How strategic management accounting enhances firm performance: the mediating effect of decision-making quality

This study investigates how Strategic Management Accounting (SMA) contributes to firm performance, emphasizing the mediating role of decision-making quality. Grounded in Contingency Theory, the Resource-Based View, and Information Processing Theory, the research develops and tests a model linking SMA practices, decision-making quality, and firm outcomes. Data were collected from 150 small and medium-sized manufacturing enterprises (SMEs) in Makassar, Indonesia, using a structured survey and analyzed with Partial Least Squares Structural Equation Modeling (PLS-SEM). The results demonstrate that SMA has a significant positive effect on both decision-making quality and firm performance. Decision-making quality itself strongly enhances performance and partially mediates the SMA–performance relationship. These findings suggest that SMA functions not only as a provider of strategically relevant information but also as a resource that strengthens managerial decision-making processes. Theoretically, the study enriches the strategic management accounting literature by clarifying the causal pathway through which SMA creates value. Practically, it highlights the importance for SME managers and policymakers to promote SMA adoption and to invest in developing decision-making competencies. The study concludes that SMA drives firm performance through both direct and indirect mechanisms, with decision-making quality acting as a critical conduit.