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Purpose Drawing on the natural resource-based view (NRBV) of the firm, this study aims to investigate the mediating role of sustainability performance management (SPM) practices in the relationship between corporate sustainability strategy (SS) and sustainability performance (SP). The conceptualization of SS and SPM practices follow the NRBV resources and capabilities to promote sustainability for competitiveness. Design/methodology/approach Data for the study were collected through a questionnaire from 114 small-medium to large organizations within environmentally sensitive industries operating in Malaysia. Findings The results indicate the indirect relationship between SS and SP through SPM practices. The results suggest that SS can only be realized through a broader management accounting control system (such as SPM practices) that provides information to generate, analyze and control environmental, social, economic and governance performance. Practical implications As some organizations may face their resource constraints, this study may help managers and management accountants prioritize their focus on SS and adopt the necessary SPM practices to enhance their SP. Originality/value This study sheds new light on the role of the SPM practices adopted by firms to manage their SS.

Although an accumulating body of research has yielded a wealth of insights on corporate social responsibility (CSR) and its impact on corporate performance, little is known about the role of management accounting and control systems in general, and performance measurement systems in particular, in translating CSR into enhanced performance. As such, this study set out to gain further understanding of this phenomenon by proposing a model in which the use of sustainability performance measurement mediates the relationship between CSR and organizational performance. Based on survey data from a sample of 98 Iranian public listed companies, the results show that CSR positively affects the usage of sustainability performance measurement and organizational performance. More importantly, the findings provide evidence that sustainability performance measurement plays an intervening role between CSR and organizational performance. This study contributes to the sustainability accounting literature in general and sustainability management control in particular by synthesizing stakeholder theory and the fit-as-mediation notion to show that sustainability performance measurement is the mechanism through which CSR affects organizational performance.

Purpose The role of big data and data analytics in the audit engagement process is evident. Notwithstanding, understanding how big data influences cognitive processes and, consequently, on the auditors’ judgment decision-making process is limited. The purpose of this paper is to present a conceptual framework on the cognitive process that may influence auditors’ judgment decision-making in the big data environment. The proposed framework predicts the relationships among data visualization integration, data processing modes, task complexity and auditors’ judgment decision-making. Design/methodology/approach The methodology to accomplish the conceptual framework is based on a thorough literature review that consists of theoretical discussions and comparative studies of other authors’ works and thinking. It also involves summarizing and interpreting previous contributions subjectively and narratively and extending the work in some fashion. Based on this approach, this paper formulates four propositions about data visualization integration, data processing modes, task complexity and auditors’ judgment decision-making. The proposed framework was built from cognitive theory addressing how auditors process data into useful information to make judgment decision-making. Findings The proposed framework expects that the cognitive process of data visualization integration and intuitive data processing mode will improve auditors’ judgment decision-making. This paper also contends that task complexity may influence the cognitive process of data visualization integration and processing modes because of the voluminous nature of data and the complexity of business processes. Hence, it is also expected that the relationships between data visualization integration and audit judgment decision-making and between processing mode and audit judgment decision-making will be moderated by task complexity. Research limitations/implications There is a dearth of studies examining how big data and big data analytics affect auditors’ cognitive processes in making decisions. This paper will help researchers and auditors understand the behavioral consequences of data visualization integration and data processing mode in making judgment decision-making, given a certain level of task complexity. Originality/value With the advent of big data and the evolution of innovative audit procedures, the constructed framework can be used as a theoretical foundation for future empirical studies concerning auditors’ judgment decision-making. It highlights the potential of big data to transform the nature and practice of accounting and auditing.

This study used contingency theory to examine the key enablers of target cost management (TCM) at the Malaysian context. Using a single case study approach, a questionnaire survey was conducted on users of TCM at Company A, a Malaysian automotive company. The respondents were required to determine whether enablers, namely, an advanced manufacturing technology (AMT) implementation, confrontational strategy, customer orientation, an information-sharing network, lean manufacturing implementation, supplier relationships, teamwork oriented organizational culture, top management support and commitment, and training havepositive relationships with the successful implementation of TCM. The findings show that only teamwork, top management support and commitment, and training are the key enablers for the successful implementation of TCM in the case company.

This study explored the relationship between the information system (IS) capability with the alignment of IS strategy and social capital and the relationship between the alignment of IS strategy and social capital with business performance. Moreover, this study also aimed to investigate the mediating role of the alignment of IS strategy and social capital in the relationship between IS capability and business performance. A cross-sectional field study (i.e. questionnaire survey) was conducted on 179 national scale bank branches across Indonesia. Partial least square (PLS) is utilized to test all of the research hypotheses. The result of the study showed that there are significant relationships between IS capability with the alignment of IS strategy and social capital and significant relationships between the alignment of IS strategy and social capital with business performance. Besides, this study also proved that the alignment of IS strategy with social capital has a significant role in mediating the relationship between IS Capability and Business Performance. This study contributes to the theory development by analyzing the research gap from the previous researchers considering social capital as the strategic factor in the relationship between IS capability and business performance. The findings of this study can provide a reference for companies (i.e. board of directors) in determining investment and information system use policy.

Purpose Drawing from dynamic capability theory, this paper aims to examine the implementation of target cost management (TCM) in a non-Japanese environment. Design/methodology/approach Based on a case study at Company ABC, an automotive manufacturer in Malaysia, this paper investigates the differences in the TCM implementation process between Company ABC and companies operating in the Japanese business environment. The data were collected through in-depth interviews, direct observation and document reviews. Findings Using a single-case study approach, the findings show that although the case company follows similar fundamental steps of TCM as highlighted in the literature, it has modified the detail of the TCM steps to some extent to match with the company’s resources, business processes and strategic routines. Research limitations/implications As the study used a single-case study approach on an automotive company, the results cannot be generalized in other settings. The findings give an insight into the TCM implementation in a developing country such as Malaysia. Better understanding of TCM as a business competitive tool may help to promote TCM application in other developing countries. The findings help new potential TCM companies in the same industry to mitigate and leverage the risk of failure in implementing TCM by modifying the TCM implementation process to suit their contextual environments. Originality/value This paper attempts to explain in depth the TCM implementation process in the case company and highlights how the dynamic capabilities can cause differences in TCM practices compared to those practiced in the Japanese context.

PurposeThe purpose of this paper is to empirically explore how the effect of intellectual capital (IC) on organizational performance is indirect and mediated through performance measurement (PM) systems.Design/methodology/approachData were collected from a survey of 128 chief financial officers of Iranian publicly listed companies. Hypotheses were tested using partial least squares regression, a structural modeling technique which is appropriate for highly complex predictive models.FindingsResults from the structural model indicate that, in general, companies with a higher level of IC place a premium on the balanced use of PM systems in a diagnostic and interactive style. Furthermore, the results provide some evidence that IC is indirectly associated with organizational performance through the intervening variable of the balanced use of interactive and diagnostic PM systems.Practical implicationsThis study sheds light on the issue of how senior management should use PM systems to take full advantage of intellectual assets which could lead to improved organizational performance.Originality/valueThis is the first study of its kind to synthesize a model which examines IC, PM systems, and organizational performance. Although the effect of different types of intangible assets on performance has been substantially examined in the literature, less effort has been devoted to understanding the role of PM systems in leveraging an organization’s IC.

From a resource-based view perspective, the paper provides empirical evidence on new emerging strategic management accounting (SMA), its association with organizational capabilities (market orientation, entrepreneurship, innovativeness and organizational learning) and the interlinkages among these four elements of organizational capabilities. Partial least squares (PLS) technique was used to test the contingency model. Using the mail survey data of 103 manufacturing strategic business units (SBUs) of public listed companies in Malaysia, the results found that the four organizational capabilities - market orientation, entrepreneurship, innovativeness and organizational learning - collectively give rise to positional advantage leading to enhanced firm performance. SMA techniques are found to support the internal organizational capabilities. However, SMA usage is not associated with firm performance, indicating that the mediation role of SMA usage on the relationship between organizational capabilities and firm performance is not supported. The results confirm that a firm can attain above average performance if it possesses and emphasizes the four organizational capabilities collectively and these four organizational capabilities collectively are also important to support the usage of SMA techniques which can provide useful information for improvement of internal capabilities as well as resource allocation and utilization.

The central premise of the “fit-as-mediation” view states that knowledge-related factors could determine the usage and design of specific organizational systems, such as management accounting and control systems. This could, in turn, facilitate information processing and bring about positive organizational outcomes. While the influence of knowledge-based assets on measurable performance has been examined extensively in the intellectual capital literature, little is known concerning the role of an organizational control system in fostering the management of intellectual capital as the most strategic asset for organizations. As such, this study primarily aims to explore what role a performance measurement system plays in terms of the diversity of measurement in the relationship between intellectual capital and organizational performance. We incorporate social capital into the general three-dimensional classification of intellectual capital; namely, human capital, structural capital, and relational capital, to provide a more comprehensive measure of intellectual capital. Further, we conceptualize the diversity of measurement by supplementing the original Kaplan and Norton's BSC model with a new perspective, social and environmental measures. Such integration of financial, customer, internal business process, learning, and growth, along with social and environmental measures could result in an overarching and robust conceptualization of performance measurement; a concept that was barely mentioned in previous literature. We conducted a questionnaire survey involving chief financial officers of 128 Iranian public listed companies. Using the partial least squares (PLS), we find that companies with higher levels of intellectual capital emphasize a greater diversity of performance measures. The findings also show that the diversity of measurement mediates the relationship between intellectual capital and organizational performance. This paper may offer guidance to companies concerning the competencies needed for securing positive organizational outcomes from their knowledge resources, such as intellectual capital.

Adopting the contingency theory framework, this study investigated the extent to which Malaysian public listed companies (PLCs) implement environmental management accounting (EMA) and whether the implementation varies across corporate characteristics. Five corporate characteristics, namely, environmental sensitivity of industry, company size, ownership status, Environmental Management System (EMS) adoption and the proportion of non-executive directors (NEDs), were examined. The results, derived from postal questionnaires, indicate that the extent of EMA implementation was moderate and that more emphasis was placed on environmental cost effectiveness activities. The results also imply that complying with environmental regulations is more important than incorporating EMA information into performance measurement, control and reporting. Except for ownership status, the extent of EMA implementation, however, did not vary among corporate characteristics, and thus, provides limited support to contingency theory in explaining the extent of EMA implementation among Malaysian PLCs.

The study investigates the different relationships between certain technological and environmental factors and activity-based costing (ABC) diffusion stages. Data were collected through a survey questionnaire sent to Chief Financial Officer of Iranian manufacturing companies. Based on binary logistic regression models, the results show that the relationships between the antecedent factors and ABC diffusion change depending on the diffusion stages. The overall findings suggest that factors that are significantly related to one of ABC diffusion stages (e.g., ABC adoption stage) may not relate to other ABC diffusion stages (e.g., ABC infusion stage). For instance, product diversity and analyzer strategy produce different level of effects on different ABC diffusion stages. The results also reveal that uncertainty-financial and uncertainty-industrial influence two of the ABC diffusion stages, while uncertainty-economical, overheads, and competition influence only one of the ABC diffusion stages.

Purpose– The purpose of this paper is to empirically explore intellectual capital (IC) from a multidimensional perspective and its relationship with organizational performance (OP) within Iranian public listed companies.Design/methodology/approach– Survey data from Chief Financial Officers in 128 companies within Tehran Stock Exchange were collected and analyzed using partial least squares regressions.Findings– The findings suggest that organizational culture plays a significant role in developing human capital and structural capital while trust is a major determinant of all the IC components, namely human, structural, relational, and social capital. The results also confirm that the investment in human, structural, and relational capital could potentially bring about OP improvement in Iranian public listed companies.Practical implications– A synthesis of various sub-elements of IC supports executives in detecting, capturing, and assessing the different kinds of knowledge resources which must be taken into consideration individually for maximizing OP. Such multidimensional and comprehensive conceptualization of IC would assist organizations to remedy the inefficiency in the exploitation of IC and thereby providing a robust system in order to capture and measure IC more effectively.Originality/value– This study combines literature on IC across diverse academic fields. The multidimensional conceptualization of IC with four sub-dimensions (i.e. human, structural, relational, and social capital) as well as supplementing two antecedent constructs (trust and organizational culture) offer a more systematic manner to synthesize several knowledge-based drivers toward performance which have not been addressed simultaneously in a comprehensive framework.

Target Cost Management is well known as the Japanese companies’ competitive tool. Some studies claim that it is very hard to implement it outside Japan. The purpose of this paper is to explore how the TCM is being practiced and what the major factors are that influence TCM in non-Japanese environment. By using a case study approach, this paper compares TCM practices at a Malaysian automotive manufacturer with the previous case studies of Japanese automotive manufacturers. The results found that although the fundamental concept is similar, there are differences in details processes due to the adaptation with the contextual constraints.

Based on a single case study conducted in a Malaysian chemical company (denoted as Company X), the study explores whether environmental/sustainability practices, which include Environmental Management Accounting (EMA), are implemented in the case company. Data gathered from the review of documentations and in-depth interviews with 12 personnel comprising 10 top and middle level managers from Company X, one officer each from the Department of Environment (DOE) and Department of Safety and Health (DOSH) of Malaysia. Findings show that Company X has implemented a number of environmental/sustainability practices to some extent. Among the environmental-related practices that Company X has engaged with are: waste management, environmental safety, product stewardship, supply chain and distribution, recycling, cost-reduction programmes, carbon-footprint, and life cycle assessment. Findings also reveal that despite having good environmental/sustainability practices, the commitment towards a more systematic measurement and accounting of environmental information (monetary and non-monetary) is still minimal in Company X.

Purpose – The purpose of this paper is to provide empirical evidence concerning: the relationships between decentralization, perceived environmental uncertainty, and management accounting systems (MAS) information and the relationships between MAS information and managerial performance within Egyptian hospitals. Design/methodology/approach – Data were collected using questionnaires that were sent personally to the managers or heads of departments of Egyptian hospitals. Departmental level was used as the unit of analysis. Data obtained from 200 hospital managers were analyzed using partial least squares. Findings – The study reveals that decentralization and environmental uncertainty, to some extent, are essential factors in designing efficient and effective MAS. Hospitals with decentralized structure make better use of timely, aggregated and integrated MAS information. Environment in which the hospitals operate does have significant influence on the type of information provided by the MAS. Research limitations/implications – Using personally administered questionnaires causes the sample to be rather limited and not comprehensive enough. Practical implications – The current study offers the hospital managers some useful aspects related to the function of MAS information that can be used to enhance their managerial performance. The provision of broad-scope and timeliness of MAS information can facilitate more effective managerial decisions. MAS designers and Egyptian policy makers should emphasize on decentralized decision-making by delegating sufficient authority to lower level managers as much as possible. Originality/value – This study is one of the few studies done in Africa in the field of MAS, particularly in the context of Egyptian hospitals.

PurposeStudies in performance measurement systems (PMS) seem to receive little attention in the information system (IS) literature. The purpose of this paper, therefore, is to contribute to the stream of research in the fields of performance measurement and ISs.Design/methodology/approachThe paper examines how IS sophistication is linked to PMSs by investigating the use of performance measures in the Malaysian financial services industry. Data were collected from 140 financial institutions through self‐administered questionnaire survey of top‐level executives. A component‐based structural equation modelling, partial least squares, was used to test the research model.FindingsThe results indicate that IS sophistication is a determinant of performance measures. The results also indicate that different dimensions of IS sophistication affect different dimensions of performance measures usage.Originality/valueThe paper significantly extends prior research on performance measures by establishing IS sophistication links to the different types of performance measures. Further, the findings clarify the distinct and important roles of each IS dimension's influence on performance measures.

PurposeThe purpose of this paper is to propose a framework to examine the relationship between contextual factors, management accounting system (MAS) and managerial performance within the health care industry. In particular, it aims to uncover the contextual factors influencing the design of MAS that would enhance managerial performance in Egyptian hospitals.Design/methodology/approachThe premise of contingency theory is utilized to identify the contextual factors that may influence the use of MAS; namely organizational strategy, technology, structure, external environment, and size. The mediating role of MAS on the impact of managerial performance is examined through the extent to which managers use the four information characteristics associated with the design of MAS: scope, timeliness, aggregated, and integrated.FindingsThis framework provides clarity in linking the perceived usefulness of MAS information characteristics to managerial performance that has been viewed as problematic by past studies.Research limitations/implicationsThe Egyptian hospital industry is chosen as the ideal setting to investigate the relationship between contextual factors, MAS and managerial performance because of its complexity and continuous inept administration despite years following its reform.Practical implicationsThis framework helps practitioners develop new approaches in designing MAS within the health care sector.Originality/valueThis framework adds invaluable insights to the existing literature regarding performance implications of MAS design and functionality, especially within the health care sector.

PurposeThe purpose of this paper is to contribute to a better understanding of competitive strategy and performance measurement in the Malaysian context by applying a modified version of Conant et al's generic strategy scale and categorizing Malaysian firms along the Miles and Snow business strategy typology.Design/methodology/approachCompetitive strategy and performance measurement were assessed via survey. A total of 975 firms were randomly selected from the directory of Federation of Malaysian Manufacturers (FMM) as listed in 2003. Overall, 133 surveys were returned, 120 of which were usable for analysis.FindingsResults suggest that Malaysian firms view competitive strategy differently and are more likely than their Western counterparts to emphasize the use of financial measures of organizational performance. Findings also highlight the difficulties faced when Western measurement scales are employed in non‐Western emerging nations.Research limitations/implicationsBecause greater emphasis was placed on financial rather than non‐financial measures, results indicate a statistically significant different improvement only in sales growth and ROI performance among the three strategy categories. Strategy researchers should focus their attention to the use of multiple performance measures in assessing firm's performance as shown by the significant different in the use of customer satisfaction and loyalty measures, as well as employee satisfaction and training measures.Originality/valueThese findings hold relevance for executives responsible for the formulation and implementation of business strategy. A better understanding of the relationship between business strategy and performance measures using the BSC perspectives of measures has been provided. The study provides some useful insights into the role of performance measures. In addition, this study conveys the message to top managers and designers of performance measurement tools–most notably the balanced scorecard– should pay particular attention to non‐financial performance measures in implementing their organization's strategy.

Purpose – The purpose of this paper is to contribute to the body of knowledge in the area of performance measurement systems, particularly the BSC framework, by investigating empirically the extent of multiple performance measures usage and their effects on the performance of Malaysian manufacturers.Design/methodology/approach – The paper used a mail‐survey of companies listed in the Directory of the Federation of Malaysian Manufacturers (FMM), year 2003. The FMM Directory provides a database of over 2,000 manufacturing firms of various sizes producing a broad range of products. The FMM Directory was utilized because it specifically covers manufacturers and manufacturing‐related services. A simple random sample of 975 companies located in West Malaysia was drawn. Companies with at least 25 employees and annual sales turnover of at least RM10 million were selected. A total of 120 usable responses were gathered and used in the data analysis.Findings – The findings suggest that the use of non‐financial measu...

This paper empirically examined the role of the balanced scorecard (BSC) measures usage as a potential moderator of the business strategy and performance relationship. Samples were taken from 120 manufacturing firms. Results of this study provide evidence that partially support the moderating effects of the BSC measures usage on the strength of the relationship between business strategy and firm performance.

In the new global economy, leveraging intellectual capital (IC), in a manner in which such competitive advantage would gained and sustained, has become a central issue. Drawing primarily on contingency theory, this paper aims to empirically explore the antecedent conditions necessary for an effective development of intellectual capital (IC). In this respect, some contextual factors, namely organizational culture, industry type, and firm size were investigated for their potential impact on IC. The paper reports the results of a study carried out in Iran through a questionnaire survey of Chief Financial Officers (CFOs) in 128 companies within Tehran Stock Exchange (TSE). Partial least squares (PLS) was employed for confirmatory factor analysis as well as hypothesis testing. The results of the survey reveal that organizational culture and size could provide some impacts on IC within Iranian public listed companies. While the influence of knowledge-related resources on measurable performances has been considerably examined in the IC literature, little is known concerning the antecedent conditions necessary to leverage IC more effectively. Hence, this paper extends the current IC literature and contributes to the field through scrutinizing the influence of a series of contextual factors on IC. From practical angle, addressing the antecedent conditions necessary for IC may highlight the importance of firm-specific variables and traits which must be taken into consideration by managers and organizations for a sustainable IC development. Such insight could support organizations to remedy the deficiency in managing and leveraging their knowledge-based assets as their most critical and strategic resources.

The main aim of this research is to review the frameworks currently developed and practiced in the public sector, in particular, the Malaysian local governments, and to identify the requirements for a better framework that can secure management control and facilitate accountability to users, the public and interested stakeholders. Specifically, this study investigates the management accounting and control practices, and the micro-accounting systems used by the local governments. It also examines the extent of the reforms or changes in these systems and the extent of micro-accounting implementation in these organisations. Among the management accounting practices, the results reveal that local government organizations are heavily involved with budgeting and performance measurement tools and show reasonable interest in accountability issues.

While the pressure of legitimacy was found to greatly influence companies’ environmental reporting (ER) practices, being environmentally responsible however is not necessarily reflected through positive and descriptive environmental information. Unless companies begin to truly commit to upholding environmentally responsible, that is, to be accountable towards their business environmental impacts, the issue of incompleteness and incredibility of ER will remain topical. For companies to effectively measure and report their environmental performance, the implementation of Environmental Management Accounting (EMA) is essential as conventional accounting systems disregard the generation of environmental information. Using social issue life cycle theory as an interpretive lens, this paper aims to propose a theoretical framework to investigate the relationship between the extent of EMA implementation and ER practices.

The issue of understanding the antecedent conditions that are necessary for the effective implementation of performance measurement system (PMS) is at the heart of the debate in the management accounting control systems (MACS) literature. This study intends to examine empirically the associations between one element of MACS i.e. PMS and some contextual factors, namely organizational culture, industry type, and firm size from contingency lens. The paper is based on the results of a study carried out in Iran through a questionnaire survey of Chief Financial Officers (CFOs) belong to 128 companies in Tehran Stock Exchange (TSE). SMARTPLS V2.0 M3, which using partial least squares (PLS), was utilized to analyze the data collected in this study. The results of the survey reveal that organizational culture and size are the contributing factors in the usage of certain PMS, i.e. the extent use of multidimensional performance measures, within Iranian public listed companies. This study extends the current management accounting literature in general and previous research on PMS in particular through offering an exhaustive conceptualization of PMS. Moreover, this study sheds light on the way in which practitioners and organizations may realize those antecedents that are pivotal to their effective usage of PMS with the ultimate purpose of taking full advantage of their PMS implementation. Such insight offers guidance as to the focus required in understanding necessary organizational traits as a basic phase of the procedure of PMS usage.