A Nexus among Strategy Type, Market Orientation, Strategic Costing and Financial Sector Performance of Private Universities in Indonesia

Abstract

This study aims to find empirical evidence of causal relationship between strategy type, market orientation, strategic management accounting (SMA) strategic costing technique, and financial sector performance of private universities in Indonesia. The research object in this study are private universities in Yogyakarta, Indonesia. Yogyakarta is chosen because universities there are one of the barometers of higher education in Indonesia, and the city has quite a number of universities. The respondents in this study are the leader (manager) of private universities in Yogyakarta, Indonesia. The data analysis is done using SEM-PLS with WarpPLS 3.0 software. The results of this study show that market orientation has significant influence on the development and implementation of SMA strategic costing technique, while strategy type does not have significant influence on the development and implementation of SMA strategic costing technique. This study also finds that the implementation of SMA strategic costing technique significantly influences the financial sector performance of private universities in Yogyakarta, Indonesia. This study provides theoretical implication regarding SMA development in universities that consider that contingency factors (market orientation) can encourage increased organizational performance. It indicates support for contingency theory that states there are no general principles that apply to all situations.

Determinants of strategic management accounting implementation in Higher Education Institutions (HEIs) in Indonesia

“…In other words, organizational strategy is a contingency factor in SMA development (Langfield-Smith, 2006). It is also consistent with Sriyono's (2020) study results, stating that the type of strategy influenced the development of design and structure within the organization, including the development of SMA. Also, HEIs that implement a cost leadership strategy tend to have a higher intensity of implementing SMA (Chenhall, 2003;Alsharari et al, 2015;Marlina & Tjahjadi, 2021), so the hypothesis was determined as follows:…”

“…According to Sriyono (2020), HEIs with market orientation encompassing customer understanding, organizational understanding of strengths, weaknesses, capabilities, and competitor strategies, as well as coordination between functions in the use of resources, are essential things that need to be considered in making strategic organizational policies to excel in organizational competition. In this regard, SMA is a strategically oriented accounting information technique that considers internal and external aspects in achieving the organization's vision and mission.…”

“…First, market orientation is a principal factor influencing SMA's implementation in HEIs. Market-oriented HEIs provide more comprehensive information about situations and conditions, both internally and externally, so that management can use it in strategic decision-making (Sriyono, 2020). Thus, market orientation forces the HEIs to present information related to external parties, namely market conditions to encourage the implementation of SMA.…”

“…Kalkhouran et al (2015), Alamri (2018), andTuanmat andSmith (2011) studied information technology having a positive effect on SMA implementation. Meanwhile, research on the implementation of SMA in HEIs, among others by Sriyono (2020) and Marlina and Tjahjadi (2021), inspected the influence of higher education strategies on SMA implementation. Furthermore, Hutaibat et al (2011) scrutinized the effect of SMA implementation on HEI performance.…”

Firm Focus, Market Orientation and Firm Performance within the Health Insurance Industry

“…Several studies have been conducted in respect of market orientation emphasis on product innovation, sustainable competitive advantage and strategy (Bamfo & Kraa, 2019;Na, Kang, & Jeong, 2019) whilst others have studied firm focus, creativity, organizational learning (Ismail, Narsa, & Basuki, 2019). Despite the numerous numbers of studies on market orientation and strategic impact, little is known within the private health insurance sector (Gentry, Dibrell, & Kim, 2016;Keskin, 2006;Jogaratnam, 2017;Najafi-Tavani, Sharifi, & Najafi-Tavani, 2016;Sriyono, 2020). The critical factors responsible for lack of long-term focus of firms is lack of market orientation (Asad, Sharif, & Hafeez, 2016) and its dimensions including customer, competitor orientations and interfunctional coordination (Asad et al, 2020).…”