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Management accounting and control practices in a lean manufacturing environment

Author

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  • Fullerton, Rosemary R.
  • Kennedy, Frances A.
  • Widener, Sally K.

Abstract

A lean strategy is rapidly becoming the dominant paradigm in manufacturing. Kennedy and Widener (2008) use a case study to develop a theoretical framework of management accounting and control practices for firms following a lean manufacturing strategy. We build on Kennedy and Widener (2008) by examining a structural equation model that provides evidence on the extent to which a lean manufacturing implementation is related to five management accounting and control practices. Using survey data from 244 US companies with an interest in lean manufacturing, we find a direct positive relation between the extent of a lean manufacturing implementation and a simplified strategic reporting system, value stream costing, visual performance measurement information, and employee empowerment. We find a direct negative relation with inventory tracking; however, we find it is conditional on the extent of top management support for change in production strategies such that firms decrease reliance on inventory tracking in the presence of strong management support. We also conclude that the management accounting and control practices work together as a package in a lean manufacturing environment as evidenced by the many direct associations among the five management accounting and control practices.

Suggested Citation

  • Fullerton, Rosemary R. & Kennedy, Frances A. & Widener, Sally K., 2013. "Management accounting and control practices in a lean manufacturing environment," Accounting, Organizations and Society, Elsevier, vol. 38(1), pages 50-71.
  • Handle: RePEc:eee:aosoci:v:38:y:2013:i:1:p:50-71
    DOI: 10.1016/j.aos.2012.10.001
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    References listed on IDEAS

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    1. Arnold, Markus C. & Artz, Martin, 2015. "Target difficulty, target flexibility, and firm performance: Evidence from business units’ targets," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 61-77.
    2. Michael Fakoya, 2015. "Adopting material flow cost accounting model for improved waste-reduction decisions in a micro-brewery," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 17(5), pages 1017-1030, October.
    3. Jürgen Harrer & Andreas Wald, 2016. "Levers of enterprise security control: a study on the use, measurement and value contribution," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 27(1), pages 7-32, February.

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