Management Accounting Section Midyear Meeting

Management Accounting and Marketing Capabilities of Firms—The Role of Competition

• In Event: Firm Behavior

Abstract

This paper examines the relationship between marketing and management accounting capabilities in firms, and how this relationship is influenced by the level of competition in the environment. Drawing on literature about the marketing and management accounting interface, we argue that, especially in competitive environments, marketing and management accounting capabilities can be considered as complementary organizational design elements, as one capability is able to limit the potential dysfunctional effects of the other capability and vice versa. For example, while marketing capabilities make it possible for a firm to increase sales, management accounting capabilities constrain sales growth when it is not profitable and provide guidance for profitable growth. Using survey and archival data from marketing and management accounting managers from 313 German firms, we find that marketing and management accounting capabilities are complements and that the complementary relationship is stronger at a higher level of competition intensity. We further show that the likelihood of having both capabilities at high levels increases with the intensity of competition. Several robustness checks corroborate our findings. Overall, these results add to the developing literature on the interplay between marketing and management accounting in organizations.

Authors

• Timur Pasch, Utrecht University (Netherlands)

• Paula Van Veen-Dirks, University of Groningen

• Frank Verbeeten, University of Amsterdam