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The purpose of this paper is to contribute to the ongoing debate about the effectiveness of lean practices in the service sector.

This paper examines the impact of lean service on firm operational and financial performance. Exploratory factor analysis is used to reduce the data and identify the underlying dimensions of lean service, and partial least squares structural equation modelling is used to test the developed model.

The results indicate that the social bundles of lean service had an independent positive impact on firm operational and financial performance. Furthermore, while the technical bundles had an independent positive effect on only the operational performance, they interacted with the social bundles to improve both the operational and financial performance. The findings suggest that service managers must follow a systematic approach when implementing lean service practices without focusing on one side of the system at the expense of the other.

The paper highlights the importance of implementing lean service as a socio-technical system (STS) if service firms are to achieve the best possible benefits from their implementation. The motivation factor (social side) and the customer value factor (technical side) are capable of improving all operational performance dimensions and profit margin even if implemented alone. Therefore, service managers with limited resources are encouraged to start lean service implementation with practices within these factors. However, they can also expect improved operational and financial performance from implementing other factors as they positively interact to further improve performance.

Viewing lean service as a STS, this paper incorporates a larger set of lean practices than previous studies and demonstrates empirically their capability of improving service firms’ operational and financial performance. It contributes significantly to the emerging literature on lean service by empirically testing the mechanism through which lean service affects firm performance.

The extant literature on lean service reveals a noticeable lack of theoretical models establishing the core constructs of lean service, their interrelation and impact on organizational performance. The purpose of this paper is to address this gap by proposing a theoretical model in which lean constructs are identified and operationalized to establish their interrelation and impact on organizational performance.

This paper synthesizes information drawing on a systematic review of the literature on lean service, other relevant academic literature to develop a theoretical model and a set of propositions. Drawing on the universal theory, socio-technical systems theory and contingency theory (CT), the paper highlights and clarifies the potential impact of lean service on operational and financial performance.

This study identifies a comprehensive set of lean technical practices, lean supportive practices, inhibitors and expected outcome of lean service. Expected relationships among those constructs are established by developing a conceptual framework with several propositions based on the relevant literature and the socio-technical system theory, the universal perspective and the CT, when relevant. Moreover, six influential contextual variables on the lean-performance relation are identified based on a review of the management accounting literature, organizational strategy literature and diversification literature to overcome limitations of previous studies.

This paper covers a gap in the literature by identifying and operationalizing lean service constructs and offering a theoretical model with several propositions that establish relationships between lean constructs and overcome limitations in previous studies by identifying six contextual variables that are important factors in the lean-performance associations.

This paper aims to test a contingency-based path model that concurrently links the role of management accountants (MA) and advanced manufacturing technologies (AMTs) to cost system sophistication (CSS), as well as linking the latter to improvements in organisational performance through improving cost management and product planning decisions.

This paper used the questionnaire survey strategy to collect data from 373 medium and large manufacturing business units based in the UK, then subjected the data to structural equation modelling analysis to test a contingency-based path model.

The results show that the role of MAs and AMTs positively influence CSS. Moreover, it was found that the latter is positively associated with improvements in cost management decisions which, in turn, lead to improvements in organisational performance. However, no support was found for the association between the level of CSS and improvements in product planning decisions, although the latter was found to be positively associated with organisational performance. These results confirm the theory and empirical findings regarding the role that MAs and AMTs play in designing the cost accounting system, and support the argument that adopting sophisticated cost systems does not lead directly to improvements in organisational performance, unless the benefits of such systems, in terms of improved decision-making and cost applications, are used.

This research contributes to the literature by testing a contingency-based path model that incorporates hitherto underexamined contextual factors, namely, the role of MAs and AMTs; examining the effect of CSS on a critical output, organisational performance and the mechanisms of this effect; and considering the complexity of the business environments through the concurrent testing of the relationships involved in the research model.