Explaining Management Accounting Innovation: The Effects of Strategy, Historical Performance and CFO Characteristics


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Abstract

Although innovative management accounting techniques such as ABC and the Balanced Scorecard have received much academic interest in recent years, our understanding of why some organizations adopt and implement such new management accounting systems (MAS) and others do not, is still underdeveloped. Relying on the general management literature, we examine the role of three factors that may affect the adoption of new techniques. These factors are strategy, the organization’s historical performance record and the characteristics of the organization’s CFO. We predict that organizations are more likely to adopt MAS innovations if they pursue a prospector strategy, and as response to declining results. Regarding CFO’s, we expect that MAS innovation depends on demographic characteristics (age, tenure and background) of the highest management accounting official. We furthermore expect that the effects of historical performance and strategy are moderated by CFO characteristics. We test our hypotheses using archival and survey data from the 218 public hospitals in Spain. Our results are generally supportive of our hypotheses.
 
Contact information:
Paolo Perego
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