International Journal of Advanced Research and Publications (2456-9992)

Insight On The Use Of Management Accounting Practices Among Large Manufacturing Entities In Zimbabwe: A Case Study Of Bulawayo Metropolitan Province.

Volume 4 - Issue 2, February 2020 Edition
[Download Full Paper]

Author(s)
Banele Dlamini
Keywords
Management Accounting Practices (MAPs), Costing system, Budgeting, Performance evaluation, Decision support system, Strategic management accounting
Abstract
The manufacturing sector in Zimbabwe is facing various obstacles which steered to the closure of numerous corporations. Management Accounting Practices (MAPs) have a critical role in the prosperity and survival of organizations as they offer vital pecuniary and non-pecuniary information for decision-making, policy formulation and promoting competitive edge for the entity. MAPs are used by manufacturing organizations in improving and assessing their operations. The study sought to explore the use of MAPs among large companies in Zimbabwe. Data were collected using questionnaires and in-depth interviews from manufacturing companies in the Bulawayo Metropolitan Province and analyzed using SPSS version 22. The study shown that large entities in the Bulawayo Metropolitan Province use few modern MAPs such as ABC, activity based budgeting and strategic management accounting and mainly apply traditional MAPs in their operations. The study recommends that large entities should adopt more modern management accounting practices in their operations. Entities should also consider using management accounting software so as to fully exploit the benefits of management accounting in a volatile business environment. It is essential for entities to consider the best practice in management accounting and scan their environment since the surrounding factors influence their choice of MAPs.
References
[1] Abdel-Kader, M. & Luther, R. 2006, Management accounting practices in the British food and drinks industry. British Food Journal, 108(5): 336-357.
[2] Abdel-Kader, M. & Luther, R. 2008, The impact of firm characteristics on management accounting practices: A UK-based empirical analysis, British Accounting Review, 40(1): 2-27.
[3] Ahmad, K. 2012. The Use of Management Accounting Practices in Malaysian SMEs, University of Exeter
[4] Ahmad, K., & Zabri, S.M., 2015, "Factors explaining the use of management accounting practices in Malaysian medium-sized firms", Journal of Small Business and Enterprise Development, 22(4)762-781.
[5] Banker, R.D., Potter, G. & Srinivasan, D. 2000, An empirical investigation of an incentive plan that includes non-financial performance measures. The Accounting Review, 75(65-92)
[6] Boateng, A. & Drury, C. 2007, An analysis of the adoption, perceived benefits, and expected future emphasis of western management accounting practices in Chinese SOEs and JVs. The International Journal of Accounting, 42: (171-185).
[7] Bruns W.J., & McKinnon SM. 1993, Information and managers: A field study. Journal Management Accounting Research.
[8] Chenhall, R.H., & Langfield-Smith, K. 1998, Adoption and benefits of management accounting practices: An Australian study. Management Accounting Research, 9(1): 1-19.
[9] Chenhall, R.H., 2007, “Theorizing contingencies in management control systems research,” in Chapman, C.S., Hopwood, A.G., & Shields, M.D., eds., Handbook of Management Accounting Research, 163–205
[10] Covaleski, M. A., Dirsmith, M. W. & Samuel, S., 1996, Managerial accounting research: The contributions of organizational and sociological theories. Journal of Management Accounting Research (8): 1-35.
[11] Crossman P.T. 1958, The nature of management accounting. Accounting Rev 33(2):222
[12] Damiyano, D., Muchabaiwa, L., Mushanyuri, B.E. and Chikomba, C.P. 2012. “An investigation of Zimbabwe’s manufacturing sector competitiveness”, International Journal of Development and Sustainability, Vol. 1 No. 2, pp. 581–598.
[13] Drury, C., Braund, S., Osborne, P. & Tayles, M. 1993. A survey of management accounting practices in UK manufacturing companies, Chartered Association of Certified Accountants
[14] Emmanuel, C., Otley, D. & Merchant, K., 1990. Accounting for Management Control, 2nd ed., London: Chapman & Hall.
[15] Feltham G.A. 1968. The value of information. Account Rev 43(4):684–696
[16] Gichaaga, P.M., 2014. Effects of Management Accounting Practices on Financial Performance of Manufacturing Companies in Kenya, MSC. Thesis. University of Nairobi
[17] Gomes, C.F., Yasin, M.M. & Lisboa, J.V. 2004. An examination of manufacturing organizations performance evaluation; Analysis, implications and a framework for future research. International Journal of Operations & Production Management, 24(5): 488-513
[18] Guilding, C., Cravens, K.S. & Tayles, M. 2000. An international comparison of strategic management accounting practices. Management Accounting Research, 11:113–135
[19] Hall, M. 2008.The effect of comprehensive performance measurement systems on role clarity, psychological empowerment and managerial performance. Accounting, Organizations and Society, 33:141-163.
[20] Horngren C.T., Bhimani A., Datar S., & Foster G. 2005.Management and cost accounting. Financial Times Prentice Hall, Harlow
[21] Horngren, C., Datar, S., Foster, G., Rajan, M., & Ittner, C. 2009. Cost Accounting: A Managerial Emphasis. New Jersey: Upper Saddle River: Prentice Hall.
[22] Majoni, T., Matunhu, J., & Chaderopa, B. 2016. SMEs Policies and Challenges: A Comparative Analysis of Zimbabwe and South Korea. International Journal of Scientific and Research Publications, 6(6).
[23] Makoni, R.D. 2000. Effects of the Economic Structural Adjustment Programme (1991-1993) On the Participation of Secondary School Girls in Zimbabwe, Zambezia (2000)
[24] Manyumwa, C. 2009. ESAP and Education in Zimbabwe: The effects of economic policy on educational practice
[25] Maseko N., & Munyani 2011. Accounting Practices of SMEs in Zimbabwe: An Investigative Study of Record Keeping for Performance Measurement (A Case Study of Bindura). Journal of Accounting and Taxation, 13(8):171-181
[26] McChlery, S., Meechan, L. & Godfrey, A.D. 2004. Barriers and catalysts to sound financial management systems in small-sized enterprises. Research Executive Summaries Series. CIMA, 1(3).
[27] Mitchell, F. & Reid, G. 2000. “Problems, Challenges, and Opportunities: Small Business as a Setting for Management Accounting Research”. Management Accounting Research, 11(4): 385-390.
[28] Muriithi, SM. 2017. African Small and Medium Enterprises (SMEs) Contributions, Challenges and Solutions.European Journal of Research and Reflection in Management Sciences 5(1):37
[29] Ojua M.O. 2016. Strategic Management Accounting Practices among Indigenous Nigerian Manufacturing Enterprises. Open Science Journal 1(2)
[30] Otley, D. 1995. Management control, organisational design and accounting information systems. Issues in Management Accounting, Prentice Hall, London, 45-63.
[31] Scapens, R.W. 1991. Management Accounting: A Review of Recent Developments. The Macmillan Press Ltd.
[32] Singer F.A. 1961. Management accounting. Accounting Review, 36(1):112
[33] Waweru, N.M., Hoque, Z. & Uliana, E., 2004. "Management accounting change in South Africa: Case studies from retail services". Accounting, Auditing & Accountability Journal, 17(5):675-704.
[34] Wu, J., Boateng, A. & Drury, C. 2007. An analysis of the adoption, perceived benefits, and expected future emphasis of western management accounting practices in Chinese SOEs and JVs. The International Journal of Accounting, 42: 171-185.
[35] Yang, Q., 2010.The Impact of the Budgeting Process on Performance in Small and Medium-Sized Firms in China. Doctorate Thesis, University of Twente