UNIVERSITY OF GHANA COLLEGE OF HUMANITIES STRATEGIC MANAGEMENT ACCOUNTING PRACTICES AND FIRM PERFORMANCE: THE MODERATING ROLE OF ENVIRONMENTAL UNCERTAINTY AND ECONOMIC CRISIS BY STEPHEN KWEKU ACKON (10875783) THIS THESIS IS SUBMITTED TO THE UNIVERSITY OF GHANA, LEGON IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF A MASTER OF PHILOSOPHY (MPHIL) IN ACCOUNTING DEGREE JUNE, 2023 University of Ghana http://ugspace.ug.edu.gh i DECLARATION I, Stephen Kweku Ackon, do hereby declare that this research study is my work undertaken at the University of Ghana, specifically; the University of Ghana Business School. Also, the study has not been published by anyone else before, and neither has it been approved for a degree at this university or any other university. Nonetheless, all prior research studies and references used in my work were duly acknowledged. I, therefore, declare that I am solely responsible and accountable for any material or marginal shortcomings of this study. 25th October, 2023 ……………………………………. …...………………………... STEPHEN KWEKU ACKON DATE (10875783) University of Ghana http://ugspace.ug.edu.gh ii CERTIFICATION I hereby certify that the preparation and presentation of this research work were supervised in conformance with the guidelines stipulated by the University of Ghana. 25th October, 2023 ……………………………………. ………………………… DR. TEDDY OSSEI KWAKYE DATE (SUPERVISOR) 25th October, 2023 …………………………………….. ………………………… DR. EDWARD NARTEY DATE (SUPERVISOR) University of Ghana http://ugspace.ug.edu.gh EDWARD Stamp iii DEDICATION I am humbled and privileged to dedicate this work to the Almighty God and my supportive family in appreciation of their assistance toward the successful completion of my program. Again, to my parents for shaping me to believe that there is nothing great that can be accomplished without perseverance, sacrifice, and hard work; yet with humility and favour coupled with God's grace and mercies, I can accomplish my goals and aspirations. University of Ghana http://ugspace.ug.edu.gh iv ACKNOWLEDGEMENT A renowned scholar Alfred North Whitehead in a quote stated, “No one who achieves success does so without acknowledging the help of others, the wise and confident acknowledge this help with gratitude”. Likewise, I say: To God be the Glory, for great and mighty things the Lord has done and continues to do, however, my words cannot express how grateful I am to the Almighty God for His guidance and protection throughout my program of study. I would like to also express my heartfelt gratitude to my supervisors, Dr. Teddy Ossei Kwakye and Dr. Edward Nartey, for their time and assistance in diverse capacities, which yielded insightful contributions from the beginning of the project to its successful completion. The study has benefited greatly from their significant contributions, and without their support, the completion of this thesis would not have been possible. In addition, I would like to express my utmost gratitude to all the lecturers, staff, and other stakeholders of the Accounting Department of the University of Ghana Business School for their advice, criticisms, and constructive comments on the study. Furthermore, I would like to express my gratitude to Eugene, Henry, Miriam, Charlotte, and all my colleagues for their enormous contributions in several capacities towards the completion of this program. Also, I owe a great deal of gratitude to my parents, relatives, and friends for their kindness, prayers, support, and words of inspiration. Without your help and prayers, I would not have been able to accomplish this feat. I am grateful. Again, to all my study respondents who, out of their busy schedules, made time to fill out my questionnaire, I say thank you. University of Ghana http://ugspace.ug.edu.gh v TABLE OF CONTENTS DECLARATION ........................................................................................................................ i CERTIFICATION ..................................................................................................................... ii DEDICATION ......................................................................................................................... iii ACKNOWLEDGEMENT ........................................................................................................ iv TABLE OF CONTENTS ........................................................................................................... v LIST OF FIGURES .................................................................................................................. xi LIST OF TABLES ................................................................................................................... xii LIST OF ABBREVIATIONS ................................................................................................ xiii ABSTRACT ............................................................................................................................. xv CHAPTER ONE ........................................................................................................................ 1 INTRODUCTION ..................................................................................................................... 1 1.1 Overview of Chapter ........................................................................................................ 1 1.2 Background of the Study .................................................................................................. 1 1.3 Problem Statement ........................................................................................................... 6 1.4 Research Objectives ....................................................................................................... 10 1.5 Significance of the Study ............................................................................................... 10 1.6 Organisation of the Study ............................................................................................... 12 1.7 Chapter Summary ........................................................................................................... 12 CHAPTER TWO ..................................................................................................................... 13 LITERATURE REVIEW ........................................................................................................ 13 2.1 Introduction .................................................................................................................... 13 University of Ghana http://ugspace.ug.edu.gh vi 2.2 The Concept of Strategic Management Accounting ...................................................... 13 2.2.1 Dimensions of SMA .................................................................................................... 17 2.2.1.1 Management accountants’ participation in strategic decision making ..................... 18 2.2.1.2 Strategic management accounting techniques .......................................................... 22 2.2.2 Adoption and Benefits derived from using SMA........................................................ 30 2.3 Firm performance ........................................................................................................... 35 2.3.1 Measures of Firm performance ................................................................................... 37 2.3.2 Determinants of Firm performance ............................................................................. 39 2.4 Environmental uncertainty ............................................................................................. 41 2.5 Economic crisis .............................................................................................................. 44 2.6 Small and Medium-sized Enterprises (SMEs) ............................................................... 48 2.6 Theoretical review .......................................................................................................... 52 2.6.1 Contingency theory ..................................................................................................... 52 2.6.2 Factors that influence the design of SMA ................................................................... 54 2.7 Empirical review ............................................................................................................ 59 2.7.1 SMA and Firm performance ....................................................................................... 59 2.7.2 SMA, Environmental uncertainty, and Firm performance .......................................... 60 2.7.3 SMA, Economic crisis, and Firm performance ........................................................... 62 2.8 Conceptual Framework and Hypothesis Development .................................................. 65 2.8.1 Conceptual framework ................................................................................................ 65 2.8.3 Hypothesis Development ............................................................................................ 65 University of Ghana http://ugspace.ug.edu.gh vii 2.8.3.1 SMA Usage and firm performance .......................................................................... 65 2.8.3.2 The moderating role of environmental uncertainty and economic crisis ................. 68 2.8 Chapter Summary ........................................................................................................... 71 CHAPTER THREE ................................................................................................................. 72 METHODOLOGY .................................................................................................................. 72 3.1 Introduction .................................................................................................................... 72 3.2 Research Design ............................................................................................................. 72 3.3 Study Population, Unit of Analysis, Data and Sample Size........................................... 73 3.3.1 Unit of analysis............................................................................................................ 73 3.3.2 Study location .............................................................................................................. 74 3.3.3 Sampling technique ..................................................................................................... 74 3.3.4 Sample size .................................................................................................................. 77 3.3.5 Source of Data ............................................................................................................. 78 3.3.6 Study respondents ....................................................................................................... 80 3.4 Data Collection Instrument ............................................................................................ 80 3.5 Instrument Measurement Scale ...................................................................................... 81 3.6 Questionnaire Validity/ Pilot Testing ............................................................................ 84 3.7 Data Analysis ................................................................................................................. 85 3.8 Descriptive Statistics ...................................................................................................... 85 3.9 Structural Equation Modelling (SEM) ........................................................................... 85 3.9.1 Covariance-Based Structural Equation Modelling (CB-SEM) ................................... 86 University of Ghana http://ugspace.ug.edu.gh viii 3.9.2 Partial Least Square- Structural Equation Modelling (PLS-SEM) ............................. 86 3.9.3 Guidelines justify the choice of SEM approach (PLS-SEM and CB-SEM) ............... 87 3.10 Measurement Theory.................................................................................................... 88 3.11 Measurement Model ..................................................................................................... 89 3.12 Assessment of Measurement Model (Outer Model) .................................................... 89 3.13 Assessing the Structural Model (Inner Model) ............................................................ 93 3.14 Ethical Considerations.................................................................................................. 95 3.15 Chapter Summary ......................................................................................................... 95 CHAPTER FOUR .................................................................................................................... 97 ANALYSIS AND DISCUSSION OF FINDINGS .................................................................. 97 4.1 Introduction .................................................................................................................... 97 4.2 Data Gathering, Handling and Coding ........................................................................... 97 4.3 Descriptive Statistics ...................................................................................................... 98 4.3.1 Demographics of study respondents ........................................................................... 98 4.3.2 Descriptive of study constructs ................................................................................. 103 4.4 Exploratory Factor Analysis......................................................................................... 106 4.5 Common Method Bias ................................................................................................. 107 4.6 Normality test ............................................................................................................... 108 4.7 Assessment of Measurement Model ............................................................................ 110 4.7.1 Indicator Reliability................................................................................................... 110 4.7.2 Internal Consistency Reliability ................................................................................ 112 University of Ghana http://ugspace.ug.edu.gh ix 4.7.3 Convergent validity ................................................................................................... 113 4.7.4 Discriminant validity ................................................................................................. 113 4.8 Structural Model Assessment ....................................................................................... 117 4.8.1 Collinearity Assessment ............................................................................................ 117 4.8.2 Coefficient of determination (R2) .............................................................................. 118 4.8.4 Predictive relevance (Q2) .......................................................................................... 119 4.8.5 Assessment of Model Fit ........................................................................................... 119 4.8.6 Path diagram .............................................................................................................. 120 4.9 Hypothesis Testing ....................................................................................................... 120 4.9.1 The relationship between SMA Usage and firm performance .................................. 121 4.10 Moderation Analysis .................................................................................................. 123 4.10.1 The moderating role of economic crisis on the relationship between SMA Usage and firm performance ................................................................................................................ 124 4.10.2 The moderating role of environmental uncertainty on the relationship between SMA Usage and firm performance .............................................................................................. 126 4.11 Chapter Summary ....................................................................................................... 128 CHAPTER FIVE ................................................................................................................... 129 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS.......................................... 129 5.1 Introduction .................................................................................................................. 129 5.2 Research Summary ....................................................................................................... 129 5.3 Summary of Research Findings ................................................................................... 129 5.3.1 SMA Usage and Firm Performance .......................................................................... 129 University of Ghana http://ugspace.ug.edu.gh x 5.3.2 SMA Usage, Economic crisis and firm performance ................................................ 130 5.3.3 SMA Usage, Environmental uncertainty and firm performance ............................... 130 5.4 Conclusions of the Study.............................................................................................. 131 5.5 Contribution of the Study ............................................................................................. 131 5.6 Recommendations of the Study ................................................................................... 133 5.7 Limitations and Directions for Future Studies ............................................................. 134 REFERENCES ...................................................................................................................... 137 APPENDIX 1: QUESTIONNAIRE ...................................................................................... 155 APPENDIX 2: GLOSSARY OF TERMS ............................................................................. 160 University of Ghana http://ugspace.ug.edu.gh xi LIST OF FIGURES Figure 2.2: The flow of Management Accounting Information .............................................. 21 Figure 2.1: The information needs of strategic management .................................................. 35 Figure 2.3: The impact of COVID-19 on the operation of firms ............................................. 47 Figure 2.4: Conceptual framework .......................................................................................... 66 Figure 3.1: Sampling approach ................................................................................................ 76 Figure 4.1: Graphical output on the direct effect of SMA Usage on firm performance ........ 122 Figure 4.2: Graphical output on the moderating role of economic crisis .............................. 125 Figure 4.3: Graphical output on the moderating role of environmental uncertainty ............. 127 University of Ghana http://ugspace.ug.edu.gh xii LIST OF TABLES Table 4.1: Demographics of the Study .................................................................................... 99 Table 4.2: Descriptive statistics of study constructs .............................................................. 100 Table 4.3: KMO and Bartlett’s Test ...................................................................................... 106 Table 4.4: Assessment of Common Method Bias .................................................................. 108 Table 4.5: Normality test result ............................................................................................. 109 Table 4.6: Indicator loadings, AVEs and CR ........................................................................ 110 Table 4.7: Cronbach Alpha, Composite Reliability and AVE ............................................... 113 Table 4.8: Fornell and Larcker Criterion of Discriminant Validity ....................................... 114 Table 4.9: HTMT Criterion of Discriminant Validity ........................................................... 115 Table 4.10: Cross loadings ..................................................................................................... 116 Table 4.11: Variance Inflation Factors (VIF) of study constructs ......................................... 118 Table 4.12: Blindfolding ........................................................................................................ 119 Table 4.13: Model fit assessment........................................................................................... 120 Table 4.14: Structural path coefficients on the impact of SMA on firm performance .......... 122 Table 4.15: Structural path coefficients on the moderating effect of economic crisis .......... 125 Table 4.16: Structural path coefficients on the moderating effect of PEU ............................ 127 University of Ghana http://ugspace.ug.edu.gh xiii LIST OF ABBREVIATIONS AGI Association of Ghana Industries AICPA American Institute of Certified Public Accountants AVE Average Variance Extracted CB-SEM Covariance Based – Structural Equation Modelling CGMA Chartered Global Management Accountant CIMA Chartered Institute of Management Accountants GDP Gross Domestic Product GEA Ghana Enterprise Agency GMAP Global Management Accounting Principles GSS Ghana Statistical Service HTMT Heterotrait- Monotrait MA Management Accounting MAI Management Accounting Innovations MAP Management Accounting Practices MAS Management Accounting System MCS Management Control System MO Market Orientation MSMEs Micro, Small and Medium Sized Enterprises OECD Organisation for Economic Co-operation and Development PEC Perceived Economic Crisis PEU Perceived Environmental Uncertainty PLS-SEM Partial Least Square Structural Equation Modelling SCM Strategic Cost Management SD Standard Deviation University of Ghana http://ugspace.ug.edu.gh xiv SEM Structural Equation Modelling SMA Strategic Management Accounting SMEs Small and Medium-sized Enterprises TMAP Traditional Management Accounting Practices TMT Top Management Team UGBS University of Ghana Business School UNIDO United Nations Industrial Development Organization VIF Variance Inflation Factors WHO World Health Organization University of Ghana http://ugspace.ug.edu.gh xv ABSTRACT Technological advancement, coupled with uncertainties such as COVID-19, has caused immense changes in the business environment. This has compelled organisations to adapt their operations to meet current demands. Consequently, it has become necessary to implement contemporary accounting practices referred to as Strategic Management Accounting (SMA). This study aims to examine the impact of SMA practices on firm performance among Small and Medium-sized Enterprises (SMEs) in Ghana; and to investigate the effect of contextual factors (perceived environmental uncertainty and perceived economic crisis) on the relationship between SMA and firm performance. A cross-sectional survey design was used to gather data from 228 SME owners and managers drawn from the databases of the Ghana Enterprise Agency and the Association of Ghana Industries. The Partial Least Square Structural Equation Modelling (PLS-SEM) approach was used in analysing the data. Findings reveal that SMA Usage has a positive significant influence on firm performance. Moreover, perceived environmental uncertainty and perceived economic crisis significantly moderate the relationship between SMA Usage and firm performance. Findings suggest that the application of SMA techniques enhances firm performance; however, this depends on the alignment of the firm’s structure with its context. The findings will help policymakers, professional bodies, and SME owners and managers to come up with strategies to help businesses decrease and mitigate the impact of uncertainties. This study is among the few that considered economic crisis in the management accounting literature, hence provides insightful avenues for further research. University of Ghana http://ugspace.ug.edu.gh 1 CHAPTER ONE INTRODUCTION 1.1 Overview of Chapter This section captures the initial chapter of the study. It provides a general overview of the current study; and gives a background for the study, which serves as a building block for identifying the research problem and how the remaining portions of the thesis is organised. 1.2 Background of the Study Over a few decades, transformations in the business models used by entities due to the dynamic business environment and technological advancement have challenged the relevance of conventional management accounting tools within management and accounting literature (Nik Abdullah et al., 2022; Ma et al., 2022; Chenhall & Moers, 2015; Pasch, 2019; Rashid et al., 2021; Zawawi & Hoque, 2010). In response to these changes, management innovations such as Strategic Management Accounting (SMA) were introduced in the 1980s. These innovations aimed to overcome the limitations of traditional management accounting, which was criticised for being internally focused. SMA is externally oriented, long-term, and places emphasis on financial and non-financial aspects in making decisions (Cadez & Guilding, 2008; Rashid, Ali & Hossain, 2020). Simmonds (1981, p. 26) conceived the term SMA as “the provision and analysis of management accounting data about a business and its competitors, for use in developing and monitoring business strategy”. Broadly, SMA places emphasis on the application of management accounting information that concerns a firm and its competitors in an attempt to aid, monitor, and unearth strategy (Kalkhouran et al., 2017). Despite the growing interest in SMA literature, there is no agreement to date on the definition of SMA since it is open to several interpretations (Cadez & Guilding, 2008; Ma et al., 2022; Nik Abdullah et al., 2022; Ojra et al., 2021; Oyewo, 2021). Nonetheless, University of Ghana http://ugspace.ug.edu.gh 2 these modern innovative management accounting tools such as SMA have attracted the attention of researchers and businesses owing to their crucial role in assisting managers to achieve their goals (Cadez & Guilding, 2008; Alamri, 2019; Doktoralina & Apollo, 2019; Oyewo, 2022). The competitiveness and survival of firms rely on the creation and implementation of resilient strategies (Bromwich, 1990), which are informed by managers' perceptions, context, and information gathered. As such, SMA holds the ability to provide managers with information to support their decisions, considering how external and future- oriented these techniques are (Hadid & Al-Sayed, 2021). The growing concern for external, social, and environmental issues surrounding an entity’s operations, such as corporate social responsibility (CSR), biodiversity, and climate change, among others, has affected how firms compete in the business environment (Yuan et al., 2020). As a result, corporate institutions have recognised the need for broad-based information that considers financial and non-financial, as well as internal and external concerns, to ease managerial decision-making (Abdullah et al., 2020; Rathwatta & Gooneratne, 2021). Globally, managers recognise the importance of embracing and implementing accounting practices that align with the firm's structure and strategy to meet stakeholder expectations (Cadez & Guilding, 2008; Chenhall & Langfield-Smith, 1998). According to Abernethy and Bouwens (2005), changes in accounting systems have the potential to provide both managers and subordinates with precise and relevant information about asset utilisation; and managers often rely on information from the accounting systems to evaluate and reward the performance of their employees. Previous studies have highlighted that the usage of Strategic Management Accounting (SMA) creates value (Abdullah et al., 2020; Abdullah & Said, 2015), promotes sustainability (Nartey & van der Poll, 2021), and improves an entity’s performance (Alamri, 2019; Hadid & Al- Sayed, 2021; Nuhu et al., 2017; Oboh & Ajibolade, 2017; Pavlatos, 2015; Petera et al., 2020; University of Ghana http://ugspace.ug.edu.gh 3 Thapayom, 2019). In addition, Doktoralina and Apollo (2019) revealed that the usage of SMA positively influenced supply chain outcomes, which improved the performance of logistics firms. Similarly, countries around the globe have advocated for innovations, as evidenced by the introduction of New Public Management (NPM) reforms within the public sector to promote effectiveness and efficiency (Nuhu et al., 2017). NPN reforms have placed a high value on getting the best possible return on the taxpayer's money and promotes transparency and accountability for outcomes. The reforms have raised expectations for public agencies to report, communicate and conduct their activities to promote accountability (Höglund et al., 2021; Nuhu et al., 2017). This denotes that the concept of SMA is crucial for all businesses, regardless of size and what it deals in. According to Pavlatos (2015), the information provided by SMA has the potential to help managers cope with complexities in the environment. Pavlatos and Kostakis (2018a) argued that environmental uncertainty presents severe issues such as political turmoil, cashflow problems and a reduction in demand and available resources. Hoque (2004) added that during periods of high uncertainty, managers should employ more non-financial measures since they can satisfy the demands of management on how to assess uncertainty in diverse areas, including market demand, employee and customer satisfaction, supplies, and innovation, among others. However, the current economic environment, surrounded by uncertainties and other factors in the business environment, often shapes a firm’s operations. A firm’s ability to survive and prosper depends on the firm’s ability to understand its business environment (Agyapong et al., 2020; Duncan, 1972). Studies suggest that the emergence of COVID-19 was not anticipated and led to a crisis that affected the global scene (Bedford et al., 2022; Hoque et al., 2022; Uzir et al., 2022). For instance, a report by the United Nations (UN) in 2021 showed that the global output decreased by 4.3% in 2020, which constitutes over three times what transpired during the global financial crisis in 2009 (Bedford et al., 2022). University of Ghana http://ugspace.ug.edu.gh 4 Owing to this, the contingency approach invokes managers to continually adapt their processes and structures to the environment in which they are situated in order to stay relevant (Afifa & Saleh, 2021; Cadez & Guilding, 2008). Notably, entities (whether small or large) that fail to adopt new mechanisms (such as innovative management accounting techniques) stand the chance of having an unsustainable competitive advantage (Nartey & van der Poll, 2021; Ojra et al., 2021). Pavlatos and Kostakis (2018a) argued that firms need to adopt and implement management innovations such as SMA to legitimise their firm’s survival. Prior literature suggests that, unlike Traditional Management Accounting Practices (TMAP), the use of management innovations like SMA techniques assists firms in strategic pricing, competitor performance appraisal, customer-oriented initiatives, and competitive position monitoring (Rashid et al., 2021; Roslender & Hart, 2003). Baines and Langfield-Smith (2003) highlighted that TMAP were unable to supply management with vital information to meet the demands of the changing business environment that heavily relies on innovative technologies. In addition, the conventional practices are internally oriented, fail to adjust performance indicators to changing trends, lack goal congruence, and use general procedures for situations that require custom-designed techniques (Oyewo, 2021). For this reason, managers, have directed attention towards adopting and implementing SMA in an attempt to create value and sustain their competitive edge (Ma et al., 2022). The use of SMA techniques may be affected by various internal (e.g., organisational structure, firm size, strategy, market orientation) and external (e.g., market competition, market turbulence) contextual factors despite its advantages over TMAP (Oyewo, 2022; Rashid et al., 2021). Although it has been shown that several contextual factors influence SMA adoption and implementation, empirical findings have been inconsistent (e.g., Al-Mawali, 2015; Cadez & Guilding, 2008; Nuhu et al., 2017; Pavlatos & Kostakis, 2018b; Turner et al., 2017). For instance, while Cadez and Guilding (2008) find no association between market orientation and University of Ghana http://ugspace.ug.edu.gh 5 SMA Usage, Turner et al. (2017) report a positive association between hotel market orientation strategy and SMA Usage. Al-Mawali (2015) and Abdel-Kader and Luther (2008) demonstrate a positive relationship between PEU and SMA Usage, which contradicts the negative association found by Williams and Seaman (2002). Furthermore, the findings by Cadez and Guilding (2008) showed a positive correlation between strategy and SMA Usage; and Cescon et al. (2019) found that differentiation strategy is positively associated with brand valuation. On the contrary, Abdel-Kader and Luther (2008), find no relationship between competitive strategy and the level of sophistication of an entity's management accounting system. Arguably, environmental factors are crucial in MA studies however only a few studies have looked at environmental uncertainty as a factor influencing the design of management innovation (such as SMA) (e.g., Al-Mawali, 2015; Cescon et al., 2019; Agbejule, 2005). Nonetheless, the results on the impact of environmental uncertainty on the design and usage of SMA techniques have been mixed. The usage of SMA in the context of SMEs is unique and worthy of research attention (Kalkhouran et al., 2017; Ma et al., 2022). SMEs play a unique role in the provision of employment, entrepreneurship, innovations, poverty alleviation, and economic growth entirely (Oduro, 2020; Amidu et al., 2011; Abor & Quartey, 2010). For instance, the Organization for Economic Co-operation and Development (OECD) reported that, on average, about 99% of firms are SMEs, contributing about two-thirds of the world’s GDP (OECD, 2017). A similar perspective is held about SMEs situated in Ghana (SME Competitiveness Report, 2016). Based on the contributions SMEs offer, it may be argued that an emerging economy like Ghana would possess a vibrant SME sector, but the reality is that most SMEs are having issues with long- term survival (Abor & Quartey, 2010). Notably, access to credit facilities, inappropriate accounting practices, scarce resource allocation, globalization, and technology have been cited as major challenges facing SMEs (Abor & Quartey, 2010). Moreover, according to the World University of Ghana http://ugspace.ug.edu.gh 6 Bank in 2023, about 600 million jobs will be needed by 2030 to meet global growing demands, which makes the development and survival of SMEs a priority for nations around the globe. Consequently, SMEs need to pay attention to management accounting practices and there have been calls from prior studies to examine the usage of SMA techniques among SMEs (Ma et al., 2022; Petera & Šoljaková, 2020; Kalkhouran et al., 2017). 1.3 Problem Statement The dynamic nature of the business environment has significantly affected managerial decision-making in pursuit of competitiveness within the current global economy (Oboh & Ajibolade, 2017; Oyewo, 2022). For instance, the fourth industrial revolution, the COVID-19 pandemic, changes in client demands, and climate change have imposed substantial challenges in addressing the information needs of various stakeholders (Rashid et al., 2021). As a result, executives are unable to critically evaluate and understand their environment, hence hindering firms from achieving their goals and ultimately surviving (Hoque, 2004; Sniazhko, 2019). As stressed by Sniazhko (2019), the difficulty in dealing with these uncertainties restricts effective decision-making and necessitates the adoption of strategies that either decrease or manage uncertainty. Notwithstanding, there is a controversy over the best management accounting practice (conventional or modern) that will help firms manage these complexities (Jaradat et al., 2021). While Jaradat et al. (2021) suggest complementing modern approaches with traditional management practices, Ojra, Opute and Alsolmi (2021) assert that achieving optimal output involves relying on proactive and sophisticated management accounting techniques (e.g., SMA techniques) for effective decisions. Nevertheless, it is still unclear whether the usage of SMA will enhance the performance of SMEs since the existing literature on SMA remains both disparate and disjointed (Ma et al., 2022; Jaradat et al., 2021; Rashid et al., 2021). University of Ghana http://ugspace.ug.edu.gh 7 Moreover, despite the growing importance of SMA in a variety of markets around the world, the focus of prior literature has been predominantly on large enterprises (Rashid et al., 2021; Ojra et al., 2021). However, SMEs possess distinct attributes compared to larger firms, which have been acknowledged in existing literature (Ma et al., 2022; Jaradat et al., 2021; Kalkhouran et al., 2017). SMA practices have the potential to significantly benefit SMEs in terms of their expansion, survival, and growth. For instance, SMEs are often entangled with resource constraints, and greater reliance on SMA can lead to optimal resource allocation, cost reduction and value creation (Abdullah et al., 2020). Given that previous studies have established the need for SMEs to have access to current and pertinent information for competitiveness within a dynamic business environment and to counter knowledge leakage (Ma et al., 2022; Kalkhouran et al., 2017), more research is required to address the issue of whether SMEs use SMA in practise (Kalkhouran et al., 2017; Ma et al., 2022) and further elucidate the role of SMA in enhancing SMEs' performance. A review of the Management Accounting (MA) literature revealed that there is a paucity of empirical evidence on the association between management accounting systems and economic crisis, highlighting an issue worth focusing on (Becker et al., 2016; Pavlatos & Kostakis, 2015; 2018a). Pavlatos and Kostakis (2018a) and Hopwood (2009) contend that the intensity of an economic crisis influences the level of uncertainty in a firm and often poses a threat to managers involved in decision- making; hence, making management control extensively difficult. Additionally, Pavlatos and Kostakis (2015) argue that an economic crisis presents severe issues such as political turmoil, cashflow problems and a reduction in demand and available resources. The economy is a crucial aspect of the macro business environment and as such any form of crisis emerging from it has the potential to affect all aspects of a firm’s operations and beyond. Nik Abdullah et al. (2022) argued that the surfacing of COVID-19 (global pandemic) presented a predicament that affected many businesses around the globe in distinct ways resulting in a University of Ghana http://ugspace.ug.edu.gh 8 crisis. According to Bedford et al. (2022 p. 2), “the global pandemic (COVID-19) was not considered only as a global health crisis, but also an economic crisis which affected stakeholders and various entity’s performance”. Empirical evidence produced by Uzir et al. (2022) showed that the outbreak of COVID-19 increased the psychological distress of SME owners which was attributable to the fear of business loss, depression, anxiety and stress. Bedford et al. (2022) added that firms used budgeting to reduce managers’ role ambiguity and emotional exhaustion caused by COVID-19. Further, Hoque et al. (2022) showed that in an urgent crisis like COVID-19, higher educational institutions identified accounting tools and practices (such as budgeting) as a rescue plan to support their strategic decisions. Based on this notion, it can be argued that an economic crisis is likely to influence the design of accounting systems. However, to be best of the researcher's knowledge, there is no single study that examines this association; hence, this study seeks to fill the gap in prior literature by examining the impact of economic crisis (emanating from COVID-19) on the design of SMA (Nik Abdullah et al., 2022). Nonetheless, studies that have been conducted in the MA literature have mostly used PEU to measure changes in the external business environment (for example, the construct model changes in price and market volatility, economic crisis, market competition, and political instability, among others, as one). However, recent studies have shown that PEU may lack the potential role of capturing all forms of changes and volatilities. They added that economic crisis and PEU are distinct from each other and must be studied separately (Becker et al., 2016; Pavlatos & Kostakis, 2018b). For instance, an empirical study by Pavlatos and Kostakis (2018a), demonstrated that there is no statistically significant relationship between perceived environmental uncertainty (PEU) and perceived economic crisis. Depicting that PEU and perceived economic crisis are distinct from each other and should be examined separately. These findings were in line with that of Becker et al. (2016) as well as that of Janke et al. University of Ghana http://ugspace.ug.edu.gh 9 (2014). This may imply that relying on PEU to assess all kinds of uncertainty might potentially fail to capture the perceived economic crisis impact accurately and may likely present misleading results (Pavlatos & Kostakis, 2018a). Additionally, this finding could emanate from the diverse conceptualisation given to PEU (Sniazhko, 2019). Moreover, the 2008 global financial crisis and a recent surge in the COVID-19 pandemic that led to an economic crisis have heightened the interest in examining the issue of economic crisis (Hazaa et al., 2021). Theoretically, an entity’s advantage depends on the “fit” and proper alignment between the organisational structure and the operational environment (Chenhall, 2003). Accordingly, the current study argues that SMEs can enhance their performance and sustainability by designing SMA practices that align organisational structure with an entity’s context (Chenhall, 2003; Lapsley & Wright, 2004). Although several factors have been studied, Cadez and Guilding (2008) emphasize the need for further research to identify additional determinants and contingent variables to better understand the contexts in which SMA practices can be most effectively implemented. Despite growing interest, several studies in MA literature have significantly examined the role of perceived environmental uncertainty (Afifa & Saleh, 2021, 2022; Agbejule, 2005; Hoque, 2004; Pavlatos, 2015), however, that of perceived economic crisis is yet to receive attention. As a result, this study seeks to examine whether the perception held by owners and managers about the level of environmental uncertainty and the intensity of an economic crisis plays a role in explaining the association between SMA and performance. Again, most of the studies that have examined SMA and organisational performance have focused on large firms mostly in developed countries such as USA, UK, Australia, Italy, and New Zeeland, among others (Cescon et al., 2019; Cinquini & Tenucci, 2010; Nuhu et al., 2017; Rashid et al., 2021; Sumkaew & Intanon, 2020; Turner et al., 2017). Moreover, due to the differences in institutional, cultural and legal factors among nations around the globe, scholars have suggested that there is a need to examine this association in a developing country like University of Ghana http://ugspace.ug.edu.gh 10 Ghana (Rashid et al., 2020; 2021). They added that firms in developed nations operate within strong institutional and legal frameworks where prospect opportunities to conceal revenue, avoid tax, and engage in earnings management are rare since they are subject to severe penalties. As a result, firms are continuously interested in formulating strategies to optimally allocate scarce resources and control costs (Rashid et al., 2021). Against the aforementioned, this study seeks to examine the relationship between SMA Usage and performance, and further evaluate whether perceived environmental uncertainty and perceived economic crisis play a role in the design of SMA among SMEs in Ghana. 1.4 Research Objectives 1. To determine the association between SMA Usage and firm performance of SMEs in Ghana. 2. To examine the moderating effect of perceived environmental uncertainty on the relationship between SMA Usage and firm performance of SMEs in Ghana. 3. To investigate the performance implication of the moderating effect of perceived economic crisis on the relationship between SMA Usage and firm performance of SMEs in Ghana. 1.5 Significance of the Study This study makes significant contributions to literature, policy and practice. To literature, this study adds to the literature on how the perceived economic crisis and perceived environmental uncertainty may influence owners' and managers' decisions to use SMA techniques that will affect firm performance. In addition, the current study contributes to the paucity of studies on the concept of economic crisis (more of a finance-related concept) in the domains of the accounting and management accounting literature. This is in response to the calls for studies to assess the function and role of accounting during a crisis (e.g., the global financial crisis, global pandemic) (Afifa & Saleh, 2021; Hopwood, 2009; Nik Abdullah et al., 2022; Stede, 2011; University of Ghana http://ugspace.ug.edu.gh 11 Waymire & Basu, 2011; Zawawi & Hoque, 2010). Further, the emergence of COVID-19 presented a predicament on the global scene, which resulted in a health crisis and further led to an economic crisis (Bedford et al., 2022). This has necessitated calls to understand the impact of this menace; hence, this study adds to the literature on COVID-19. Surprisingly, examining this issue in the context of SMEs also contributes to the literature as most studies have focused on larger firms. In addition, considering the numerous studies in developed nations, examining the association between SMA and firm performance in Ghana provides evidence to validate findings from developed contexts in response to calls from Ojra et al. (2021), Ma et al. (2022) and Rashid et al. (2021). To practice, the findings from the current study would provide further insights for managers and businesses to help promote the effectiveness and efficiency of SMEs. Also, it would serve as a guideline to promote firms’ survival and sustained competitive edge by helping to understand their operational environment and implementing requisite practices such as SMA techniques. For instance, several other businesses, not only SMEs in Ghana (e.g., non- governmental organisations, and public agencies), would benefit from the study’s findings because executives and management will be able to grasp the techniques and resources at their disposal for operational efficiency and cost control. Moreover, to policy, the results of the study can be relied on as an instructive guide for policymakers, regulators and professional groups (such as the Chartered Institute of Management Accountants (CIMA)) hoping to improve management accounting change among companies situated in Ghana. The results of this study will also sensitize development agencies such as Ghana Enterprise Agency (GEA) and the Association of Ghana Industries (AGI), among others to the relevance of SMA techniques if they are used by companies and how they will impact their performance. More precisely, the government will be more knowledgeable about how to direct government intervention programmes meant to increase SMEs' survival to University of Ghana http://ugspace.ug.edu.gh 12 yield desired outcomes. In addition, it will serve as a foundation for professional bodies in setting up training courses, seminars, and workshops for managers and prospective employees on the efficient implementation of new management accounting procedures (e.g., SMA) that will benefit not only SMEs but also both private sector and public sector entities. 1.6 Organisation of the Study The current study is categorised under five broad constituents regarded as chapters. The initial category, thus Chapter one provides the introduction of the study, which comprises the study background, the study’s objectives, the problem statement, underlying research questions and hypothesis and the significance of the study. Chapter two captures the literature review of the study, which critically presents the theoretical and empirical review of prior studies relevant to the objectives of the study. The third chapter entails the methodology and research approaches employed to gather and analyse data to accomplish study goals; and Chapter four highlights the results and findings of the study as well as providing a discussion of the findings attained from the analyses of data gathered. In addition, Chapter five provides a summary of the findings, conclusions, limitations and recommendations of the study. 1.7 Chapter Summary This chapter captures the introduction of the study, which consists of a general brief overview of the study, a background of the study, and a problem statement, as well as provides the aims and objectives of the study. The section concludes with a discussion of the study's significance and how the research work was structured. University of Ghana http://ugspace.ug.edu.gh 13 CHAPTER TWO LITERATURE REVIEW 2.1 Introduction This chapter provides a comprehensive review of the theoretical and empirical literature that relates to this study. The chapter starts with an overview of the concept of Strategic Management Accounting (SMA), and then provides an assessment of the kinds of techniques that fall under the category of SMA and their relevance to various stakeholders and firms. It also reviews prior research studies on the associations between SMA Usage and its antecedent factors as well as firm outcomes. The chapter concludes with a discussion of the conceptual framework and the development of the study's hypothesis based on the review conducted. 2.2 The Concept of Strategic Management Accounting Management Accounting (MA) has garnered increased attention over recent years due to its crucial role in decreasing the level of stakeholder pressures and uncertainties that may likely surface (Ismail et al., 2018). MA encompasses the provision of relevant information for various stakeholders to make well-informed decisions as and when required (Al-Khasawneh et al., 2020). Shahzadi et al. (2018) highlighted the fact that accessibility to information within an entity and among the various stakeholders promotes goal achievement. According to Sniazhko (2019) and Shahzadi et al. (2018), managers who rely on MA practices to gather relevant information tend to influence the entire business system and processes regardless of the complexity of their systems and market. MA is fundamental in delivering information for diverse management functions, be it planning, controlling, evaluating or decision-making (Shahzadi et al., 2018). According to Ojra et al. (2021), MA surrounds the “generation, creation, communication, and the application of financial and non-financial information for managerial decision-making and control University of Ghana http://ugspace.ug.edu.gh 14 processes”. Broadly, the management accounting (MA) function embodies the provision of information for decision-making, which leads to improved operational activities (Hadid & Al- Sayed, 2021; Maelah et al., 2021; Nuhu et al., 2017; Shahzadi et al., 2018). However, recent modification in the business environment has emphasised the need to review Management Accounting Systems (MAS) used by entities (Azudin & Mansor, 2018; Chenhall & Moers, 2015; Ojra et al., 2021; Rashid et al., 2021; Rikhardsson et al., 2021; Yazdifar et al., 2019; Zawawi & Hoque, 2010). The growing demands from stakeholders, increased competition, and advancement in technology, among others, have affected how an entity designs and implements its business models. As a result, the information needs of managers have advanced and become more complicated; hence, the need to provide managers with systems that can continuously adapt their practices to evolving trends to complement the needs of decision-makers (Chenhall & Moers, 2015; Sniazhko, 2019). The volatility in the business environment has become best suited for organisations ready to compete aggressively in relation to quality, price and delivery of service (Oyewo, 2022). In that regard, managers will likely request more information (as shown in Figure 2.1) to supplement what they already possess. This is because, the information used by the cost structure of a firm allows it to sustain its market strategy despite competition from potential entry (Bromwich, 1990; Oboh & Ajibolade, 2017). For instance, to create value that exceeds and meets customer demands, managers will request information on efficiency, quality, as well as financial information, which the modern and innovative MA techniques regarded as SMA tend to provide. The term Strategic Management Accounting (SMA) attracted the attention of stakeholders since it was first discovered in the literature by Simmonds (1981). Also, several criticisms held up against Traditional Management Accounting (TMA) have strengthened this interest University of Ghana http://ugspace.ug.edu.gh 15 (Kalkhouran et al., 2017). For example, critics of MA note that initially accountants were primarily engrossed with internal operational activities whereas little attention was given to strategic issues such as planning and control (Bromwich, 2000: Johnson & Kaplan, 1987). TMA systems were also criticised for their lack of goal congruence and inability to adjust performance indicators to the dynamic environment. However, promoting sustained competitive advantage requires firms to modify their conventional practices in the current business environment. According to Lasyoud et al. (2018), maximising customer satisfaction at the same time as managing marketing costs is achievable through strategic planning, changes to management practices and quality management systems. Moreover, continuous shifts in stakeholder demands often challenge firms to modernize their processes (Roslender & Hart, 2003). In 1981, Simmonds introduced the term “SMA” in the UK (Simmonds, 1981) and it was later conceived as Strategic Cost Management (SCM) in the USA by Shank (1989). They both stressed the need for strategy in their engagements to attain improved outcomes and sustained competitive advantage (Rashid et al., 2021). However, despite growing interest, there seems to be no universally accepted definition ascribed to the concept of SMA signifying a pervasive argument among academics and practitioners about the best accounting practices to counter any impediments to effective decision-making. Ma and Tayles (2009), Cadez and Guilding (2008) and Nik Abdullah et al. (2022) have argued that it is challenging to define the term SMA. They emphasize that there is comparatively no broadly accepted definition of SMA. As such, the term has been understood and defined in many ways by scholars in MA literature from diverse perspectives. According to Simmonds (1981), the term SMA is “the provision and analysis of management accounting data about a business and its competitors for use in developing and monitoring business strategy” (p. 26). However, Govindarajan and Shank (1992) and Johnson and Kaplan University of Ghana http://ugspace.ug.edu.gh 16 (1987) added that emphasis on costing information and value chains should take a long-term and external orientation. Lord (1996) asserts that SMA “emphasizes an extension of traditional management accounting focus to include external information about competitors". According to Bromwich (1990, p. 28), SMA constitutes “the provision and analysis of financial information on the firm’s product markets and competitors’ costs and cost structures and the monitoring of the enterprise’s strategies and those of its competitors in these markets over several periods.” Conversely, Roslender, (1995) observed the concept as an amalgamation of diverse functions in gaining a strategic position in the market. Likewise, Ma and Tayles (2009) conceived SMA as a concept that viewed accounting experts from a distinct perspective, suggesting a wider contribution of accountants towards the formulation and execution of strategies. According to Roslender and Hart (2003), SMA is “identified as a generic approach to accounting for strategic positioning, by urging attempts to integrate insights from management accounting and marketing management within a strategic framework”. However, Tillmann and Goddard (2008) and Langfield-Smith (2008) added that SMA is “a management accounting system that supports strategic decisions”. According to Hoque (2004), SMA is examined as “a process of identifying, gathering, choosing and analysing accounting data for helping the management team to make strategic decisions and assess organisational effectiveness”. Likewise, Ma and Tayles (2009) conceived the term as “the body of management accounting concerned with strategically orientated information for decision making and control”. Additionally, the Chartered Institute of Management Accountants (CIMA) in 2005 defined the concept as “a form of management accounting in which emphasis is placed on information which relates to factors external to the entity, as well as non-financial information and internally generated information” (CIMA, 2005). Similarly, Guilding, Cravens and Tayles (2000), Cravens and Guilding (2001), and Cinquini and Tennuci (2010) agreed that SMA can be examined “as a set University of Ghana http://ugspace.ug.edu.gh 17 of practices, techniques or tools of management accounting with a strategic orientation, which supports the strategic management process”; and Cadez and Guilding (2008) established that “SMA can be considered as a set of strategically oriented accounting techniques as well as the involvement of management accountants in the strategic decision-making process”. Similarly, this study follows the rendition of prior research studies. Accordingly, this study views SMA as encompassing strategically-oriented accounting techniques and practices (Cadez & Guilding, 2008; Kalkhouran et al., 2017). SMA techniques are innovative techniques that are made up of external and strategically oriented techniques to aid the gathering of relevant information for management inferences (Al-Mawali, 2015; Oyewo, 2021; 2022). For instance, a recent study by Oyewo (2022) understood SMA to be a unit of innovative MA techniques possessing an external focus on competitors, and both potential and existing customers alongside any other strategic concerns. 2.2.1 Dimensions of SMA Cadez and Guilding (2008) suggested two key dimensions of SMA: management accountants’ involvement in strategic decision-making; and the use of SMA as techniques to assist a firm’s operational activities. The empirical literature has revealed that SMA techniques can be categorised under five key headings including costing, planning, control and performance measurements, strategic decision-making, competitor accounting and customer accounting (Cadez & Guilding, 2008; Ojra et al., 2021; Langfield-Smith, 2008; Rashid et al., 2021). In contrast, Nixon and Burns (2012) argued that limiting the concept of SMA as a collection of practices and techniques may hinder stakeholders from understanding how SMA affects the strategic management process. Accordingly, a study conducted by Alamri (2019) developed distinct facets of SMA from a review of the literature and demonstrated their association with organisational performance. The study identified “SMA – information facet”, “SMA - University of Ghana http://ugspace.ug.edu.gh 18 organisational structure facet”, “SMA - resource facet” and “SMA- organisational climate facet” as facets of SMA (Alamri, 2019). The study claimed that due to the diverse conceptualization ascribed to the concept of SMA, relying on just these two delineations in literature does not capture the SMA concept in its entirety (Nixon & Burns, 2012; Alamri, 2019). In addition, Langfield-Smith (2008) argued that bridging the gap between strategy literature and management accounting literature into a single strategic perspective will be key to understanding how SMA is conceptualized within the organisational setting. For instance, Alamri (2019) suggested that prior perspectives used in theorizing the concept have not been able to identify the better fit between SMA and the entity’s context within the strategic management process; thus making it difficult to express the nature of SMA as a multifaceted and dynamic concept. Notwithstanding, several studies conducted in the literature on SMA have significantly viewed this concept from the perspectives of Guilding et al. (2000) as well as Cadez and Guilding (2008). Accordingly, SMA has been conceptualised as the involvement of accountants in long- term decisions and the use of strategically oriented MAP, which aids in acquiring relevant and reliable information for making well-informed decisions (Petera et al., 2020; Cescon et al., 2019; Pavlatos & Kostakis, 2018b). 2.2.1.1 Management accountants’ participation in strategic decision making According to Erokhin et al. (2019), the growing demands from the environment have contributed to the changes in MAP. Likewise, the MA profession has been altered as a result of the evolving nature of management accounting (Chenhall & Moers, 2015; Kalifa et al., 2020). By extension, Cadez and Guilding (2008) and Hadid and Al-Sayed (2021) have envisioned management accountants playing a significant role in delivering strategic information. For this reason, stakeholders in academia and practice continue to dedicate efforts University of Ghana http://ugspace.ug.edu.gh 19 to scrutinize and understand the new roles of accountants (Hadid & Al-Sayed, 2021; Kalifa et al., 2020; Lasyoud et al., 2018; Odia, 2019). According to Rajeevan (2019), MA was initially viewed as a tool to deliver information that creates value within a short period. However, changes in the late twentieth century have shown that firms consider not only the internal setting but also include external and long-term concerns (Nguyen, 2018). In that regard, management accountants have visualized themselves as business advisors who support both short and long-term issues (Hadid & Al-Sayed, 2021). Cadez and Guilding (2008) also claimed that accountants have extended their role by taking a credential role in the strategic management process. Similarly, professional accountants' have directed efforts to organise and support firms to use sustainable practices, such as integrated reporting and stakeholder management practices (Rajeevan, 2019). Notably, accountants in this era are not merely involved in gathering information but also participate in the strategic decision-making process (Hoang et al., 2020). Furthermore, prior literature highlights the new role of a management accountant as “business advisor” (Rajeevan, 2019), “business partner” and “business partnership” (Loo et al., 2011; Rashid et al., 2021), “accountants as assistants for strategic decision making” (Burns & Baldvinsdottir, 2005), “horizontal accounting” (Chenhall, 2008), “internal advisor” (Hoang et al., 2020), “interfunctional co-operation” (Roslender & Hart, 2003), “strategic accountant” (Cadez & Guilding, 2008), “hybrid accountants” (Burns & Baldvinsdottir, 2005; Karlsson et al., 2019), and “teamwork” (Bromwich, 2000). According to Chenhall (2008), the concept of ‘horizontal organisation’ reflects how a firm integrates its organisational structures into its value chain processes to promote the satisfaction of customers. Likewise, Hoang et al. (2020) and Fuadah et al. (2020) revealed that experts in the accounting field have pushed for a transformation in the role of management accountants University of Ghana http://ugspace.ug.edu.gh 20 from the conventional “control” configuration to a more “strategic” role otherwise termed as a “business partner role”. They further emphasised that in the quest to achieve an optimal outcome, the accounting information provided to users strengthens the association between management accountants and other functional managers (Roslender & Hart, 2003; Nguyen, 2018). As such, firms have directed efforts to include management accountants in their engagement to help reduce their information needs thereby decreasing complexities present within the business environment (Cadez & Guilding, 2008). Rajeevan (2019) acknowledge that customer orientation and digitalisation have proven that modern MAP is a requisite innovation to condition firms to survive in the competitive business environment. Moreover, the adoption and usage of SMA techniques in the decision-making process are seen as extended initiatives of management accountants (Hadid & Al-Sayed, 2021). Similarly, the SMA discourse has conceived that management accountants can play a role in the strategic management framework (Cadez & Guilding, 2008; Hadid & Al-Sayed, 2021). This denotes that management accountants have assumed a new role that coordinates information from various stakeholders and other functions such as customers, competitors and HR (Hadid & Al-Sayed, 2021; Lasyoud et al., 2018; Vu et al., 2022). Relatively, Roslender and Hart (2003) assert that modern MAP (SMA) unveils marketing management and accounting relations. Hence, complementing various functions within the entity will produce significant outcomes by assisting firms to remain relevant, competitive and survive in these modern business environments (Arunruangsirilert & Chonglerttham, 2017; Hadid & Al-Sayed, 2021; Lapsley & Rekers, 2017; Rajeevan, 2019). Similarly, CIMA (2014) advanced that modern accountants possess unique abilities and skill sets to aid an organisation in sustaining a competitive edge through value creation as depicted in Figure 2.2. Accordingly, the flow of information in Figure 2.2 supports management accountants' new role in terms of gathering, summarizing, evaluating, classifying and analysing relevant data as well as developing University of Ghana http://ugspace.ug.edu.gh 21 alternative outcomes that may prove beneficial to the entity goals including, social and environmental concerns (CIMA, 2014; Nartey & van der Poll, 2021). Figure 2.2: The flow of Management Accounting Information (Source: CIMA, 2014) In addition, professional entities have promoted accountants to take on new roles that will help businesses, investors and other stakeholders to achieve their goals. For instance, the Chartered Institute of Management Accountants (CIMA) and the American Institute of Certified Public Accountants (AICPA), jointly coined the Chartered Global Management Accountant (CGMA) designation in 2012, employs a unique framework (Global Management Accounting Principles [GMAP]) that supports good managerial practices to guide management to improve performance. These principles provide effective management approaches to enhance firm performance by way of creating value for stakeholders through partnerships and cost management. Nartey and van der Poll (2021) mentioned that management accountants have managed to gain specialised expertise through training which distinctively positions them to make a huge contribution to the firm's sustainability and survival. University of Ghana http://ugspace.ug.edu.gh 22 2.2.1.2 Strategic management accounting techniques Even though there is controversy on the concept of SMA, MA scholars have provided some unique features that can be followed to distinguish SMA from Traditional Management Accounting (TMA) techniques. An initial attempt by Guilding et al. (2000) has been adopted extensively in the literature (see Al-Mawali, 2015; Cadez & Guilding, 2008; Kalkhouran et al., 2017; Oboh & Ajibolade, 2017; Ojra et al., 2021; Oyewo, 2022; Pavlatos, 2015; Turner et al., 2017), upholding that TMA possessed an inward focus (internally oriented). They further added that for a technique to qualify as strategic, it needs to exhibit orientations such as being outward-looking (externally oriented) and forward-looking (long-term oriented) (Cadez & Guilding, 2008). Additionally, some have relied on the criticisms directed at TMA to help shape and identify modern MAP. Proponents suggest that SMA techniques should emphasise both ‘financial and non-financial’, (as shown in Figure 2.1) and should have a ‘long-term perspective’ that considers several years as well as being market-oriented (Oyewo, 2021). Likewise, CIMA (2005) complemented that SMA isolates itself from TMA by having an external orientation that considers an entity’s external environment (which includes concerns for stakeholders – customers, competitors, etc.), goal congruence, and future-oriented. Consequently, this study relies on this yardstick to carefully distinguish SMA techniques for the current study. Costing As seen in previous studies (Cadez & Guilding, 2008; Cescon et al., 2019; Ojra et al., 2021), companies that capitalize on cost data by aligning marketing and strategic information will be able to create resilient strategies. These strategies provide efficient mechanisms to drive towards achieving a sustained competitive edge over its rivals. Therefore, firms must acknowledge the significance of formulating and integrating well-defined cost strategies based University of Ghana http://ugspace.ug.edu.gh 23 on costing information, and carry out several cost assessments from a strategic point of view (Oboh & Ajibolade, 2017; Ojra et al., 2021). Attribute costing Attribute costing is regarded as one of the most significant additions to the SMA discourse. This approach involves accumulating the cost data that stakeholders derive from a firm's products (Roslender & Hart, 2003). Within the framework for strategic management, this approach emphasizes costing the benefits clients derive from an entity’s products and their characteristics which demands complementing contributions from the field of management accounting and that of the marketing management discipline (Ojra et al., 2021; Roslender & Hart, 2003). Typically, the product attributes that may appeal to clients may include dependability, warranty policies, level of finish and trim, operating performance variables, supply assurance, and after-sales support (Nik Abdullah et al., 2022; Cadez & Guilding, 2008). Predictably, the market share can be determined since the identified factors can be matched with the taste and preferences of clients with the product attributes. Life cycle costing This accounting technique includes the evaluation of expenses or costs associated with a good or service throughout its lifetime, otherwise known as its stages in the product life cycle (Pasch, 2019). The phases of a product's life cycle include: “design, introduction, growth, maturity, decline, and abandonment (Guilding et al., 2000; Nik Abdullah et al., 2022). Ojra et al. (2021) and Cadez and Guilding (2008) mentioned that in line with the strategic implications, this approach advances in evaluating expenses along the product life cycle as opposed to an annual basis. University of Ghana http://ugspace.ug.edu.gh 24 Target costing This technique was initially introduced in Japan, but recent developments have shown that it has gained prominence already around the globe. It annotates that the desired total product cost, which can be determined from estimations of external market price, sales volume, and target profit, is known as the target cost. Target costing, according to Cadez and Guilding (2008), is a technique used during the initial stages of product design that dwells on cost estimation. Cost estimation is computed by subtracting an expected profit margin from an estimated market- valued price to arrive at a desired production and marketing cost among others (Nik Abdullah et al., 2022; Guilding, Craven & Tayles., 2000). The target cost, also known as the cost estimate, is then taken into consideration when designing and developing the good or service (Guilding et al., 2000). Value chain costing Value chain costing is an approach for analysing all performed activities from the design stage throughout all the various stages to the distribution stage of a product or service (Cadez & Guilding, 2008). Because it views the entity as a set of links in the chain of all value-creating activities associated with the service or products produced, it can include both external or internal factors related to the firm (Guilding et al., 2000; Nik Abdullah et al., 2022). Notably, the perspective of costing during value chain analysis may not be identified as an SMA tool only for value creation but may also help firms gain a holistic perspective of supply chain initiatives employed for firm success (Guilding et al., 2000). Quality costing This technique has become relevant considering efforts by firms to mitigate waste and improve quality management systems that promote quality and efficiency. Quality costing in the scope of MA has become an effective management technique for collecting and measuring the costs University of Ghana http://ugspace.ug.edu.gh 25 (this includes, value-adding, cost of conformance, and non-value-added costs) involved in managing and enhancing quality within the production processes (Dmitrović-Šaponja & Suljović, 2017), that help in delivering quality goods and services to customers. Activity-Based Costing/ Management This approach allows management to assign cost incurred in acquiring resources to cost objects (e.g., products, services or clients based on activities performed for the cost objects). This approach perceives that the outcome of activities a firm undertakes yields its products and services, and activities consume resources which incur costs (Dmitrović-Šaponja & Suljović, 2017). This technique possesses a strategic focus that allows the management to structure its activities in such a way that makes it possible to define actions, resources, and activities aimed at achieving sustained competitive advantage (Dmitrović-Šaponja & Suljović, 2017; Oyewo, 2022). Planning, control and performance measurements The planning, control, and performance assessment aspects of SMA have been highlighted in the literature as being essential for organisations to survive competition in the long run within the industry (Ojra et al., 2021; Langfield-Smith, 2008). Benchmarking This method focuses on finding the best practices either internal to the organisation or externally (Cadez & Guilding, 2008). Benchmarking entails a continual comparison of a firm’s processes or activities that reveals the efficiency of an organisation. This includes all performance-related areas of an entity including strategic areas, customer satisfaction, and operational activities and processes (Bromwich, 1990; Guilding et al., 2000). The best practice is typically a standard offered by sources outside the firm or a high-performing unit inside an entity. Benchmarking is seen as the practice of routinely evaluating internal operations against University of Ghana http://ugspace.ug.edu.gh 26 a desirable level of outcomes (Cadez & Guilding, 2008; Oboh & Ajibolade, 2017). The primary goal of benchmarking is to increase performance; however, doing so can be time-consuming and challenging to carry out since its associated costs are expensive. As a result, the business must weigh the costs and benefits of doing so. Integrated Performance Measurement (Balance scorecard) Integrated performance measurement systems offer performance measures that transcend a variety of organisational viewpoints, which are both financial and non-financial. Interestingly, Cadez and Guilding (2008) claimed that the most widely accepted balance scorecard (Kaplan, 1996) can indeed be considered as being closely connected and identical to this SMA technique. In addition, this technique's key characteristic is that it focuses on gathering performance-based data on client needs and may incorporate non-financial measures. Fundamentally, a balanced scorecard provides data from diverse perspectives including financial, non-financial, customer and learning and growth perspectives (Kaplan & Norton, 1996). Departments are required to monitor those elements as part of this approach to ensure customer satisfaction (Roslender & Hart, 2003; Cadez & Guilding, 2008). In contrast to reality, it can be challenging to obtain information about non-financial aspects, and the veracity of non- financial information is sometimes controversial (Guilding et al., 2000). Environmental management accounting This SMA technique relies on a combined approach that transitions information from cost accounting, financial accounting and mass balances which promotes material efficiency and reduces the cost of environmental protection and environmental impact and risk (Dmitrović- Šaponja & Suljović, 2017) by identifying and allocating environmental-related costs. Environmental management accounting (EMA) involves the generation, assessment and University of Ghana http://ugspace.ug.edu.gh 27 analysis of non-financial and financial data in efforts to support environmental management mechanisms (Dmitrović-Šaponja & Suljović, 2017). Strategic decision making As a category of SMA techniques, strategic decision-making is an essential way to facilitate strategic choices. The main SMA techniques under this category are strategic costing, strategic pricing, and brand valuation (Shank, 1996; Cadez & Guilding, 2008). Strategic costing (Strategic Cost Management) This practice relies on using cost data to develop an improved strategy for gaining sustained competitive advantage: this technique aims at evaluating the financial effects that emanate from managerial strategic decisions (Shank, 1996). This strategy prioritises external and upcoming issues by viewing strategic management ideas (value chain) and marketing concepts (product positioning) as the most pertinent in strategic decision-making (Cadez & Guilding, 2008). Strategic pricing Recognising strategic pricing as a part of SMA is crucial (Simmonds, 1981; Cadez & Guilding, 2008). According to Simmonds (1981), any competitively oriented analysis used in strategic pricing will result in more effective pricing decisions. Economies of scale, experience, predicted market expansion, competition price reaction, and pricing elasticity competence in the pricing decision-making process are key elements that could be evaluated in such an analysis (Ojra et al., 2021; Cadez & Guilding, 2008; Nik Abdullah et al., 2022). Brand valuation Brand valuation seems to be under controversy in the accounting literature as to whether it is a method that is related to accounting (Cadez & Guilding, 2008). Nonetheless, the SMA discourse encapsulates ideas from strategic management, marketing management, and University of Ghana http://ugspace.ug.edu.gh 28 accounting. In addition, trying to understand brand valuation from the accounting or MA perspective inculcates providing a yardstick to assess the marketing success of a firm that holds a strong unique brand (Guilding et al., 2000). According to Cadez and Guilding (2008), brand valuation is the appraisal of a brand's financial worth based on criteria such as market leadership, trend, internationality, support, stability, and protection, in addition to brand earnings from the past (Oboh & Ajibolade, 2017). In reality, most businesses attempt to assign value to their brand. But for clients to stick with the business, this must be carefully examined frequently. Competitor accounting This category entails creating and engaging with the right tools and techniques to help a business analyse and assess its position in a fiercely competitive industry (Ojra et al., 2021). As a result, a company chooses methods that will help outperform its competitors. A company must gather accounting information on competitors to fulfil that efficiently. Competitor cost assessment The competitor cost assessment, according to Cadez and Guilding (2008), is regularly disseminating scheduled updated estimates of a competitor's unit cost. Companies must identify their rivals and evaluate their cost positions relevant to the market. Competitor cost analysis focuses mostly on the cost structures of the entity (Simmonds, 1981). Numerous sources exist for competition cost data that can be relied upon for cost assessment including physical observations, shared vendors, clients, as well as teammates (Cinquini & Tenucci, 2010). Competition position monitoring This approach entails the disclosure of competitor information, which the business may use to determine where it stands relative to its leading rivals and, further, help to control or develop University of Ghana http://ugspace.ug.edu.gh 29 its strategy (Oboh & Ajibolade, 2017; Cadez & Guilding, 2008). However, this SMA technique conceives competitive advantage as an intangible resource having a constrained earning potential (Oboh & Ajibolade, 2017). Notably, any business wanting to preserve its market position will find it helpful to know its competitors' strengths and shortcomings. Competitor performance appraisal According to Oboh and Ajibolade (2017), it is possible to evaluate the strategic performance of rivals and discover their primary sources of competitive advantage by conducting a pertinent and in-depth review of their public financial accounts. Additionally, as noted by Cadez and Guilding (2008), one should analyse a competitor's financial accounts to determine what distinguishes them from their rivals. Conversely, analysing competitors from the financial aspects alone will not be enough to retain competitiveness; non-financial data will also be needed. Customer accounting The last category is customer accounting, which situates attention on critical stakeholders in the industry who are regarded as customers. This technique includes procedures used to estimate earnings, sales, or expenses associated with individual customers or groups of customers (Cadez & Guilding, 2008). Customer profitability analysis Under this approach, specific customers or a group of customers are investigated, along with their associated customer-specific costs and sales to the customer accounts (Oboh & Ajibolade, 2017; Dmitrović-Šaponja & Suljović, 2017) are tracked under that analysis. Here, the profit from a certain individual consumer is calculated. The computations cover all the standard procedures for estimating profit, sales, and costs resulting from customers or specific customer segments. University of Ghana http://ugspace.ug.edu.gh 30 Lifetime customer profitability analysis This method entails evaluating and analysing client profitability over a long period, taking into account future years, and as a result places crucial emphasis on all anticipated future earning potential and anticipated future expenditures associated with providing services to a particular client (Cadez & Guilding, 2008). This method forecasts all future projected earnings that will originate from a future trade relationship or contract with a certain client, rather than just the annual profits that can be expected from that client (Nik Abdullah et al., 2022). The consumer, who might not be around in the long run, will inhibit the reliability of this SMA tool. It is challenging to foresee how long a consumer would stick with the business. Valuation of customers as assets The value assessment of customers to the business is covered by this approach. This might be accomplished by estimating the present value of all future revenue streams attributed to a specific client (Cadez & Guilding, 2008; Nik Abdullah et al., 2022). Because it is a common practice in marketing to view clients as assets, businesses frequently place a value on their customers. Nevertheless, since they will not have a permanent relationship with the business and future customer profits are equivocal, it has become challenging to put value on consumers in practice. 2.2.2 Adoption and Benefits derived from using SMA The current demands of the environment have motivated firms to engage in activities that promote their growth and survival. Besides, the increasing levels of uncertainty have made it crucial to adapt MA activities to changing trends in management needs. Oboh and Ajibolade (2017) argued that the survival of an entity demands the introduction and use of relevant practices to continually stay relevant and competitive. For this reason, firms have attached great University of Ghana http://ugspace.ug.edu.gh 31 importance to adopting and implementing modern innovative management accounting practices such as SMA (Oboh & Ajibolade, 2017; Ojra et al., 2021). Although there has been growing concern for SMA, studies have highlighted that the adoption and implementation of SMA are moderate to low (Rashid et al., 2021; Oboh & Ajibolade, 2017). This suggests that firms seem to ignore the potential benefits of SMA techniques. For instance, according to Sartorius et al. (2007), barely 12% (thus only 21 out of 181 enterprises) of the quoted South African companies surveyed had implemented Activity Based Costing (ABC) in their operations. Moreover, based on a survey involving 127 public sector entities conducted by Nuhu et al. (2017) in Australia revealed that the use of ABC, target costing and benchmarking among the 8 SMA techniques were the most frequently used. Similarly, a study by Cinquini and Tenucci (2010) found that customer accounting, competitive position monitoring and competitor performance appraisals were more commonly used by their sampled 92 large Italian firms operating in the manufacturing industry. Cescon et al. (2019) demonstrated that within 55 Italian manufacturing enterprises, the application of SMA practices predominately emphasised competitor position monitoring; highlighting the importance of customer accounting and competitor accounting as integral SMA techniques. Nonetheless, prior literature suggests that there are several benefits attached to adopting and implementing SMA techniques. Firstly, the use of SMA techniques promotes decision-making. Tillmann and Goddard (2008) characterised SMA as being concerned with the application of MA to assist in strategic decisions. Likewise, Ojra et al. (2021) suggest that SMA helps promote effective decisions and thus gains a competitive advantage. This indicates that the provision of relevant information by SMA helps support management activities towards improving performance as a result of enhancement in decision-making systems as evidenced by Figure 2.1, on how information flows towards creating value (Nik Abdallah et al., 2022; Nartey & van der Poll, 2021). University of Ghana http://ugspace.ug.edu.gh 32 In addition, Oboh and Ajibolade (2017) mentioned that SMA plays a role in a company’s ability to survive in a highly competitive global market by helping appraise strategic issues. Langfield-Smith (2008) holds the view that “to survive, an entity must continue to offer the cheapest way for consumers to obtain the desired bundle of attributes”. According to Zhang et al. (2019), managers need to attach relevance to management innovation to promote sustainability and long-term survival. Another stream of research suggests that the adoption and usage of SMA techniques promote sustainability among firms (Azudin & Mansor, 2018; Erokhin et al., 2019; Harris et al., 2019; Nartey & van der Poll, 2021; Oboh & Ajibolade, 2017; Thapayom, 2019; Zhang et al., 2019). According to Zhang, Khan, Lee and Salik (2019), the existence of an entity is primarily anchored on generating higher earnings, retaining competitiveness and the ability to promote firm growth in the long run. As such, firms implement diverse kinds of approaches and practices to realise higher outcomes (Nartey & van der Poll, 2021). For instance, Zhang et al. (2019) showed that management innovation and technological innovation promote organisational performance and sustainability. Acknowledging sustainability in light of its probable impact on firm performance, the concept concerns issues (economic, environmental, social) that are associated with diverse stakeholders (Nartey & van der Poll, 2021; Zhang et al., 2019; Thapayom, 2019). Likewise, SMA concentrates on internal as well as external factors relating to the entity, that benefits both the entity’s internal and external stakeholders as well (Alamri, 2019). Consequently, relying on and using information external to the firm positions the entity for sustained success. Arguably, Šiška (2017) suggests that only implementing innovations like SMA without also enhancing organisational capabilities is likely to be insufficient to guarantee improved returns. Moreover, Nartey and van der Poll (2021) note that the adoption and implementation of innovative and modern MAP complement management activities within and outside the entity. They further University of Ghana http://ugspace.ug.edu.gh 33 stressed that SMA techniques assist management accountants in gathering and analysing issues in the social and environmental context that are appealing and beneficial to the entity (Nartey & Van der Poll, 2021). Further, the increased competition, globalization and innovations have changed the business models of most firms; hence, managers have directed attention to engaging in activities that will create value for various stakeholders (Abdullah et al., 2020; Phornlaphatrachakorn, 2019). Prior studies suggest that the adoption and implementation of SMA provide opportunities for entities to create value (Alamri, 2019; Abdullah et al., 2020). According to Abdullah et al. (2020), the effective application of SMA would also enhance the company’s operational processes and decision-making processes, contributing to the development of value and wealth creation. In that regard, effective use of SMA techniques would lead to prolonged value creation and operational excellence (Abdullah et al., 2020; Alamri, 2019; Phornlaphatrachakorn & Na-Kalasindhu, 2020). Notwithstanding the considered relevance of SMA, its usage has been witnessed in diverse sectors and industries such as the public sector (Alamri, 2019; Höglund et al., 2021; Nuhu et al., 2017), service (Odia, 2019; Oboh & Ajibolade, 2017; Kalkhouran et al., 2017; Waweru et al., 2004), educational institutions (Hutaibat, 2011; Hutaibat & Alhatabat, 2020), hospitality (Campos et al., 2022; Pavlatos, 2015; Turner et al., 2017), supply chain and logistics (Doktoralina & Apollo, 2019), and manufacturing (Bromwich, 1990; Cescon et al., 2019; Henri et al., 2014), among others. This suggests that the usage of SMA is multi-disciplinary and can enhance the performance of entities cutting across diverse sectors. This corroborates the assertion made by Roslender and Hart (2003) that the use of SMA takes a holistic approach by integrating marketing and accounting functions to attain a strategic position. University of Ghana http://ugspace.ug.edu.gh 34 Despite the growing relevance and interest in the concept of SMA in literature (Alamri, 2019; Cadez & Guilding, 2008; Cescon et al., 2019; Dmitrović-Šaponja & Suljović, 2017; Hadid & Al-Sayed, 2021; Lapsley & Rekers, 2017; Ma et al., 2022; Oboh & Ajibolade, 2017; Ojra et al., 2021; Oyewo, 2021; 2022; Pavlatos & Kostakis, 2015; Pedroso & Gomes, 2020; Petera et al., 2020; Petera & Šoljaková, 2020; Phornlaphatrachakorn & Na-Kalasindhu, 2020; Rashid et al., 2020; 2021; Thapayom, 2019), it is scarcely consistent with what exists on the ground/ physical or in practice. For instance, Nuhu et al. (2017) and Cescon et al. (2019) demonstrated that benchmarking, activity-based costing and target costing are greatly used among firms. On the other hand, Khan et al. (2011) showed that the level of usage of SMA (balance scorecard) is low among firms situated in Bangladesh. This reveals a disparate conclusion on the usage of SMA among scholars around the globe with higher usage in developed contexts than other contexts (Rashid et al., 2021). Rashid et al. (2021) also argued that the differences among nations influence how things are done. For instance, while some nations take advantage of their systems to engage in earnings management and illegal activities, others channel those resources to formulate approaches and methods to control costs, which include, investing in the adoption of innovative MA tools to strategize and control cost. As a result, Rashid et al. (2021) and Ojra et al. (2021) advance that more attention should be focused on the extent of adoption and usage of SMA in developing countries. Similarly, most of the studies conducted on SMA have concentrated on large firms in developed nations with less emphasis on developing countries (Alamri, 2019; Cadez & Guilding, 2008; Cescon et al., 2019; Nuhu et al., 2017; Turner et al., 2017). Although Ma et al. (2022) responded to the call and studied SMEs situated in China, the study used a qualitative approach. However, this study adopts a quantitative approach to examine the factors that influence the design and usage of SMA among SMEs in a developing nation like Ghana. University of Ghana http://ugspace.ug.edu.gh 35 Figure 2.1: The information needs of strategic management Source: Abuo-Alfutouh (2004) 2.3 Firm performance The management literature underscores the crucial role of a performance assessment system in an organisations’s operation, strategy formulation, and strategy implemention (López & Hiebl, 2015; Ojra et al., 2021). Similarly, previous studies have also emphasised the significance of the concept of firm performance on an organisation, as it strongly influences the success or failure of any brand (Pucci et al., 2017; López & Hiebl, 2015). However, several researchers have conceptualised firm performance in various ways. For instance, Pucci et al. (2017) defined firm performance as an organisation's efficacy as manifested through financial and operational results. Ordinarily, performance is perceived as “a measure of how successful an entity/system/process accomplishes its purpose” (Garengo et al., 2005; López & Hiebl, 2015). In another instance, Neely et al. (2002) argued that performance systems include the use of integrated adaptive systems to collect, store, and analyse data to assist in decision-making. Underlining this proposition necessitates studying the concept of SMA since its goal includes making relevant decisions that will secure strategic positioning. University of Ghana http://ugspace.ug.edu.gh 36 According to Simpson, Padmore and Newman (2012), the degree to how effectively and efficiently a firm operates in achieving its predetermined objectives is regarded as performance. The performance of a firm reveals how managers uphold its administrative roles; thus how efficiency, economy and effectiveness are simultaneously combined to optimize a firm’s outcomes (Pucci, Nosi & Zanni, 2017). Efficiency captures the expedient use of business tools and strategies to attain performance expectations. On the other hand, effectiveness measures how well a firm satisfies stakeholder demands; while economy encompasses attaining firm outcomes by taking advantage of minimal cost. In that regard, firms that can operate efficiently and effectively stand the chance to outpace their rivals, hence, sustained firm performance (Ates et al., 2013; Neely, 2005; Pucci et al., 2017; Simpson et al., 2012). A study conducted by Ates, Garengo, Cocca and Bititci (2013) implored that entities need to pay sufficient attention to sustain performance since survival depends on it. In addition, to remain competitive, organisations must constantly improve their performance by reducing costs, enhancing quality, and distinguishing their products or services from competitors (Oyewo, 2022). Further, the contingency-based studies have highlighted that “organisations are likely to perform better if they adopt and implem