Manufacturing strategy and organisational performance: The role of competition and MAS information
Journal of Accounting & Organizational Change
ISSN: 1832-5912
Article publication date: 25 February 2014
Abstract
Purpose
The extant literature suggests that an increasing number of organisations are adopting manufacturing strategies such as JIT practices to continuously improve provision of products and associated services desired by customers. The authors aim to investigate the relationship between adoption (implementation) of JIT practices and organisational performance taking into account the role of market competition and managerial use of management accounting system (MAS) information.
Design/methodology/approach
Data for the study were collected from 92 general managers of Australian manufacturing organisations. Mailed questionnaire and personal interviews were used to collect the data.
Findings
The results reveal that market competition and managerial use of MAS (hereafter, the use of MAS) information impact the relationship between an organisation's adoption of JIT practices and its financial performance. The results reported in prior studies on the relationship are mixed; some studies report a positive relationship while others report no relationship. This study explains with empirical evidence when adoption of JIT practices provides financial benefits and when it does not.
Research limitations/implications
The results are of interest to researchers and managers to understand performance implications of adoption of JIT practices and the use of MAS information. For researchers, the results make an incremental contribution to knowledge by revealing that adoption of JIT practices is beneficial in situations where it is supported by the use of MAS information in high competition market. For managers, the results highlight that an organisation will perform better in competitive market if it adopts JIT practices and its managers' information needs are met by its MAS. Specifically, the results will help managers to decide when adoption of JIT practices is beneficial, thereby help prevention of suboptimal decisions and the associated costs.
Originality/value
The study challenges the inconclusive results reported in previous studies on the relationship between firms' adoption of JIT practices and financial performance and offers explanations for those results. The results show that benefits from an organisation's adoption of JIT practices are not universal. Rather, the benefits occur in situations where the use of MAS information and market competition are high.
Keywords
Acknowledgements
This research was supported by Griffith University. The authors acknowledge the helpful comments by V. Chong, D. Gadenne, Z. Hoque, C.R. Isa, E. Iselin, M. Islam, C.M. Lau and J. Sands. The authors also acknowledge the helpful comments by the participants of seminars at a number of universities in Australia and overseas. The helpful comments by the two anonymous reviewers are appreciated.
Citation
Mia, L. and Winata, L. (2014), "Manufacturing strategy and organisational performance: The role of competition and MAS information", Journal of Accounting & Organizational Change, Vol. 10 No. 1, pp. 83-115. https://doi.org/10.1108/JAOC-10-2011-0048
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited