Strategic Management Accounting: A Case Study

Strategic Management Accounting (SMA) was first introduced by Simmonds in 1981. Simmonds defined SMA as “The provision and analysis of management accounting data about a business and its competitors, for use in developing and monitoring business strategy” (Simmonds, 1981, p. 26).

The tools that constitute SMA techniques are as follows; life-cycle costing, strategic cost analysis, target costing, life cycle costing, Activity Based Costing (ABC), attributable costing, balanced scorecard, activity based management, performance measurement systems and life cycle costing (Langfield-Smith, K, 2008).

As it is just over thirty years since SMA was introduced it seems like an appropriate time to assess its development. This paper will illustrate the

Objectivity is an ontological position which assumes social actors cannot influence social phenomena and their meanings (Bryman and Bell, 2011). In contrast, constructionism asserts that social actors have a significant impact on the social world. In fact, the essence of constructionism identifies that reality is determined by people and other external factors are insignificant (Easterby-Smith, Thorpe and Lowe, 1991).

Management accounting can be thought as a complex object, this view is based not only on that individuals interpret management accounting differently. The ontology of management accounting is undoubtedly multifaceted. It is important to note that management accounting practices are flexible to each situation. It can be interpreted as “objects” which maintain their homogeneity despite and thanks to their heterogonous use (Busco, C. et al 2007). In other words, ontology of management accounting can only be understood by analysing how it performed in real life

Epistemology can be examined by contrasting two attitudes. Positivism and anti-positivism, the latter believe that research is subjective and research can only be portrayed from the perspective of the individual involved with the activity. However, as this paper took an objective position, a positive approach will be applied to the research. Positivism attitude can be defined as believing only phenomena that are both observable and measurable can be deemed knowledge (Collis and Hussey, 2009).

A positive attitude is relevant to this area of research as it facilitates reducing the data to its simplest form and allowing generalisations. This is beneficial to the proposed refinement as it will enable the determination if strategic management accounting is a credible part of overall management accounting. A primary advantage of this form of research is it will be independent of the researcher’s views in as far as possible, thus neither affects nor is affected by the subject of the research (Remenyi et al,