Contingency factors influencing management accounting system design of manufacturing companies in Malaysia
This study examines the effect of decentralization, the adoption of advanced manufacturing technology and market competition on the adoption of sophisticated management accounting system (MAS) design and in turn, the effect of MAS design on firm performance. Subsequently, this thesis also exam...
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| Main Author: | |
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| Format: | Thesis |
| Language: | English |
| Published: |
2015
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| Online Access: | http://psasir.upm.edu.my/id/eprint/65958/1/GSM%202015%205%20UPM%20IR.pdf http://psasir.upm.edu.my/id/eprint/65958/ |
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| Summary: | This study examines the effect of decentralization, the adoption of advanced
manufacturing technology and market competition on the adoption of sophisticated
management accounting system (MAS) design and in turn, the effect of MAS design
on firm performance. Subsequently, this thesis also examines the mediating effect of
MAS design on the relationship between decentralization, the adoption of advanced
manufacturing technology and market competition with firm performance. It follows
the contingency theory to propose that decentralization causes firms to adopt
sophisticated MAS design in order to ensure that controls at all levels are exerted and
to ensure that relevant information are provided while the adoption of advanced
manufacturing technology encourages the adoption of sophisticated MAS design in
order to obtain more accurate cost data and market competition encourages the
adoption sophisticated MAS design in order to assist firms to cope with both local and
international competition. Thus, this research proposes a positive relationship between
the three independent variables known as decentralization, the adoption of advanced
manufacturing technology and market competition on MAS design and subsequently a
positive relationship between MAS design and firm performance. MAS design is also
proposed to be a mediator in the relationship between the three independent variables
and firm performance.
Using survey data from 137 manufacturing companies and regression analysis, the
result shows a significant and positive relationship between the adoption of advanced
manufacturing technology and market competition with MAS design and in the
relationship between MAS design and firm performance. This suggests that the
adoption of sophisticated MAS design is able to assist firms to cope with the changes
in the manufacturing technology and assist firms to cope with the intensity of the
market competition in Malaysia. However, a positive but insignificant relationship was
observed in the relationship between decentralization and MAS design and MAS
design was not found to be a mediator in any of the relationships above. These results
have contributed to the management accounting change literature by providing
empirical evidence that the adoption of advanced manufacturing technology and market competition affects the MAS design of a firm and subsequently affects the
firm's performance in the context of manufacturing firms in Malaysia. |
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