Drivers of management accounting adaptability: the agility lens

Abstract

Purpose

Management accounting practices are expected to adapt and evolve with changing information requirements. The purpose of this study is to determine factors that drive management accounting adaptability (MAA) in organisations using the agility lens.

Design/methodology/approach

This study identifies three factors that drive MAA through their support of agility. Specifically, the impact of top management team knowledge, team-based structures and information system flexibility on MAA is examined. The hypotheses are tested using data collected from an online survey of Australian and New Zealand companies.

Findings

The results support the proposed relations and explain a significant variance in MAA. Also, consistent with previous findings, a positive association between MAA and management accounting effectiveness was found.

Research limitations/implications

This study illustrates the value of using the agility lens in the context of management accounting change, which is under-explored in the accounting literature relative to other disciplines such as production economics.

Practical implications

This study recommends management to refrain from behaviour that encourages and maintains the status quo. Influencing the factors identified in this study can encourage more innovation in management accounting and improve adaptability when changes to organisational contingencies occur.

Originality/value

This paper explores and adopts the concept of agility to complement dominant theories in the management accounting change literature. The concept of agility is unpacked and applied to review existing literature to explain how management accounting may become more adaptable and open to evolving. The resulting model identifies factors that support sense-making and responding as constituents of agility. This study also extends a recent study by Yigitbasioglu (2016) on the link between information technology and MAA by building a more powerful model in terms of scope and explanatory power to explain the ability of management accounting to change over time.

Citation

Yigitbasioglu, O.M. (2017), "Drivers of management accounting adaptability: the agility lens", Journal of Accounting & Organizational Change, Vol. 13 No. 2, pp. 262-281. https://doi.org/10.1108/JAOC-12-2015-0092