Cadez's Strategy, Strategic Management Accounting And Performance

1365 Words 6 Pages
In this paper, it will be argued that Cadez’s (2011) Strategy, strategic management accounting and performance: A Configurational Analysis, is an interesting but challenging piece of research. The argument will be developed through a critical review of Cadez’s paper, discussing in turn its research methods, and practical implications.

The paper reports a study of 254 of the largest Slovenian manufacturing companies although only 109 were usable. The research is concerned with manufacturing companies because Ketchen et al. recommend focusing configurational research on a single industry.

The study utilised a qualitative questionnaire research strategy to understand the relationship between management accounting and strategy. The abstract
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Strategic management accounting has changed over time from the collection of competitor information, into attempts to match management accounting systems with a business strategic position. It is now acknowledged that the term strategic management accounting (SMA) is used to describe the process of ‘provision and analysis of management accounting data about a business and its competitors for use in developing and monitoring business strategy’ .

Strategies are the offshoot of business goals and direction. They are designed to give an indication to all members of the business how the business will achieve its goals. While developing their competitive strategies, businesses create a general formula about how to compete, what the targets should be and which policies should be implemented to reach these
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It was concluded that similar levels of performance can be achieved using different strategic and structural alternatives. Unfortunately fundamental difficulties with Cadez’s supporting literature, cluster analytical technique and execution of his research mean that the reported results must be treated with caution. Cadez notes in his article that his findings should be viewed in the context of it’s limitations. Cadez is the first to admit that despite it’s shortcomings, the contingency paradigm is likely to remain dominant in empirical research concerned with relationships between strategy and management accounting.

It would be worth further studies being carried out by developing the research model to measure the nonfinancial and financial performances of businesses. Also, the number of businesses can be increased to generalize the outcomes and regional comparisons can be performed in future studies. A further study examining the potential moderating effects of other environmental and organizational variables would also be valuable.

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