Management accounting change; An exploratory study of large manufacturing companies in Kenya

Abstract

This study explores the changes in management accounting as well as the potential influence of contextual variables on management accounting practices in Kenyan large manufacturing companies located in Nairobi. This paper reports on a descriptive survey of management accounting change in Kenyan context. The findings indicate considerable changes in management accounting techniques within the surveyed companies. Both traditional and advanced management accounting techniques are practiced by the surveyed organizations. Advanced management accounting techniques notably; customer satisfaction, quality and innovation and on time delivery have been adopted, while traditional management accounting techniques notably; incremental budgeting, variable costing, standard costing and variance analysis, sales and return on investment are being maintained. Regarding changes in management accounting techniques the study established that majority of the responding organizations indicated change relating to introduction of new techniques as replacements, modification of information or output of MAS and introduction of new techniques where none existed. The study suggests that increased global competition, organization strategy and organization structure as contextual variables that largely facilitate management accounting change within the surveyed manufacturing companies. On the other hand, lack of adequate computing resources and lack of top management support were identified as the most hindrances to management accounting change within the surveyed organizations.