Strategy, strategic management accounting and performance: a contingency perspective

Purpose The purpose of this study is to examine the role of strategic management accounting (SMA) in facilitating strategic decisions and organizational performance. Drawing on contingency theory, the authors examine how two elements of the decision support system for strategic decisions – managerial reliance on SMA and accountants’ involvement in strategy processes – mediate the relationship between three distinct organizational strategic choices (strategy deliberation, market orientation and nonfinancial priorities) and organizational performance. Design/methodology/approach The study uses a cross-sectional survey design. The proposed conceptual model is tested with partial least squares structural equation modeling analysis on a sample of 138 Czech firms. Findings Support is provided for four of the six hypothesized mediation effects. The test of simple mediation reveals that managerial reliance on SMA positively mediates the relationship between two strategic choices (strategy deliberation and nonfinancial priorities) and performance, but not for the strategic choice of market orientation. The same pattern of mediation effects was also observed for serial mediation. Practical implications Firms pursuing deliberate strategies and nonfinancial priorities can benefit from involving accountants in strategy processes and from managers relying on information gathered through SMA. These decision support system elements collectively enhance decision quality and, in turn, improve performance. Originality/value The study advances SMA literature in two important ways. First, it introduces a novel SMA construct – managerial reliance on SMA – which adopts the perspective of information users rather than information preparers, unlike prior conceptualizations. Second, it advances a contingency model of SMA by theoretically proposing and empirically demonstrating that SMA is a powerful mediator between strategic choices and performance.