mopdf.com

Innovative management accounting practices for sustainability 18011all over the globe are initiating strategies to safeguard the development of a vibrant SMEsector to promote their sustainability (Olalekan & Jumoke, 2017). Hence, SMEs have comeunder the spotlight among management accountants and scholars all over the globe (Ayub,2018; Johnson & Schaltegger, 2016).2.2  Management accounting practices (MAPs)Technological advancement is causing complex change across the globe hence; enterprisesare susceptible to change (CIMA, 2014: 1; Neziraj & Shaqiri, 2018: 22). Currently, largeenterprises and SMEs are competing to be the most innovative in the twenty-first century.The idea of long-standing economic improvement is being challenged as both the capacityand speed of data delivery escalate (CIMA, 2014: 2; Neziraj & Shaqiri, 2018: 22). Mostimportantly, enterprises are doing more to react correctly to emerging risks and defendtheir created economic values when information is not abundant, difficult or demand complex technology to interpret (CIMA, 2014: 6; Matsoso & Benedict, 2014: 248; Neziraj& Shaqiri, 2018). Against this backdrop, MA is more relevant than ever and in general,is defined as a system that identifies, measures, evaluates, accumulates, analyses, prepares, and interprets data to assist management in decision-making to achieve the enterprise’s objectives (Ahmad & Leftesi, 2014; Radović-Marković & Vučeković, 2015: 186;Drury, 2018). Drury (2018) argues that MAPs deal with the provision of information toimprove the enterprise’s internal decision-making, performance and efficacy in the enterprise’s strategy. MAPs enable forward-looking internally and creates structured answers tounstructured problems, enables enterprises to gather information that ensure strategic decisions are reached and reported meritoriously (CIMA, 2014: 3; Neziraj & Shaqiri, 2018).Therefore, MAPs may be suitable to be integrated into manufacturing SMEs strategies tofacilitate effective decision-making towards sustainability.The need for MAPs to be integrated is that, MAPs create sustainable values throughsound decision-making by ensuring complete analysis of data to support SMEs to evaluate, plan, coordinate, and control the implementation of their strategies (CIMA, 2014: 5).Furthermore, MAPs facilitate the accessibility of appropriate and correct information toback enterprise’s activities for effective decision-making. Hence, SMEs’ sustainability andlong-term value will be created for stakeholders (CIMA, 2014: 6; Neziraj & Shaqiri, 2018).Rufino (2014) argues that the adoption of innovative MAPs by enterprises to counterenvironmental and social changes was stimulated by the global crises facing enterprises.MAPs are business practices, which may assist enterprises to create value with sustainabledevelopment through the technical skills of management accountants (Nuhu et al., 2016).Through training, management accountants develop special knowledge to uniquely placethem to contribute to enterprises’ sustainability (Prowle & Lucas, 2016). Innovative MAPsproduce evidence-based reports to solve management problems such as costing, risk andvalue analyses in enterprises’ strategy and provide data justification (CIMA, 2014; Sharma,2015). Amara and Benelifa (2017) argue that innovative MAPs harmonised the internaland external factors of enterprises. Furthermore, it also assists management accountantsto collect, evaluate and analyse available data and develop scenarios to project alternativeoutcomes that may benefit the enterprise’s objectives in the context of social and environmental factors (Namazi, 2013). This data flow is shown in Fig. 1.Figure 1 supports Rufino’s (2014); and Matambele and van der Poll’s, (2017) argument that MAPs are accounting practices that support management decision-making13

18012S. N. Nartey, H. M. van der PollFig. 1  Management accounting information flows. Source: CIMA (2014:6)internally based on economic, monetary and non-monetary data generation. Hence,MAPs assist decision-making which might promote manufacturing SMEs sustainability.2.3  Management accounting changeThe most important challenge confronting enterprises in this technology age is the process of acquiring the right mix of data to plan cost of production, quality and timerelated activities in enterprises (Matsoso & Benedict, 2014). According to Shah et al.(2011), traditional MAPs identified in RSQ1 (Fig. 3) is inadequate to provide the necessary information in this twenty-first century. They argue that traditional MAPs focuseson the past, are too narrow and mislead managers to plan, evaluate and control decisionmaking of enterprises in the emerging era when planning, evaluating and controlling.The reason being that these MAPs focus on expired information (reports on transactions that have already taken place and not what is expected). Moreover, Ramljak andRogošić (2012) argue that the emphasis of traditional MAPs also neglects the environmental issues where management decisions are taken and integrated into an enterprise’sstrategy as a major weakness in the 21st-century business contextualisation. Accordingto Amara and Benelifa (2017), many factors influence the change in MA within enterprises. They argue that environmental uncertainty, structures, size, activities, marketcompetition, technology, design, information complexity and strategies are drivers ofchange in enterprises. According to Ntalamia (2017), such changes may originate owingto diverse factors in the economic and cultural environment. As a result, some studies focus on changes in MAPs (Alleyne & Weekes-Marshall, 2011; Tuanmat & Smith,2011; Sunarni, 2013:616). Furthermore, IoDSA (2016:14) argues in the King IV reportthat the economic business environment has changed with the advent of fast-movingtechnology’s influence on the strategic activities of enterprises. Hence, manufacturingSMEs may need to change from traditional MAPs to innovative MAPs that may providethem with the necessary tools to compete effectively in the twenty-first century.The next section discusses the environmental and social MAPs changes.13

18013Innovative management accounting practices for sustainability 2.4  Environmental and social changes in management accounting practicesGlobal competition may be leading all enterprises towards reformed obligations, high levels of operational excellence and competitiveness (Dubihlela & Rundora, 2014:27; Smith,2015:76; Hamann et al., 2017). With economic instability, Annandale (2013:54) andHamann et al. (2017) enquired how SMEs can benefit from sustainability. To answer this,it is argued in this article that by integrating innovative MAPs into SMEs’ strategy, management would be able to identify environmental, social, and economic strengths, weakness, opportunities and threats (SWOT) during decision-making. Innovative MAPs as seenin enterprises in the twenty-first century involve environmental and social changes, emanating from enterprises’ change prompted by a new interest in practices relating to sustainability. This rise of innovative MAPs attracted the attention of various scholars (Ahmad,2017; Ahmad & Zabri, 2016; Azudin & Mansor, 2017; Bonvoisin et al., 2017; Maziriri &Mapuranga, 2017; Nair & Nian, 2017; Nuhu et al., 2016; Prowle & Lucas, 2016). Thesescholars have mainly been evaluating which MAPs such as costing, budgeting, planning,pricing and performance strategies in enterprises have changed to embrace environmentaland social issues (Cuzdriorean, 2017; Nair & Nian, 2017; Rufino, 2014; Uyar, 2010). Theirstudies identify the changes to comprise environmental strategies, health and safety strategies, legal regulations, inclusive total quality management (TQM), and sustainable development. Furthermore, the scholars argue that environmental strategic prospects are identified in the process of integrating, that is, environmental technology, energy conservationstrategy, products design, market packaging, and recycling. These activities demand innovative MAPs to evaluate strategic cost/benefits analysis, alternative cost savings scenario’s, full life-cycle costing (LCC), activity-based costing (ABC), reports on waste control,investment appraisals, management control and performance evaluation (Biernacki, 2015;Ntalamia, 2017; Nucci et al., 2016; Testa et al., 2011). For instance, innovative MAPsmight identify, measures and link environmental and social accounts to capital budgeting(Ndwiga & van der Poll, 2013; Nuhu et al., 2016). Therefore, innovative MAPs may beviewed as those practices that support internal management to perform their function ofplanning, controlling, decision-making, evaluation, and long-term strategic development.According to Biernacki (2015), innovative MAPs are not necessarily seeking theabolishment of traditional MAPs, however, it is more of the integration of environmental and social practices into MA. Hence, Namakonzi and Inanga (2014); and Maziriri andMapuranga (2017:20) argue that innovative MAPs are holistic concepts, which combineenvironmental and social activities and integrates them into enterprises’ strategy to assistenvironmental and social costs’ identification and the measurement of production efficiency. These main functions relate to human, social, economic, and environmental aspectswhich manufacturing SMEs should report (Arena & Azzane, 2012; Lemus, 2016).From an environmental viewpoint, SMEs are known to be irresponsible, owing totheir limited knowledge of MAPs (Ramli & Ismail, 2013; Mat et al., 2018, Ngibe &Bingwa, 2020). As a result, there may be a need for regulatory agencies to be careful when designing frameworks and regulations to ensure that such policies promotebenefits for SMEs’ involvement in environmental and social sustainability (Jamilet al., 2015; Nair & Nian, 2017:182). According to Vandayar (2015:54) and Smith(2015), corporate governance philosophies are not only responsible for the survivalof large enterprises; SMEs can also benefit from integrating such strategies that reinforce professional behaviour. Stubblefield et al. (2010) argue that the major reasonfor SMEs to adopt innovative MAPs is not the leading edge, however, it is since the13

18014S. N. Nartey, H. M. van der Pollplanet matters to them. As MAPs change to accommodate social and environmentalimpacts of enterprises in management accounting, manufacturing SMEs may standa chance to effectively protect the environment, which supports their existence toachieve sustainability through the integration of innovative MAPs.3  Research methodologyThe method employed in this research involved a systematic literature review. This is considered appropriate in order to address the research problem. Marshall and Rossman (2014)advocate that the researcher should firstly consider data analysis issues pertaining to theresearch and secondly, processes of analysing conceptual qualitative data begins at themoment data is collected and proceeds thereafter (Creswell, 2014). Hence, the researchersconsidered the research questions and decided to conduct a systematic literature review.The researchers opted to use desktop research as a tool to collect the necessary literatureto answer the questions. The Unisa Library was used to search for all the necessary frameworks, publications, and articles on MAPs, SMEs and theoretical frameworks globally.3.1  Data collection processDuring this data collection process 350 articles were identified using the followingkeywords: Innovative management accounting practices;Management accounting;Management accounting change;Environmental and social accounting change;Sustainability accounting;Sustainability management accounting;Innovative management technology;Environmental management accounting;Environmental management system; andSocial accounting.The researchers deemed it appropriate to adopt the philosophy of Creswell (2014), andWouters et al. (2016) to track subject concepts and data from a wide range of literaturethrough which the following articles were rejected: Articles that only mentioned MAPs briefly, however, the content was misaligned withthe scope of this research. Articles that mentioned MAPs, however, it was articles referred to in the reference list. Articles where MAPs were not mentioned at all (that is, the article pops up due to asearch term as a result of words in phraseology or at the end, or due to another language –connected context or the abbreviation of the MAPs however a different connotation). Articles which are antecedent of alternative articles with less data important to theresearch.13

Innovative management accounting practices for sustainability 18015 Articles that were an introduction to another article or merely constituted a brief systematic literature review or an abstract of successive articles.The screening identified 60 articles suitable for analyses. The conceptual data collection process requires an interactive stable movement of concepts and data, and related continuous procedures across all indications to regulate the level and scope evolved in data(Creswell, 2014). The following data collection processes were adopted: Mapping of data routes;Analysing and classifying the identified data;Recognising and coding of concepts;Deconstructing and sorting of concepts;Integrating and re-integrating concepts;Synthesising, and re-synthesising to make sense out of them all;Establishing credibility, transferability and conformability of concepts; andRe-thinking of the concepts and frameworks.3.2  Data analysisA thematic analysis was used in this qualitative study. This choice was justified by thearguments of the under-mentioned scholars. Bryman and Bell (2015) define thematic analysis as a method that analyses documents and scripts to enumerate content relating to prearranged groupings, methodical and in a replicable manner. The major practice of thematicanalyses comprises coding the collected data in order to identify a qualitative data set foranalyses (Cooper & Schindler, 2014). Furthermore, Saunders et al. (2016) propose three(3) main sources to derive names for coding: Using terms that appear in data; Actual terms used by study participants; and Terms used in existing literature.The thematic data were derived from existing literature. The researchers considered it asuitable approach to use a thematic analysis to understand the meaning and the content ofthe MAPs literature. The qualitative data coding and analyses software of Atlas.ti was usedto synthesise data from the identified MAPs literature.3.3  Trustworthiness of the studyBashir et al. (2008:38) argue that a paradigm is a worldview that bridge ontology, epistemology, axiology and the quality of a social study completed within a paradigm mustbe judged by its own paradigm’s terms. Centred on the perception of various constructedrealities, it is more vital for qualitative research to demonstrate that its findings are credible, transferable and conformable as follows: Credibility To certify the credibility, the researchers ensured that the literature used inthe research were predominantly from peer-reviewed published articles. Transferability To ensure transferability, the researcher compared MAPs literature fromdifferent settings and continents.13

18016S. N. Nartey, H. M. van der Poll Confirmability An audit trail was left when the researchers discussed the details of theprocess of data collection, data analysis, and interpretation of the data. Dependability Other researchers have enough information to replicate the research andobtain similar findings.4  Data analysisInnovative MAPs provide management with information for internal solutions. The problem is how to identify specific innovative MAPs that manufacturing SMEs can integrateinto their strategies to achieve sustainability. In this research, the researchers employedfigures and tables to make conclusions meaningful to communicate and answer the mainresearch question:Which innovative MAPs can be integrated into manufacturing SMEs’ strategy toachieve environmental and social sustainability?To answer the main research question, the research sub-questions (RSQ) were answerednext.RSQ1: What are the traditional and innovative MAPs that manufacturing SMEs canintegrate into their strategy?To answer RSQ1, the data analysis identified traditional and innovative MAPs generallyemployed by manufacturing SMEs as depicted in Fig. 2.The researchers have been able to identify MAPs from synthesised and reviewed articles and have categorised them into traditional and innovative MAPs as shown in Fig. 2 tosimplify understanding.RSQ2: 0Which innovative MAPs have environmental, social and sustainable development impacts on manufacturing SMEs’ decision-making?To answer RSQ2, the data analyses revealed that for manufacturing SMEs to cope withchanges in time and modern technology, strategies have to be integrated with MAPs thatprovide management with all-round information to deal with enterprises’ environmentaland social impacts (Ghorbel, 2016), since innovative MAPs relate to providing solutionsto management internally (Nuhu et al., 2016). Managing environmental impacts of enterprises involves the control of environmental and social effects of enterprises’ actions andtheir effects on the ecosystem (ISO14004, 2016; Bebbington & Unerman, 2018). Ntalamia(2017:6) argues that to avoid manufacturing SMEs incurring high environmental and socialcosts, they may need to integrate innovative MAPs to reduce such costs. Though manyinnovative MAPs were identified in Fig. 3, the study considers innovative MAPs that maypromote manufacturing SMEs’ sustainability as MAPs which may impact the decisionmaking of SMEs regarding the environment, society and sustainable development. Hence,the innovative MAPs for sustainability are MAPs that can impact decision-making on thethree (3) footprints of manufacturing SMEs’ strategies as presented in Fig. 3.13

18017Innovative management accounting practices for sustainability MANAGEMENT ACCOUNTINGTRADITIONAL MAPsCos ng Variance AnalysisCapital Budge ngAc vity Budge ngMaster Budge ngZero-Based Budge ngCash FlowPerformance Cos ng Standard Cos ngRelevant Cos ngAc vity Based Cos ngAbsorp on Cos ngVariable Cos ngProcess Cos ngJoint Cos ngBy-Product Cos ngJob Cos ngBudge ng INNOVATIVE MAPsInternal Rate of ReturnEconomic Value AddedCapital InvestmentAppraisal MethodsCost of QualityProduct Life Cycle Cos ngTarget Cos ngKaizen Cos ngMaterial Flow Cos ngEnvironmental CostManagementBudge ng Ac vity Based Budge ngEs ma on and Incremental CostBudge ngTarget Cost Budge ngMaterial Flow Budge ngPerformance BenchmarkingValue Chain AnalysisProduct Profitability AnalysisCustomer Product AnalysisEconomic Value AnalysisDecision-MakingDecision-Making Cost-Value-Profit AnalysisMargin of SafetyMul -Product AnalysisPrice Decision MakingTotal Quality ManagementBack Flush AnalysisAc vity Based ManagementRelevant Cos ngStrategic AnalysisStrategic Analysis Probability AnalysisRisk and UncertaintyCapital Investment AnalysisStakeholder Value AnalysisBalanced Score CardValue AnalysisFunc onal AnalysisMaterial Flow AnalysisFig. 2  Traditional and innovative MAPs (Authors’ own)13

S. N. Nartey, H. M. van der Poll18018INNOVATIVE MAPsEnvironmental impactsSocial impactsSustainable developmentimpacts ABC/B ABC/B ABC/B PLCC PLCC PLCC TQM TQM TQM EC EC EC TC TC TC KC KC KC VA/VE VA/VE VA/VEFig. 3  Sustainability MAPs (Authors’ own)In Fig. 3 the data analysis has identified seven (7) innovative MAPs which cutacross all three (3) footprints, namely: Activity base costing/budgeting (ABC/B)Product lifecycle costing (PLCC)Total quality management (TQM)Environmental costing (EC)Target costing (TC)Kaizen costing (KC)Value analysis (VA)These seven (7) innovative MAPs will be discussed in the findings section.5  FindingsTo conclude this research, the innovative MAPs identified from the data analyseswhich may assist manufacturing SMEs to protect the environment and society whenintegrated into their strategies to achieve sustainability are therefore discussed next.13

Innovative management accounting practices for sustainability 180195.1  Activity‑ba

The environment in which manufacturing small and medium enterprises operate has become very complex, and therefore manufacturing SME's owners need to be aware of the impact their decisions have on the environment and society. The aim of the research was to identify which innovative management accounting practices can be integrated into manu-