Cost‐system functionality and the performance of the Malaysian palm oil industry

Abstract

Purpose: The purpose of this paper is to investigate the relationship between cost-system functionality and the performance of oil-palm enterprises in Malaysia, as well as whether manager's perceived usefulness of cost information mediates the cost-system functionalityperformance relationship. Design/methodology/approach: A structured questionnaire is used to gather data from oilpalm enterprises located in Sarawak. Findings: The results indicate that the cost relevance/timeliness dimension of cost-system functionality significantly enhances the performance of oil-palm enterprises. However, manager's perceived usefulness of cost information only partially mediates the cost-system functionality-non-financial performance relationship, and this is possibly due to the nature of control over the estate operations by the head office. Research limitations/implications: Owing to the small-sample size and because the oil-palm enterprises are located only in Sarawak, the generalisability of the results may be limited. Besides, the findings are based on the estate setting whereby decisions made are relatively structured and therefore, they may not apply in less-structured decision-making settings. Originality/value: Past findings on the causal link between cost-system functionality and performance are mixed. However, high-functional cost systems are expected to be more cost beneficial when environment is highly uncertain. The palm oil industry operates in a highly turbulent economic environment due to serious external challenges and it is expected to benefit from high-functional cost systems. Unlike previous studies based on firms from diverse industries, the operational homogeneity of the oil-palm enterprises in this paper enables the effects of cost-system functionality on performance to be examined in a more controlled setting. By analyzing the attributes of cost-system functionality into two major dimensions, this paper shows that performance could be enhanced only through provision of relevant and timely cost information.

Factors Affecting the Use of Costing Systems toward Managerial Performancein Vietnamese Public Hospitals

“…Plainly, according to the technology acceptance model, the perceived usefulness is an important driver of system use (Davis, 1989). Given the positive association between perceived system usefulness and system use that is well-recognized in the information system literature (Foong & Anak Teruki, 2009), this study posits the following:…”

Development of palm oil sector and future challenge in Riau Province, Indonesia

“…Several previous studies were used as references in this research separately, such as Palm oil by Ang and Gan (2012), Ataei et al (2012), Nik et al (2007), Nikoloyuk et al (2010); Sustainable plantation by Foong and Teruki (2009), Nunn and Kumar (2017), Poole and Donovan (2014); Smallholder by Mwambi et al (2016), Poole and Donovan (2014), Rosairo and Potts (2016), Policy by Diem and Young (2015), Paton and Dodge (1995), Jaiani and Whitford (2011); Riau by Raihani (2008), Sasmita and Suki (2015), Setiawan and Akbar (2017). The originality for this paper shows the Development of Palm Oil Sector and Future Challenge in Riau Province, Indonesia.…”

The potential of environmental impact as a result of the development of palm oil plantation

“…Shen and Miao (2015), Yang et al (2016), Butler and Bright (2010), Pati and Negi (2016), Tucker and Parker (2013), Piercy et al (2002), Zhu et al (2017), Paccioni et al (2008), Qi et al (2017) and Elmualim (2006) discuss control strategies. While the potential of environmental impact is conducted by Ajayi et al (2016), Shuhong and Mianyun (2009), Rebelato, Saran, Cury and Rodrigues (2017); Pubule et al (2012), Foster et al (2000), Drizo and Pegna (2006), Goosey (2000), Curran (2012), Rebelato, Saran, Paulino and Rodrigues (2017), Hanna et al (2000), Abdullah et al (2017), Saifullah et al (2018), Tan et al (2011), Foong and Teruki (2009), Onuorah et al (2015), Omorogbe et al (2013), Nordin et al (2004), Seth et al (2008), Nikoloyuk et al (2010) and Tan and Ndubisi (2014) discuss about oil palm plantations. This study combines these three with the aim of knowing the environmental impacts as a result of the development of oil palm plantations.…”