Christina Juliana, Lindawati Gani and Johnny Jermias
The purpose of this study is to examine the performance consequences of misalignment among business strategy, organizational configurations and management accounting systems (MAS).
Abstract
Purpose
The purpose of this study is to examine the performance consequences of misalignment among business strategy, organizational configurations and management accounting systems (MAS).
Design/methodology/approach
The authors conducted a questionnaire survey to collect data and test the hypotheses developed in this study. The authors sent the questionnaires to the accounting and finance managers of the manufacturing companies listed on the Indonesia Stock Exchange. The authors received 259 responses from a total of 579 questionnaires sent or a 44.73% response rate. This study excludes 36 responses for further analyzes due to incomplete responses (five responses) and responses from lower-level employees (31 responses). The remaining 223 responses are used for statistical analyzes.
Findings
This study hypothesizes and finds that misalignments among business strategy, leadership style, organizational culture and MAS are negatively associated with both financial and non-financial performance.
Research limitations/implications
The study has three limitations. First, the authors intentionally collect data from the manufacturing industry to minimize the effect of data heterogeneity. To improve the generalizability of the study, future research might consider using data from other industries. Second, the study measures business strategy based on respondents’ perception of their companies’ strategy using indicators representing either product differentiation or cost leadership strategy. Future studies might use different ways of measuring business strategy using more objective empirical proxies such as research and development expenditures or premium price capability. Finally, this study conducts a survey and measures all the variables in a single period. Future studies might use a longitudinal approach to investigate the evolution of companies’ strategies and their impact on leadership styles, organizational commitment and MAS.
Practical implications
The results of the study will help companies in their search for senior executives, in building their organizational culture and in implementing their MAS. The study suggests that product differentiation companies should search for transformational leaders that empower their subordinates to take initiative and encourage innovative ideas in performing their tasks. In regard to MAS, the results suggest that product differentiation companies should implement broad focus MAS that emphasize the balance between financial and non-financial factors. By contrast, cost leadership companies should search for transactional leaders who emphasize on completing tasks on hand effectively and efficiently. In regard to MAS, the findings suggest that cost leadership companies will benefit more from using narrow focus MAS such as formal planning and budgeting, variance analyzes and cost-volume-profit analyzes.
Social implications
The findings of the study suggest that product differentiation companies should build a flexible culture that encourages subordinates to take the risk and effectively manage opportunities and challenges through changes and innovation. Furthermore, cost leadership companies should build a controlled culture that promotes adherence to policies and procedures to minimize costs and increase efficiency.
Originality/value
This paper introduces to the management and accounting literature the concept of fit among competitive strategy, leadership style, organizational culture and MAS and uses the two-stage method proposed by Ittner and Larcker (2001) to measure the degree of misalignment among business strategy and its contextual variables and, in turn, examines the impacts of the misalignment on financial and non-financial performance.
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Idrianita Anis, Lindawati Gani, Hasan Fauzi, Ancella Anitawati Hermawan and Desi Adhariani
This study aims to propose a solution to accelerate financing support low carbon (circular economy) transition. The authors developed a sustainability governance (SGOV) model and…
Abstract
Purpose
This study aims to propose a solution to accelerate financing support low carbon (circular economy) transition. The authors developed a sustainability governance (SGOV) model and a sustainability governance (SGOV) index as a proxy for the diffusion of sustainability innovation. This study investigates the effect of SGOV practices on profitability with the mediating role of operational efficiency.
Design/methodology/approach
The SGOV index consists of 32 and 122 sub-items, constructed using content analysis of annual and sustainability reports published by banks listed on the Indonesia Stock Exchange (IDX) from 2010 to 2020 (404 bank-year observations).
Findings
Banks are at a moderate level of sustainability innovation. They are prioritizing the balance aspects of financial, social and environmental. SGOV practice negatively affects profitability. However, operational efficiency plays a positive mediating role that is robust.
Research limitations/implications
The measurement of the SGOV index uses criteria that have not been tested in previous studies. There is the potential subjectivity in interpreting qualitative data, although this has been minimized by cross-checking the analysis of five raters.
Practical implications
This study gives feedback for the Indonesia sustainable finance (SF) journey phase I to proceed into SF journey phase II.
Social implications
The SGOV model can be applied in other industry sectors to know the readiness for entering low carbon (circular economy) transition.
Originality/value
The uniqueness of the scoring technique assuming a step-by-step innovation model to sustainable finance.
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This study aims to assess how prepared and flexible accounting professionals are to produce financial accounts that adhere to Shariah regulations in the metaverse. The study also…
Abstract
Purpose
This study aims to assess how prepared and flexible accounting professionals are to produce financial accounts that adhere to Shariah regulations in the metaverse. The study also highlights the potential positive and negative effects of metaverse utilization on the financial reporting quality of Islamic financial institutions (IFIs).
Design/methodology/approach
A questionnaire was distributed to a random sample of 102 accounting professionals employed in IFIs in Bahrain.
Findings
The capacity to provide real-time reporting within the metaverse would enhance the quality and reliability of Islamic financial reporting. Furthermore, the fluctuating values of digital assets in the metaverse pose a significant challenge to ensuring accurate financial reporting. IFIs fail to create an environment suitable for transitioning to the metaverse. Moreover, the participants expressed concerns about how the rapid expansion of the metaverse may challenge the adherence to Shariah governance principles in virtual financial transactions. They further recommended that the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) establish explicit directives on Shariah governance in the metaverse.
Practical implications
Various IFIs’ stakeholders, including practitioners, shareholders and employees interested in adopting the metaverse technology, can benefit from the findings of the studies. In addition, the study could help Islamic banks in Bahrain better grasp the readiness and adaptability of accounting professionals. This understanding would aid in establishing robust financial reporting standards that align with Shariah principles in the metaverse.
Originality/value
This research examines the metaverse through the lens of Islamic financial reporting, offering recent evidence on technological developments and financial reporting practices within an Islamic context. The research findings would contribute to advancing the knowledge among academics, professionals and all interested parties concerning the effects of metaverse implementation on Shariah governance principles and the quality of financial reporting. The study findings would offer policymakers and regulators in the Islamic finance sector essential insights.