IDEAS home Printed from https://ideas.repec.org/a/eee/bracre/v53y2021i3s0890838920300731.html
   My bibliography  Save this article

The use of management accounting information by boards of directors to oversee strategy implementation

Author

Listed:
  • Massicotte, Steeve
  • Henri, Jean-François

Abstract

Past research has overlooked the specific informational needs and uses of management accounting information by boards of directors, which constitute a distinctive unit of analysis, focusing mainly on organizational actors within the boundaries of the firm. The aim of this study is to examine the use of management accounting information to oversee strategy implementation in the context of governance. Specifically, we intend to establish theoretical properties and propose a measurement model that captures the use of budget, financial and non-financial performance indicators by boards of directors to oversee the strategic plan. To develop the measurement instrument, conceptual specifications of constructs have been established based on a matrix approach that combines (i) the information conveyed by the three management accounting practices, along with (ii) two theoretical properties reflecting board activities, namely monitoring implementation of the strategic plan, and questioning of the strategic plan. The validity and reliability of the instrument have been evaluated and discussed using a rigorous multi-method integrated approach that includes a literature review, exploratory interviews, consultation of experts in management accounting and governance, and survey data collected from three samples of boards of directors.

Suggested Citation

  • Massicotte, Steeve & Henri, Jean-François, 2021. "The use of management accounting information by boards of directors to oversee strategy implementation," The British Accounting Review, Elsevier, vol. 53(3).
    • Handle: RePEc:eee:bracre:v:53:y:2021:i:3:s0890838920300731
    DOI: 10.1016/j.bar.2020.100953
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0890838920300731
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.bar.2020.100953?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hardesty, David M. & Bearden, William O., 2004. "The use of expert judges in scale development: Implications for improving face validity of measures of unobservable constructs," Journal of Business Research, Elsevier, vol. 57(2), pages 98-107, February.
    2. Lukasz Derdowski & Torvald Øgaard & Einar Marnburg & Gro Ellen Mathisen, 2018. "Creative and innovative behaviours of corporate directors: an elusive role of task-related conflicts," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 22(4), pages 1045-1069, December.
    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    4. Stiles, Philip & Taylor, Bernard, 2001. "Boards at Work: How Directors View their Roles and Responsibilities," OUP Catalogue, Oxford University Press, number 9780198288763, Decembrie.
    5. Réal Labelle & Rim Gargouri & Claude Francoeur, 2010. "Erratum to: Ethics, Diversity Management, and Financial Reporting Quality," Journal of Business Ethics, Springer, vol. 93(2), pages 355-355, May.
    6. Simons, Robert, 1990. "The role of management control systems in creating competitive advantage: New perspectives," Accounting, Organizations and Society, Elsevier, vol. 15(1-2), pages 127-143.
    7. Kim Langfield‐Smith, 2008. "Strategic management accounting: how far have we come in 25 years?," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 21(2), pages 204-228, February.
    8. Matthew A. Rutherford & Ann K. Buchholtz, 2007. "Investigating the Relationship Between Board Characteristics and Board Information," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(4), pages 576-584, July.
    9. Ann Langley & Henry Mintzberg & Patricia Pitcher & Elizabeth Posada & Jan Saint-Macary, 1995. "Opening up Decision Making: The View from the Black Stool," Organization Science, INFORMS, vol. 6(3), pages 260-279, June.
    10. repec:dau:papers:123456789/638 is not listed on IDEAS
    11. Hongjin Zhu & Pengji Wang & Chris Bart, 2016. "Board Processes, Board Strategic Involvement, and Organizational Performance in For-profit and Non-profit Organizations," Journal of Business Ethics, Springer, vol. 136(2), pages 311-328, June.
    12. Marie‐Josée Roy, 2011. "Board information: meeting the evolving needs of corporate directors," Management Research Review, Emerald Group Publishing Limited, vol. 34(7), pages 773-789, June.
    13. Kathleen M. Eisenhardt, 1985. "Control: Organizational and Economic Approaches," Management Science, INFORMS, vol. 31(2), pages 134-149, February.
    14. Antonella Cugini & Antonella Caru & Fabrizio Zerbini, 2007. "The Cost of Customer Satisfaction: A Framework for Strategic Cost Management in Service Industries," European Accounting Review, Taylor & Francis Journals, vol. 16(3), pages 499-530.
    15. John Hulland, 1999. "Use of partial least squares (PLS) in strategic management research: a review of four recent studies," Strategic Management Journal, Wiley Blackwell, vol. 20(2), pages 195-204, February.
    16. Réal Labelle & Rim Makni Gargouri & Claude Francoeur, 2010. "Ethics, Diversity Management, and Financial Reporting Quality," Journal of Business Ethics, Springer, vol. 93(2), pages 335-353, May.
    17. Abernethy, Margaret A. & Brownell, Peter, 1997. "Management control systems in research and development organizations: The role of accounting, behavior and personnel controls," Accounting, Organizations and Society, Elsevier, vol. 22(3-4), pages 233-248.
    18. Siciliano, Julie I., 2002. "Governance and strategy implementation: expanding the board's involvement," Business Horizons, Elsevier, vol. 45(6), pages 33-38.
    19. Kevin Hendry & Geoffrey C. Kiel, 2004. "The Role of the Board in Firm Strategy: integrating agency and organisational control perspectives," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(4), pages 500-520, October.
    20. Bisbe, Josep & Batista-Foguet, Joan-Manuel & Chenhall, Robert, 2007. "Defining management accounting constructs: A methodological note on the risks of conceptual misspecification," Accounting, Organizations and Society, Elsevier, vol. 32(7-8), pages 789-820.
    21. Zaichkowsky, Judith Lynne, 1985. "Measuring the Involvement Construct," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 12(3), pages 341-352, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rui Pires & Maria-Ceu G. Alves, 2022. "The Impact of Environmental Uncertainty on Accounting Information Relevance and Performance: A Contingency Approach," Economies, MDPI, vol. 10(9), pages 1-15, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sebastian Goebel & Barbara E. Weißenberger, 2017. "Effects of management control mechanisms: towards a more comprehensive analysis," Journal of Business Economics, Springer, vol. 87(2), pages 185-219, February.
    2. Peters, Matt D. & Wieder, Bernhard & Sutton, Steve G. & Wakefield, James, 2016. "Business intelligence systems use in performance measurement capabilities: Implications for enhanced competitive advantage," International Journal of Accounting Information Systems, Elsevier, vol. 21(C), pages 1-17.
    3. Zalata, Alaa Mansour & Tauringana, Venancio & Tingbani, Ishmael, 2018. "Audit committee financial expertise, gender, and earnings management: Does gender of the financial expert matter?," International Review of Financial Analysis, Elsevier, vol. 55(C), pages 170-183.
    4. Ding Ning & Irfan-Ullah & Muhammad Ansar Majeed & Aurang Zeb, 2022. "Board diversity and financial statement comparability: evidence from China," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(4), pages 743-801, December.
    5. Christoph Feichter & Isabella Grabner, 2020. "Empirische Forschung zu Management Control – Ein Überblick und neue Trends [Empirical Management Control Reserach—An Overview and Future Directions]," Schmalenbach Journal of Business Research, Springer, vol. 72(2), pages 149-181, June.
    6. Chapman, Christopher S. & Kihn, Lili-Anne, 2009. "Information system integration, enabling control and performance," Accounting, Organizations and Society, Elsevier, vol. 34(2), pages 151-169, February.
    7. Asif Saeed & Ammar Ali Gull & Asad Ali Rind & Muhammad Shujaat Mubarik & Muhammad Shahbaz, 2022. "Do socially responsible firms demand high‐quality audits? An international evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 2235-2255, April.
    8. Beatriz Aibar-Guzmán & José-Valeriano Frías-Aceituno, 2021. "Is It Necessary to Centralize Power in the CEO to Ensure Environmental Innovation?," Administrative Sciences, MDPI, vol. 11(1), pages 1-21, March.
    9. Cooper, Christine, 2015. "Entrepreneurs of the self: The development of management control since 1976," Accounting, Organizations and Society, Elsevier, vol. 47(C), pages 14-24.
    10. Dunk, Alan S., 2011. "Product innovation, budgetary control, and the financial performance of firms," The British Accounting Review, Elsevier, vol. 43(2), pages 102-111.
    11. Marta Cristina Pelucio Grecco, 2013. "The Effect of Brazilian convergence to IFRS on earnings managment by listed Brazilian nonfinancial companies," Brazilian Business Review, Fucape Business School, vol. 10(4), pages 110-132, October.
    12. Christina Boedker & Kar Ming Chong, 2022. "The mediating role of accounting controls between supervisors' empowering leadership style and subordinates' creativity and goal productivity," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(4), pages 4587-4614, December.
    13. David Weitzner & Theo Peridis, 2011. "Corporate Governance as Part of the Strategic Process: Rethinking the Role of the Board," Journal of Business Ethics, Springer, vol. 102(1), pages 33-42, March.
    14. Zhang, Zhikun & Zhang, Chuang & Shen, Lu, 2020. "Deterring dealer slackness: The role of supplier incentives and monitoring and the market environment," Journal of Business Research, Elsevier, vol. 121(C), pages 353-363.
    15. Helena Isidro & Márcia Sobral, 2015. "The Effects of Women on Corporate Boards on Firm Value, Financial Performance, and Ethical and Social Compliance," Journal of Business Ethics, Springer, vol. 132(1), pages 1-19, November.
    16. Rind, Asad Ali & Abbassi, Wajih & Allaya, Manel & Hammouda, Amira, 2022. "Local peers and firm misconduct: The role of sustainability and competition," Economic Modelling, Elsevier, vol. 116(C).
    17. Jetta Frost & Rick Vogel & Khaled Bagban, 2016. "Managing Interdependence in Multi-business Organizations," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 17(2), pages 225-260, August.
    18. Mazzi, Francesco & Slack, Richard & Tsalavoutas, Ioannis, 2018. "The effect of corruption and culture on mandatory disclosure compliance levels: Goodwill reporting in Europe," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 31(C), pages 52-73.
    19. Emil Inauen & Margit Osterloh & Bruno Frey & Fabian Homberg, 2015. "How a multiple orientation of control reduces governance failures: a focus on monastic auditing," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 19(4), pages 763-796, November.
    20. Laura Cabeza-García & Esther B. Brío & Carlos Rueda, 2021. "The moderating effect of innovation on the gender and performance relationship in the outset of the gender revolution," Review of Managerial Science, Springer, vol. 15(3), pages 755-778, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:bracre:v:53:y:2021:i:3:s0890838920300731. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/the-british-accounting-review .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.