The association between CEO work, management accounting information, and financial performance: evidence from Finnish top managers

Abstract

The objective of this study is to analyze the association between CEO work, importance of management accounting information (MAI), and financial performance of the firm. The research model is based on nine hypotheses on the association of CEO work with traditional dimensions of managerial tasks (time span, process stage, and functional area), importance of MAI, and financial performance. We assume that CEO work is directly associated with the importance of MAI, but also indirectly mediated by traditional task dimensions. It is also assumed that CEO work is associated with financial performance directly, but also indirectly mediated by the importance of MAI. The research model was tested by the partial least squares method using survey data from 215 Finnish top managers (CEOs) from firms of different industry and size classes. CEO work was captured in Mintzberg's (The nature of managerial work. New York: Harper & Row, 1973) classic ten work roles, measured by the importance of 20 tasks. The importance of MAI was reflected by the importance of both the scope and the perspective of MAI. Financial performance was measured by traditional financial ratios. The results generally show that the CEO work latent variable ("information-user CEO", IUC) is strongly associated with the importance of MAI. It is also strongly associated with traditional dimensions of managerial tasks. However, these dimensions do not intermediate this association further to the importance of MAI. This importance has only a weak direct association with financial performance that is negatively associated with IUC work.

Upper echelon characteristics and the use of management control systems: an integrative review

“…Another approach given to investigations of behavioral characteristics is the role of what organizations expect from managers (the management style put on work functionsinterpersonal, informational, and decisional). Such information can help associating certain types of management with the use of MCS (Laitinen, 2014).…”

“…The characteristics of the managerial role played specifically by the CEO is also one of the factors associated with the use of MCS because information is a key element of a manager's work, consuming more than half of their daily activities on average. The complexities of the management role affect how managers choose, project, and use information (Laitinen, 2014). can see the use of managerial controls in a diagnostic and interactive way (Laitinen, 2014).…”

“…The complexities of the management role affect how managers choose, project, and use information (Laitinen, 2014). can see the use of managerial controls in a diagnostic and interactive way (Laitinen, 2014).…”

Leadership and Decision Making among SMEs: Management Accounting Information and the Moderating Role of Cloud Computing

“…MAI provides the information to an organization's various departments, spanning from decision-making to organizational learning. MAI is the basic source of information for an organization's planning, decision-making, and monitoring (Ahmad, 2012;Laitinen, 2014). Bakar (2018) and Hui and Yusof (2010) reported that it is helpful and vital to managers in assisting their decision-making, performance appraisal, and communication with their colleagues.…”

Usefulness of Management Accounting Information in Decision Making Among SMEs: The Moderating Role of Cloud Computing

“…MAI provides information for various purposes spanning from decision-making to as a means of organisational learning. MAI is the basic source of information for an organization's planning, decision-making and monitoring (Ahmad, 2012;Laitinen, 2014). Abu Bakar (2001), and Hui and Yusof (2010) reported that it is helpful and vital to managers in assisting their decision-making, performance appraisal and communication.…”