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Impact of Strategic Initiatives in Management Accounting on Corporate Financial Performance: Evidence from Amman Stock Exchange

Author

Listed:
  • Husam Aldeen Al-Khadash

    (Hashemite University, Jordan)

  • Mete Feridun

    (Cyprus International University)

Abstract

This article aims at investigating the link between the practice of Activity Based Costing (ABC), Just-in-Time (JIT), and Total Quality Management (TQM) as strategic initiatives and the improvement in corporate financial performance of 56 industrial shareholding companies in Jordan. Ordinary Least Squares Regression analysis is used to test the association between the awareness level of the importance of using the initiatives and the level of adopting these initiatives. It is also used to identify the improvement in ROA as a mean of financial performance which is associated with the initiatives. Analysis shows that 26.8% of the companies under consideration use at least one of the strategic initiatives. In addition, the awareness level of the importance of using the strategic initiatives is found to be significantly high among the financial managers, but such awareness is not reflected in the implementation of these initiatives. Furthermore, strong evidence emerges that the use of strategic initiatives leads to improvement in financial performance of the companies under consideration.

Suggested Citation

  • Husam Aldeen Al-Khadash & Mete Feridun, 2006. "Impact of Strategic Initiatives in Management Accounting on Corporate Financial Performance: Evidence from Amman Stock Exchange," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 4(4), pages 299-312.
  • Handle: RePEc:mgt:youmgt:v:4:y:2006:i:4:p:299-312
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    Cited by:

    1. repec:eee:spacre:v:18:y:2015:i:1:p:32-43 is not listed on IDEAS
    2. Charles Ikechukwu Agu & Augustine Uchechukwu Nweze & Chinedu Innocent Enekwe, 2016. "The Use of Strategic Management Accounting Techniques (SMATs) in Sustainability Performance Measurement for Corporate Governance in Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(3), pages 262-271, July.

    More about this item

    Keywords

    ABC; JIT; TQM; strategic initiatives; improvement in financial performance;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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