisals.Practical implications -Traditional management accounting is 'alive and well' but there are indications of likely increased use of: information concerning the cost of quality; nonfinancial measures relating to employees and analyses of competitors' strengths and weaknesses. There is evidence of a gap between current textbooks and actual practices.Originality/value -The survey provides a unique detailed examination of actual management accounting practices and an indication of future trends.

Purpose – The purpose of this paper is to develop a theoretical framework that explains how performance management (PM) affects the organisational effectiveness in the third sector. Design/methodology/approach – The authors adopt a two stage process in developing the theoretical framework; a systematic review of literature and theoretical developments of the framework. The underlying principles for developing the theoretical framework are mainly based on prior theoretical justification and empirical research in management accounting and international development fields. Findings – Drawing upon contingency theory, the authors propose a theoretical framework explaining how the contingency variables affect PM and organisational effectiveness in the third sector. The authors discuss the justification for contingency theory as well as its weaknesses in the PM research. The authors also highlight how a modified Performance Management and Control Framework could be used to identify PM practices in the third sector. The organisational effectiveness can be measured using the four domains the authors suggest in this paper. Finally the authors put forward propositions that can be empirically tested in future studies. Research limitations/implications – This conceptual paper opens an opportunity for future empirical research to cross-validate the model in a large survey through confirmatory factor analysis and structural equation modelling. Practical implications – This paper helps researchers and practitioners to understand how modern PM tools integrate with third sector characteristics to optimise the effectiveness of individual organisations. Originality/value – Integrating insights across disciplines, this paper strengthens cumulative knowledge on conceptualisation of PM and effectiveness within the third sector.

In this paper, a model for the evaluation of investments in advanced manufacturing technology is developed. Many authors have called for an integration of financial and non-financial factors in such evaluations, and this paper demonstrates that it is conceptually possible to do this using the mathematics of the analytic hierarchy process and fuzzy set theory. The development of the model has certain distinguishing features. First, it is based on a conceptual framework that combines the three dimensions of risk, financial return and non-financial factors. The empirical basis for this has been investigated and previously reported by the authors. Second, models previously developed and reported in the literature are shown to suffer from certain flaws relating to the use of linguistic scales, the ranking of fuzzy performance indicators and partiality in the treatment of investment decision variables. These issues are addressed through the development of simpler linguistic scales based on the analytic hierarchy, a revised procedure for ranking fuzzy numbers and an attempt to build a comprehensive model through the three dimensions described above. Triangular fuzzy numbers are used throughout in order to make the mathematics tractable and relatively easy to understand, and to facilitate presentation of a worked example. However, so that the reader is not misled, attention is drawn to some of the complexities in fuzzy arithmetic, especially the important distinction between subtraction/division and deconvolution of fuzzy numbers.

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This paper reports the results of a survey investigation into the investment decision making practices of large UK manufacturing companies, especially in relation to investments in advanced manufacturing technologies. A 24% response rate was received in a survey of the finance directors of 466 large UK manufacturing companies. Responses were classified into three groups ranging from non-users of AMT to sophisticated users and analysis revealed that more sophisticated users do emphasise certain intangible benefits in combination with measures relating to the traditional dimensions of return and risk.

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