Managerial Accounting Theory

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INTRODUCTION: This paper adopts a managerial accounting perspective to propose and empirically illustrate a research design for firm decision making based on performance feedback. In doing so, it operationalizes the theoretical frameworks based on resources and routines. Most importantly, by taking a best practice benchmarking approach to firm activity in dynamic environments, this study accounts for the endogenous components of a cross-firms heterogeneous routines. This approach is grounded in the managerial accounting task of performance monitoring for control mechanisms and reward systems, which usually revolve around assessing profitability in competitive environments over some time. While the importance of profitability monitoring and…show more content…
Organizational interpretations and firm-level strategic benchmarking From an organizational viewpoint, one could argue that knowledge accumulation occurs throughout the period, with highpoints when all benchmarking components show positive changes. This is less meaningful at industry level, where it is obvious for best performers. Organizational progress and knowledge accumulation interpretations are extremely important at firm level, as progress may arise not only via investments but also from recombining existing complementary resources in novel ways. Theoretical Framework Variables and data The managerial accounting design for benchmarking is completed by the variables definition and data. A profit maximizing approach, such as the one advocated for in this study’s motivation and methodology can be defined using flow variables from income statements. Moreover, benchmarking tasks require information on industry peers to construct the best practice…show more content…
technology hardware and equipment industry during 2000-2011 show how the frontier regressed in the two periods of economic distress. Actually, around 2001 and 2008 the frontier pressed down on the firms, instead of receiving the usual boost from the best performers. This boost appears in 2009-2010, when positive frontier movements indicate the industry’s revival. Dynamic benchmarking, that mixes frontier effects with changes in firm routines, illustrates that less than 50% of the firms progressed and a lot less contributed to the recent frontier push. In strategic management terms, this means that the distance between good and less good organizational results increased, and therefore bigger distances exist among firms in 2009-2011 than before the 2008

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