Relevance lost: Do management accounting innovations meet the requirements of operations management?

• In Event: Management Accounting

Abstract

Innovations in operations management (OM) have questioned the relevance of traditional management accounting (MA) practices during the past three decades. This has motivated serious calls for re-examining the relevance of adopted managerial techniques and encouraged the introduction of several relatively new management accounting techniques in the Western societies at the same time. However, recent studies show that many organisations in the Western societies are less satisfied with the adoption of new management accounting techniques, but such information is scarce in relation to organisations in non-Western societies (especially Middle East). This situation raises some important questions as follows: Whether new management accounting innovations (same as traditional management accounting techniques) have lost their relevance? Whether the diffusion of new management accounting innovations in non-Western societies is facing similar challenge/s (as in Western societies)? And whether the level of organisational satisfactions with implemented management accounting techniques in Western and non-Western societies are the same? Answering the above questions, this study investigates and compares the diffusion of six most popular management accounting innovations: activity-based costing, activity-based management, balanced scorecard, benchmarking, target costing and strategic management accounting in two Western and non-Western countries (New Zealand and the Sultanate of Oman respectively). The findings of our exploratory study suggest that organisations are not very happy with the performance of so called new management accounting innovations and maybe there is a need to examine their relevance to the current ever changing environment.

Author

• Davood Askarany, The University of Auckland