Strategic management accounting and sense-making in a multinational company

Abstract

This paper investigates strategic management accounting in a large multinational company in Germany. Much of the prior research in SMA has concentrated on which accounting techniques are used and in what circumstances. This paper is more concerned with how SMA is perceived and used in practice. The principal research findings relate to the core phenomenon of sense-making. The paper explores just what is meant by sense-making and how management accounting is used to assist the process. A substantive grounded theory of strategic management accounting and sense-making is developed. Sense-making is a basic social process that revolves around organisational actors' attempts to understand their past, present and future situations. Management accountants consciously and unconsciously undertake 'sense-making' activities through the strategies of structuring and harmonising; bridging and contextualising and compromising and balancing. Sense-making is also carried out within both external and internal contexts. In addition, the intervening conditions that have an impact on the sense-making activities were 'sets of information', 'professional know-how' and 'a feel for the game'. Two sets of consequences of sense-making were discovered; consequences for making strategy and consequences for management accountants. All these phenomena and their interrelationships are discussed in the paper and a nascent formal theory of SMA is proposed by discussing the substantive theory in relation to broader theoretical frameworks.

What Are the Top Variables Leading to Strategic Investment Decision Making Performance

“…For example, much strategic management accounting (SMA) research on SID making has been centred on the nature of the SID which is dominated by discussions on financial versus strategic technique usage [1]. In addition, much research on management accounting still focuses on the use and perception of management accounting techniques [2]. Case study research on the use of SMA techniques [3] are University of too often descriptive, use too little cases and hardly link the results to a sound theoretical framework.…”

“…Case study research on the use of SMA techniques [3] are University of too often descriptive, use too little cases and hardly link the results to a sound theoretical framework. Though there is often suggested templates focusing on SMA techniques for use in corporations, however the actual use of these templates in practical decision making leading to high performance is often neglected [2]. Thus, as much literature focuses on the use of accounting techniques, normative SMA research often have been criticised for being far from reality [2].…”

“…Though there is often suggested templates focusing on SMA techniques for use in corporations, however the actual use of these templates in practical decision making leading to high performance is often neglected [2]. Thus, as much literature focuses on the use of accounting techniques, normative SMA research often have been criticised for being far from reality [2]. Next, we look at non-SMA research on successful SID making.…”

Strategic Management Accounting Practices among Indigenous Nigerian Manufacturing Enterprises

“…The SMAP is a set of accounting tools that provide accurate and timely information to various aspects of an enterprise's decision making needs, including strategic costing, target costing, competitors accounting, consumer accounting, strategic decision, planning, control and performance management, and evaluation (Alsoboa, Nawaiseh, Karaki & Khattab, 2015). Tillman and Goddard (2008) in their study described SMA as the use of management accounting systems in evaluating strategic decision-making. MA techniques, among others, are activity based costing, attribute costing, brand value budgeting, benchmarking, competitive position monitoring, competitor cost assessment, environmental management accounting, life cycle costing, quality costing, strategic costing, target costing, kaizen costing, value chain costing, strategic pricing, and customer accounting (Cinquini & Tenucci, 2010;Ramljak & Rogosic, 2012).…”

“…Consequently, researches had always being concerned with the use of accounting techniques and how it is linked with SMA over the years (Tillman & Goddard, 2008;Puolamäki, 2004;Guilding, 2000). In one of these researches, Guilding et al (2000) identified twelve (12) SMAP.…”