Determinants and impact of production planning and control accounting techniques on competitiveness of manufacturing companies: a structural equation modelling approach
ISSN: 1030-9616
Article publication date: 17 July 2024
Issue publication date: 6 August 2024
Abstract
Purpose
This study aims to investigate four internal (organisational structure, quality of information technology, business strategy and market orientation) and two external (competition intensity and perceived environmental uncertainty) contextual factors affecting the use of production planning and control accounting techniques (PPC), as well as the impact of PPC usage on organisational competitiveness.
Design/methodology/approach
Seven major PPC techniques were investigated, namely: attribute costing, lifecycle costing, quality costing, target costing, value-chain costing, activity-based costing and activity-based management. By deploying a multi-informant strategy, a structured questionnaire was used to gather survey data from 129 senior accounting, finance and production personnel of publicly quoted manufacturing companies in Nigeria.
Findings
The results, using structural equation modelling, show that market orientation is the strongest determinant of PPC usage. The inability of competition intensity and perceived environmental uncertainty to notably affect PPC usage suggests that external environmental pressure to use PPC is weak. Although PPC can engender organisational competitiveness, their interactive usage yields optimal results.
Originality/value
The study contributes to knowledge by: (i) presenting evidence that although PPC techniques can engender organisational competitiveness, it is their interactive usage that yields optimal results; (ii) empirically demonstrating that contextual factors influence PPC usage in line with the contingency theory; and (iii) validating the diffusion of innovation theory that organisations will typically deploy PPC techniques because of their relative advantage of improving organisational competitiveness.
Keywords
Acknowledgements
Authors are grateful to the Editor, Professor (Assoc.) Habib Zaman Khan and two anonymous reviewers for insightful comments and suggestions in improving the earlier versions of the paper.
Funding: No funding was received to assist with the preparation of this manuscript.
Conflict of interest: The authors have no relevant financial or non-financial interests to disclose.
Citation
Oyewo, B., Alta'any, M., ALo, K.A. and Dube, N.T. (2024), "Determinants and impact of production planning and control accounting techniques on competitiveness of manufacturing companies: a structural equation modelling approach", Accounting Research Journal, Vol. 37 No. 4, pp. 453-478. https://doi.org/10.1108/ARJ-01-2023-0014
Publisher
:Emerald Publishing Limited
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