Contingent Factors Affecting the Financial Performance of Manufacturing Companies: The Case of East Java, Indonesia

Abstract

Manuscript type: Research paper. Research aims: This study aims to examine how contextual variables which include innovation strategy, management accounting information system and internal business process performance affect the financial performance of manufacturing companies in East Java, Indonesia. Design/ Methodology/ Approach: This study employs a quantitative approach to explain the relationship among the variables. The data of 135 managers were collected and then analysed through the partial least squares (PLS) approach. Research findings: Results show that management accounting information system and business process performance partially mediate the innovation strategy-financial performance relationship. Theoretical contributions/ Originality: This study expands on previous works by investigating the roles of management accounting information system and internal business process performance as mediating variables between innovation strategy and firm's financial performance. Practitioner/ Policy implications: This study provides insights into how management accounting information system and internal business process performance impact innovation strategy and financial performance. The results imply that managers need to improve the design and implementation of their accounting system and their internal business process performance. This initiative can support

Management accounting systems: an organizational competitive performance perspective

“…to assess the characteristics of other information systems (Pondeville, Swaen and De Rongé, 2013;Esparza-Aguilar, García-Pérez-De-Lema and Duréndez, 2016;Gunarathne and Lee, 2019). However, over the last twenty years, only a few authors have decided to use the four dimensions (e.g., Bouwens and Abernethy, 2000;Naranjo-Gil, 2009;Velez et al, 2015;Ghasemi et al, 2016;Hariyati and Tjahjadi, 2018).…”

“…This process includes all aspects of the management cycle of a business organization (Agbejule, 2011). Throughout the literature review, several studies which evaluated different types of performance were found, including the following performance dimensions: production performance (Choe, 2004); financial performance (Jansen, Van den Bosch and Volberda, 2006;Macinati and Anessi-Pessina, 2014;Hariyati and Tjahjadi, 2018;Hariyati, Tjahjadi and Soewarno, 2019); departmental performance (Williams and Seaman, 2002); the nonfinancial performance of the production (Abdel-Maksoud, 2004; Abdel-Maksoud et al, 2010); managers' performance (Chong, 2004;Agbejule, 2005;Sharma, Jones and Ratnatunga, 2006;Hall, 2008;Soobaroyen and Poorundersing, 2008;Hammad, Jusoh and Ghozali, 2013;Ghasemi et al, 2016Ghasemi et al, , 2019Nguyen et al, 2017); global performance (Esparza-Aguilar, García-Pérez-De-Lema and Duréndez, 2016); and organizational performance (Mendoza and Bescos, 2001;Ambe and Sartorius, 2002;Guilding, 2008, 2012;Krumwiede, Suessmair and MacDonald, 2008;Cleary, 2009;Tontiset and Ussahawanitchakit, 2010;Agbejule, 2011;Tsamenyi, Sahadev and Qiao, 2011;Tuanmat and Smith, 2011;Hoque, 2011;Ismail, Isa and Mia, 2018). In this context, the following hypotheses are presented:…”

Is more really better? Performance measure variety and environmental uncertainty

“…Furthermore, this paper examines whether this uncertainty affects management satisfaction with the performance measurement system and if it impacts firm performance. The research adds to the knowledge generated by other studies (Hariyati et al , 2019; Hariyati and Tjahjadi, 2018; Chenhall, 2003; Chenhall and Langfield-Smith, 2007; Gosselin, 2005; Hoque, 2004) and offers a view on the use of performance measures in both large and small firms (Pekkola et al , 2016) and in both service and non-service firms. This topic has been explored in production firms (see, e.g.…”

Innovation, Process Capital and Financial Performance: Mediating Role of Marketing Performance (Evidence From Manufacturing Industry in Indonesia)

“…There are inconsistencies in the previous studies (Hariyati & Tjahjadi, 2018;Rajapathirana & Hui, 2018;Darroch, 2005;Gunday et al, 2011) and this research gap motivates us to conduct further research on the subject matter. This study introduces a variable that theoretically mediates the effect of innovation on financial performance as well as the effect of process capital on financial performance.…”