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Management accounting and control practices in a lean manufacturing environment

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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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    2. Hadid, Wael & Hamdan, Mohammed, 2022. "Firm size and cost system sophistication: The role of firm age," The British Accounting Review, Elsevier, vol. 54(2).
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    4. 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.
    5. Cosmus Karisa Katana & Dr Rashid Fwamba & Dr Tecla Kirwa, 2023. "Cash Control Practices and Financial Efficacy of Manufacturing Firms in Mombasa County of Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(6), pages 60-71, June.
    6. Anna Stronczek, 2023. "Barriers of Lean Accounting Implementation in Polish Enterprises: DEMATEL Approach," Sustainability, MDPI, vol. 15(15), pages 1-19, August.
    7. Alexander Tkotz & Jan Christoph Munck & Andreas Erich Wald, 2018. "Innovation Management Control: Bibliometric Analysis Of Its Emergence And Evolution As A Research Field," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(03), pages 1-34, April.
    8. 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.
    9. Kevin Hermanto Tupamahu & Imam Ghozali & P.T. Basuki, 2019. "Lean Management, Competitive Advantage, and Firm Performance: The Role of Management Control Systems (Evidence from Indonesia Manufacturing Firms)," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 8, November.
    10. Amanda Curry, 2019. "Across the great divide: a literature review of management accounting and operations management at the shop floor," Management Review Quarterly, Springer, vol. 69(1), pages 75-119, February.
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    13. Thomas Borup Kristensen & Henrik Saabye, 2021. "Increasing the enabling use of performance measures: a longitudinal quasi natural experiment," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 32(3), pages 401-433, September.

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