Management Accounting Techniques in Egyptian Business Firms: Expected Outcomes Perspective

Full text

The Academic Journal of Contemporary Commercial Research
Vol. 3, No. 3, 2023
Faculty of Commerce, Cairo University, Egypt
43
Management Accounting Techniques in Egyptian Business Firms:
Expected Outcomes Perspective
Rola Nowar a, ▪
a Faculty of Commerce, Cairo University, Giza, Egypt
▪ Corresponding author: rola_nawar@foc.cu.edu.eg
Abstract
This work aims to investigate two main issues to determine the theory underpinning the
implementation of management accounting techniques (MATs) in Egyptian business
firms. First, the impact of a set of driving forces (motives) on management’s decision to
adopt MATs within the business firm. Second, the impact of supply-side factors
(barriers), existing within business firms’ context, on the level of MA Ts’ implementation.
A study conducted on a sample of business firms operating in divergent industry sectors
in Egypt was carried out in early 2022. Primary data were collected through a survey,
using a questionnaire form, which was filled out mainly by top management of the
surveyed firms. The survey response rate was 49.5% and the number of proper
questionnaires utilized was 99. Multiple regression analysis is used to test the significance
of the relationship between MATs implementation motives, barriers, and its level of
implementation in practice. Statistical analysis of data collected revealed that non-
financial motives have a significant impact on the implementation level of MATs within
Egyptian business firms. No significant relationship was found between MATs
implementation level and type of activity, firm age, firm size, firm strategy, and supply-
side barriers. This result supports the use of institutional theory as a base for MATs
implementation decisions in Egyptian firms. The research adds to the body of knowledge
of management accounting practices in Egyptian firms from three aspects. First,
identifying the theories/approaches underlying the implementation level of 44 MATs
which is rarely addressed in management accounting literature. Second, exploring the
implementation levels of 44 techniques that are considered to be the largest recent set of
MATs being studied and analyzed in Egyptian firms. Third, classifying motivation factors
influencing the adoption of MATs, for the first time in literature, into 2 categories;
financial and non-financial for a more in-depth analysis of factors influencing MATs
implementation within the Egyptian business environment context.
Keywords
Management accounting techniques; Contingency theory; Institutional theory;
supply side factors; motivation; Egyptian business firms
Article history
Received: 22 February 2023 · Accepted: 27 May 2023

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1. Introduction
Countries’ welfare can be measured by the development of a country's gross
national product (GNP). GNP is a measure of the value of a country's economic
production from goods and services, and it’s one of the indicators used to measure a
country's national income and uses or public expenditures, which means that the
business firm’s output or production from goods or services directly affects a
country's national product. The business firm’s production or output is determined in
light of a combined set of factors, one of which is information extracted from the
business information systems, whether accounting or management information
systems. This shows that accounting information systems play an integral role in
maximizing business production or output. Therefore, their accounting information
systems greatly influence the GNP.
The Management Accounting Information System (MAIS) is a subsystem of a
business firm’s accounting information system which depends on a set of techniques,
each of which provides information that benefits a particular aspect of the firm's
administrative and operational process. In order to improve the quality of information
extracted from the firm’s management accounting systems, innovations in
management accounting systems have emerged. Innovations in management
accounting systems have been reflected through contemporary or strategic MATs.
What distinguishes contemporary or strategic MATs from traditional MATs, is the
relation of the first to the firm strategy (Chenhall, 2008), in addition to the expansion
in providing non-financial data, whether internal or external (Abernethy & Lillis,
1995; Chenhall & Langfield-Smith 1998; Chenhall, 2008). However, Weiss (2014)
reveals ten and more differences between TMATs and SMATS.
There is a set of synonyms adopted by the accounting literature to denote
management accounting innovations (MAIs). Many authors have used the strategic
attribute to describe management accounting as an expression for MAIs or strategic
management accounting (Cadez & Guilding, 2008, 2012; Carlson-Wall et al. 2015).
Conversely, the contemporariness attribute was used to describe management
accounting as an expression for MAIs or contemporary management accounting (Duh
et al., 2008; Nuhu et al. 2017). Abernethy and Bouwens (2005) defined MAIs as
either creating a new management accounting system or redesigning an existing
management accounting system. Zawawi and Hoque (2010) defined MAIs as the
application of a new or innovative form of management accounting and control
system; such as Activity-Based Costing (ABC), Activity-Based Management (ABM),
Time-Driven Activity-Based Costing (TDABC), Target Costing (TC), and Balanced
Scorecard (BSC).
In this context, the definition of MAIs must include three combined aspects. The
first aspect is the idea of innovation, addition, or improvement in the current
management accounting system and the mechanism through which this innovation is
to be applied. The second aspect is how to apply innovation, addition, or
improvement in the management accounting system to the business firm

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procedurally, and the suitability of the internal or external environmental variables to
apply this innovation or addition or improvement. The third aspect is to evaluate the
achieved outcomes from the application of innovation, addition, or improvement in
the management accounting system of the business firm.
Figure (1) shows the three aspects that should be included in the definition of
MAIs. The three representative aspects of MAIs may explain approaches or theories
underlying the accounting literature in this area.
Fig. (1) The Three Aspects that Should Be Included within the Definition of MAIs
MATs and innovations had been categorized in literature according to three
main bases; management information needs, historical evolution of management
accounting, and focus and orientation. Although there were discrepancies among
authors regarding which group of innovations to include within these broad
categories, there was somehow consensus in the literature as to these three bases for
classification. First, relevant to management information needs categorization base,
MATs, and innovations have been categorized into five main groups; 1. Cost
accounting systems group, which includes innovations such as; ABC, Activity Based
Cost Management (ABCM), Attribute Costing (AC), and Quality Control Costing
(QCC). 2. Planning and budgeting group, which includes innovations such as:
Activity Based Budgeting (ABB), and Budgeting Systems for different purposes. 3.
Management decision-making support group, which includes innovations such as;
Customer Accounting (CA), and Value Based-Management (VBM). 4. Performance
evaluation group, which includes innovations such as; Financial and Non-financial
Measures, Economic Value Added (EVA), Divisional Profit, BSC, Benchmarking,
and Operational/Manufacturing Performance Measures (O/MPM). 5. Strategic
analysis group, which includes innovations such as; Long-range Forecasting,
Competitor-Focused Accounting (C-FA), Product Life Cycle Costing (PLCC),
Accounting for Brand Costing (BC), Strategic Cost Analysis (SC), Target Costing
(TC), Kaizen Costing (KC) (Abdel-Kader & Luther, 2006; Mbawuni & Anertey,
2014; Pavlatos & Kostakis, 2015; Hussein, 2017; Nowar, 2017).
Second, in relevance to the historical evolution of management accounting
categorization base, the International Federation of Accountants (IFAC) in 1998
focused on the conceptualization of the evolution of management accounting rather
than the MATs which caused a lack of clarity as to which techniques or innovations
were to be included within each phase of management accounting evolution (Abdel-

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46
Kader & Luther, 2006, 2008). IFAC’s conception of management accounting
evolution included four stages: First, the pre-1950 stage focusing on cost
determination and financial control, second, the 1965 period of information for
management control and planning purposes, third, the 1985 period of resource waste
reduction in business processes, and fourth, the 1995 period of value creation through
effective resources (IFAC, 1998). Along with this line, the author may add one more
stage to reflect the impact of digital transformation on MATs and innovations.
Third, in relevance to focus and orientation categorization base, MATs which
focus mainly on enhancing earnings quality, and providing financial information
only, are categorized as traditional management accounting techniques (TMATs),
while those techniques focusing on strategic effectiveness, control, industry analysis,
customer satisfaction, competitive status management and providing both financial
and non-financial information, are categorized as contemporary/strategic MATs
(CMATs/SMATs) (Abdel-Maksoud, 2011; Ngoc et al., 2011; Ahmed et al., 2012;
Farouk & McLellan, 2017). The author prefers the term SMATs compared to
CMATs because standard costing, and budgeting techniques for example are both
TMATs, yet currently applied by most firms.
This research aims to; first, explore the current implementation level of 44
traditional and contemporary management accounting techniques. These techniques
are classified into 5 groups according to the literature addressing management
information needs (Abdel-Kader & Luther, 2006). Second, identifying the theories or
approaches underlying MATs adoption and implementation decision in these firms.
The remainder of this research proceeds as follows: Section 2 addresses the literature
review and hypotheses development, followed by the research method in Section 3.
Section 4 presents the data analysis and discussion. Section 5 addresses the
conclusion, limitations, and future research.
2. Literature Review and Hypotheses Development
In this section literature relevant to theories underlying MATs implementation
in addition to implementation drivers is reviewed and research hypotheses are
consequently developed.
2.1 Theories Underpinning MATs Implementation
Accounting literature addressing the theories or approaches underlying the
diffusion and implementation of MATs can be categorized into three groups each
describing an aspect of the definition of MAIs. Firstly, it is noted that the literature
dealing with the descriptive approach came to adopt just the idea of technique,
innovation, or addition in the field of management accounting, without looking for
the environmental factors surrounding the application or implementation of this
innovation or addition, and without measuring the outcomes of this application
(Cooper, 1988a, 1988b; Kaplan & Norton, 1992; Stern Stewart, 1993).

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Secondly, it is noted that the writings dealing with the contingency approach or
the contingency theory - or what can be called the extrinsic influence perspective
(Hung, 1998) - came to embrace the idea of identifying the environmental variables
or factors surrounding the business firm and required for the implementation of a
technique, innovation or addition in the management accounting area, and the extent
to which the business firm achieve positive results, those that varied in the accounting
literature in terms of measurement (profitability measure, user satisfaction measure),
in the light of the set of contextual variables that determine the elements of
management accounting innovation application (Baird et al., 2004; Brown et al.,
2004; Cadez & Guilding, 2008).
Thirdly, it is noted that the writings addressing the institutional approach or
theory - or what can be called the intrinsic influence perspective (Hung, 1998) - came
to embrace the idea of what outcomes or returns on the business firm resulting from
the application and implementation of this technique, innovation or addition in
management accounting area as a result of the transfer of the successes of peer firms
in achieving positive outcomes from the application of one or more MAIs. Perceived
outcomes influenced MATs implementation without considering the environmental
variables or factors surrounding the application or implementation of these
techniques, innovations, or additions (DiMaggio & Powell, 1983; Tolbert & Zucker,
1983), counting on the business firm’s capability to adapt its internal factors in order
to achieve success in the application of SMATs or MAIs.
Isomorphism in the application of MAIs from a business firm that has
successfully applied this innovation to another enterprise or entity can be identified
due to some reasons such as: (1) Coercive Isomorphism, which occurs as a result of
political influence, official or non-official pressures exercised by an entity over
another, such as that which a holding company may exercise on a subsidiary to apply
a particular accounting system. (2) Normative Isomorphism, which occurs, as a result
of the influence of professional organizations or associations regulating business
rules, such as those imposed by international or Egyptian Accounting Standards. (3)
Mimetic Isomorphism, which occurs as a result of an entity’s desire to capitalize on
the successes of another.
Figure (2) shows the theories that underpinned the innovations of management
accounting from a survey of 475 accounting studies during the period from the early
nineties of the last century to the middle of the second decade of the current century
(Bromwich & Scapens, 2016), the study revealed that during the period 2005-2014,
management accounting literature adopted social and critical theories, followed by
the contingency theory and the economic theory.

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Fig. (2) Theories Dealing with MAIs
Source: Bromwich and Scapens (2016, p.4)
2.1.1 ABC Implementation as a Proxy for Contingency Theory-Based
Application of MAIs
Management accounting literature, which adopted the contingency theory,
preceded the literature that adopted the institutional theory, since the beginnings of
accounting literature on the relationship between contingency theory and cost
accounting systems date back to the 1970s. Gordon and Miller (1976) dealt with the
use of contingency theory in the design of cost accounting systems and suggested the
need to take into account the environmental, and organizational characteristics or
factors, and administrative decision-making methods when designing cost accounting
systems.
Accounting literature indicates that the ABC system, as an innovation of
management accounting, has received the largest share of accounting literature
(Zawawi & Hoque, 2010). Accounting literature dealing with the ABC system as an
innovation of management accounting or as one of the contemporary or strategic
MATs came either with the embracement of contingency theory, which represented
the most commonly used theory (Kallunki & Silvola, 2008; Pavlatos, 2012; Zhang et
al., 2015; Bromwich & Scapens, 2016), or the institutional theory (Tsai et al., 2011;
Hofmann & Bosshard, 2017).
The outcomes from applying the ABC system have been determined from the
perspective of contingency theory within the context of accounting literature from
two points of view. First, measuring the outcomes from applying the ABC system
from the user satisfaction view. Second, measuring the outcomes from applying an
ABC system from the extent to which the business firm achieves better financial
results view. In the first view, several studies have indicated that the success of the
ABC system in influencing user satisfaction depends largely on a combination of
behavioral, organizational, and technical factors or variables, top management
support, and other contextual variables including the firm size, the type of activity the
business firm is engaged in, and the strategy adopted by the firm (McGowan &
Klammer, 1995; Krumwiede, 1998; Malmi, 1999; Brown et al., 2004; Chenhall,
2004). In the second view, Shields (1995) indicated a variation in the degree of

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success and extent to which the ABC system achieved better financial results. Yet,
Banker and Potter (1993) suggested that monopolistic and oligopolistic business
firms are expected to achieve better financial results when applying the ABC system.
Krumwiede (1998) study indicated that the probability of errors in cost calculations
as a result of applying the ABC system depends on the size of the enterprise and the
type of activity.
The factors necessary for the implementation and success of ABC have been
addressed by several accounting literature. On one hand, organizational factors;
organizational structure, administrative empowerment, the delegation of authority
and decentralization, bureaucracy, integration between departments, and the degree
of formalism, were considered among the factors affecting the implementation and
success of the ABC system (Shields, 1995; Brown et al. 2004; Zhang et al. 2015). On
the other hand, behavioral factors; personality, and social and moral responsibility,
were among the factors influencing the success of the ABC system (Shields, 1995;
McGowan & Klammer, 1997; Chenhall, 2004; Al-Omiri & Drury, 2007).
Furthermore, accounting literature dealt with the support of top management as an
essential prerequisite for the success of the ABC system (Krumwiede, 1998 ; Brown
et al. 2004 ; Al-Omiri & Drury, 2007; Lu & Pan, 2007 ; De La Villarmois & Levant
2011).
Contextual variables such as the firm size, type of activity, and the strategy
adopted by the business firm were studied in accounting literature in relation to the
application of the ABC system, confirming the existence of a correlation between the
size of the firm and the application of the ABC system (Krumwiede, 1998; Brown et
al. 2004; De la Villarmois & Levant, 2011). With regard to the type of activity, it
should be noted that the accounting literature dealt with the application of the ABC
system within industrial businesses and service businesses did not find that the
healthcare services sector was the focus of the majority of literature.
In reference to the institutional theory, Major (2012) examined the reasons
explaining why one of the Portuguese telecommunications companies had switched
from the traditional Volume Based Costing (VBC) to the ABC system. The study
revealed that the company in question adopted the ABC system in order to achieve
the expectations of users of management accounting information systems, especially
after the reorganization and development of operational systems in the
telecommunications sector in Portugal and the introduction of competition in the
telecommunications market. The study also indicated that prior research in literature
dealing with the development of management accounting systems needs to rely on
institutional theory in its social aspect in order to achieve a deeper understanding.
The contributions of the ABC system in the field of management decision-
making have been addressed in several accounting literature, and all the literature
points to the essential role of the ABC system in providing more accurate cost
information for management decision-making purposes (Swenson, 1995; Baird,
2007; La Villarmois & Levant 2011; la; Cadez & Guilding, 2008). In reference to the

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relationship between the degree of ABC system usage and the business life cycle,
Kallunki and Silvola (2008) revealed that the ABC system is more common in
business firms within the maturity and regeneration phase than firms within the initial
growth phase.
On the other side, the usage rates of the ABC system may be viewed to be
disappointing as the vast majority of business firms have implemented ABC over a
short period of time (Kaplan & Anderson, 2007a, 2007b; Tse & Gong, 2009;
Strattonet al., 2009; Hoozée & Bruggeman, 2010; Stout & Propri, 2011). This is
confirmed by a survey conducted by Innes et al. (2000) on British companies, where
the results of the study disappointingly revealed that only 17.5% of the study sample
is applying the ABC system and that 15% of these firms have stopped applying ABC
after evaluating its outcomes. The reasons indicated by the accounting literature
concerning the unsuccessful application of the ABC system varied. First, there was a
need for a large amount of information to implement ABC (Balakrishnan et al.,
2012). Second, reliance on personal judgment may indicate the inaccuracy of the
information derived from it (Kaplan & Anderson, 2007a; Demeere et al., 2009).
Third, despite the large number of activities undertaken by business firms to deliver
their products, the ABC system cannot sufficiently accommodate the complexity of
daily operations (Kaplan & Anderson, 2007a, 2007b; Barros & Ferreira, 2017).
2.1.2 BSC Implementation as a Proxy for Institutional Theory-Based
Application of MAIs
There have been numerous accounting studies on the positive aspects of BSC
and its impact on the financial and non-financial performance of business firms.
Kaplan and Norton’s (1992, 1996, 2001) literature was the first accounting literature
to support the positive relationship between BSC and a firm’s performance.
Accounting literature has shown some evidence that the use of BSC creates value for
the firm. These studies describe how the BSC has provided the ability to
communicate the strategy to all members of the business, while at the same time
providing the means by which management can obtain information and insights from
employees most linked to customers, thereby maximizing the firm’s revenue. Malina
and Selto (2001) indicated that BSC represents an approach or system for a firm’s
strategy transfer and is an effective management control tool, which improves the
profitability of firms, and that the inaccuracy of the indicators for each aspect of BSC
would lead to incompatibility of the firm with stakeholders. In the same direction,
Joseph (2008) concluded that the application of a stakeholder-based management
strategy using the BSC and Strategy Map created value and benefit for stakeholders
as well as for shareholders.
The BSC has emerged to overcome the shortcomings associated with the use of
financial indicators for performance evaluation and management decision-making.
Kaplan and Norton (1992, 1996a, b) indicated that there are six features of the BSC;
(1) The BSC is comprised of financial and non-financial indicators. (2) The financial
and non-financial indicators contained in the BSC are represented by a limited

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number of indicators ranging from 15-25 indicators. (3) The financial and non-
financial indicators of the BSC are categorized into different groups: Financial,
Customers, Internal Business Processes, Innovation, and Learning (Kaplan & Norton,
1992), but the last group has been modified to Learning and Growth (Kaplan &
Norton, 1996). (4) The objectives of firms are defined in terms of the strategy, with a
set of indicators to be determined to verify the extent to which these objectives are
implemented, and these indicators are usually documented in tabular form, with each
objective assigned one or two indicators. (5) Indicators are selected in such a way as
to ensure the firm’s top management support, reflecting their assessment of strategic
information, and the importance of supporting strategic communications that may
flow from a BSC if implemented. (6) The causal relationship between the groups of
the scorecard may be explained by the idea that within each of these groups (except
the financial perspective that is represented only by a set of lagging indicators), there
is a set of influential leading indicators and another set of affected lagging indicators.
The stages of the development of the BSC came in the form of generations, and
since its inception in the early nineties, accounting literature mainly dealt with four
generations of BSC. The first generation of the BSC appeared in the early 1990s until
1996, where the BSC was used as a tool for measuring and evaluating performance
(Kaplan & Norton, 1992, 1993). The second generation of the BSC was introduced
by the end of 1996 till 2000, where BSC was used as a strategic management tool
(Kaplan & Norton, 1996a, b). The third generation of the BSC was introduced from
the end of 2001 till 2015, where the BSC was used as a strategic control tool by
examining the relationship between activities and target outcomes (Destination
Statement) (Lawrie & Cobbold, 2004). The fourth generation of the BSC emerged in
2015, where the BSC has been used as a decision-making tool from an experimental
perspective (Decision-Making Trial and Evaluation Laboratory) (Valmohammadi &
Sofiyabadi, 2015).
Although various theories were used in BSC literature, during the first
generation of BSC development stages, few authors used theories in BSC research.
Since 1997, authors relied on different theories in BSC research (Hoque, 2012).
Psychology, organization behavior, and contingency theories were used to address
the adoption, implementation, and use of BSC (Lipe & Salterio, 2000; Hoque &
James, 2000; Banker, Chang & Pizzini, 2004; Tayler, 2010; Humphreys & Trotman,
2011). During later generations of BSC development stages, institutional, agency,
stakeholders, and actor-network theories were remarkably used in BSC literature
(Carmona & Granlund, 2003; Decoene & Bruggeman, 2006; Daniel, Myers, &
Dixon, 2011; Qu & Cooper, 2011).
In Table (1), Hoque (2012) refers to BSC articles published in accounting
journals by theory for the period (1992-2011). As indicated in the BSC theory-based
literature frequency table, theories were not commonly used by studies addressing the
early stage of adoption, implementation, and usage of BSC. Theory-based BSC
literature began to surface by the start of 1997. Additionally, it is worth noting that

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both contingency theory and institutional theory were used to address BSC adoption
and implementation.
Table 1: Theory-based BSC Literature for the Period (1992-2011)
Source: Hoque (2012, p.7)
Figure (3) refers to the report prepared by 2GC Active Management (2017) on
the prevalence of the BSC approach during 2016. The report shows the multiple
trends of BSC approach deployment starting from the geographical spread of the
BSC approach, passing through BSC usage fields, and finally the relative distribution
of BSC usage according to the size of the business firm measured on the basis of the
number of employees.

Fig. (3) The Extent of BSC Deployment during 2016
Source: 2GC Active Management BSC Usage Survey Report (2017)
In terms of views opposed to BSC, Epstein and Manzoni (1998) argued that
reaching an agreement on a clearly defined strategy for the entire firm and all its
members is difficult. In line with this argument, it can be said that it is difficult to
measure and control an arguable strategy; and it is one of the main reasons that led to
the failure of the BSC in the process of its practical implementation. Further, Vaivio
(1999) points to doubts that the firm management can translate its strategy into a
limited number of quantitative measures without ignoring aspects of the strategy.
Added to this are the visions of Nørreklit (2000) and Nørreklit et al. (2012)- the most
Years
1992-
1996
1997-
2001
2002-
2006
2007-
2011
Total
Psychology
0
1
2
2
5
Organizational Behavior Theory
0
1
3
1
5
Contingency
0
2
2
3
7
Sociological/Institutional Theory
0
0
0
7
7
Critical (General)
0
0
1
0
1
Agency
0
0
0
3
3
Stakeholder Theory
0
0
0
3
3
Actor-Network Theory
0
0
0
2
2
Cultural (National and Organizational)
0
0
0
1
1
Economics
0
1
5
5
11
Fad and Fashion
0
0
0
1
1
Multiple Theories
0
0
4
3
7
Historical
0
0
0
1
1
Constructivist Approach
0
0
1
0
1
Grounded Theory
0
0
0
0
0
Other
0
1
4
11
16
Nil/Not Stated
0
11
13
9
33
Total
0
16
36
52
104

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53
criticizing authors of the BSC in the uncertainty of the causal relationship between
the four aspects of BSC: financial, customer satisfaction, internal aspects, learning
(innovation) and growth and the corresponding value chain for each one of these four
aspects. Nørreklit (2000) argued that although relationships seem to be “logical”, the
cause-effect relationship should, at least, be questioned. Llach (2017) argued that the
current focus is on complicating the business in such four aspects and coordinating
these aspects with the firm’s strategy to align individual goals within the firm with
the firm’s overall objectives, which is considered a complicated issue.
2.2 Factors Influencing MATs Implementation
Business firms are continuously striving to keep pace with recent and upcoming
local and global competition and the speedy massive advancements in technology.
Adoption of SMATs came as a part of business firms’ response to the inadequacy of
TMATs to meet changing management information needs since they lack the ability
to make predictions, analyze and manipulate data, and report for non-financial
information (Ittner & Larcker, 1997; Chenhall & Langfield-Smith, 1998; Cooper &
Kaplan, 1999). MATs implementation decision is derived from a group of factors
classified in the literature as either external to or internal within business firms.
External drivers may encompass political pressures, global competition economic
crisis, globalization, mergers/joint ventures, and sometimes influences of
management gurus and consultants on business, while internal drivers may
encompass increasing profits, decreasing costs, improving customer satisfaction,
product development, improving quality, supporting planning, and monitoring
functions within the firm (Preda & Watts, 2004; Sturdy, 2004; Mbawuni & Anertey,
2014).
Fig. (4) Reasons for Adopting MATs
Source: Mbawuni and Anertey (2014, p.71)
Figure (4) shows the significance of a group of factors surrounding and within
the business firm context as potential reasons for the implementation of MATs
through a survey conducted by Mbawuni and Anertey (2014) covering 100
accounting/finance staff members in a telecommunication company in Ghana. Their
study showed that global competition was the primary reason for adopting MATs,
followed by the economic crisis and increasing costs factors, yet increasing

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profitability had very low significance, and finally political pressures with the least
significance suggested that it should not be considered as a reason for MATs
implementation.
Preda and Watts (2004) classified MATs’ implementation driving forces into
three elements: importance, organizational and strategic use, and organizational and
strategic benefits. A set of factors/drivers is assigned to each element to measure its
significance. The important element, for example, can be represented by such factors;
profitability, cost-effectiveness, and customer satisfaction. The organizational and
strategic use is represented by another set of factors such as: decision support for top
management and operating levels’ management, evaluation of customer, and product
profitability, which in turn support improving quality and identifying business
strategic needs. The organizational and strategic benefit is represented by:
understanding how the business works, facilitating the implementation of change,
providing support for the organizations, planning and monitoring functions, and
facilitating control functions within the organization.
The set of factors acting as drivers for the implementation of MATs indicated by
Preda and Watts (2004) are analyzed in the current research as drivers for MATs
implementation decisions by business firms, in addition, they are further classified
into financial and non-financial motivational factors. For the current research
purpose, the extent of considering such factors as driving force (motivation) to
implement MATs will be measured to determine whether Institutional theory
underpins MATs implementation within the sampled firms, or if it represents a weak
justification for such implementation. Thus, with respect to the motives influencing
MATs implementation, the following hypotheses can be formulated:
H1 There is no significant relationship between financial motives to implement
MATs and their implementation level within Egyptian enterprises.
H2 There is no significant relationship between non-financial motives to
implement MATs and their implementation level within Egyptian enterprises.
MATs implementation factors are not confined to drivers catalyzing the
implementation of MAIs, they encompass some contextual variables and supply-side
factors acting as barriers to the implementation process of MATs within business
firms. Although supply-side factors could explain the diffusion and implementation
level of MATs that the driving forces failed to justify, few studies tended to explore
the effect of MATs implementation hindering factors (Nassau et al., 2011). Ahmed
and Leftesi (2014) and Abulghasim (2006) explored the management accounting
practices in Libyan manufacturing business firms and agreed that barriers to the
diffusion of advanced management accounting systems were mostly related to
institutional factors among which are: lack of training concerning advanced
techniques, lack of management accounting bodies, and absence of management
accounting education. Then, lower degrees of MAIs implementation barriers were
factors related to characteristics of respondent firms or that personnel in charge of

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executing MAIs adoption decisions, among which are: lack of skilled employees,
lack of financial resources, and business firm ownership type. The least influential
barriers to MAIs implementation included: non-observance of clear benefits or added
value from MATs, no problems encountered with currently applied MATs, and the
high costs related to new advancements in management accounting. For the current
research purposes, the significance of such supply-side factors as barriers hindering
the implementation of MATs will be measured to determine whether attributes of
adopting firms and MATs could explain the level of their implementation within the
sampled enterprises or whether such factors represent a weak justification for
analyzed implementation level. Thus, with respect to the contextual variables and
supply-side barriers influencing MATs implementation, the following hypotheses can
be extracted:
H3 There is no significant relationship between business firm type of activity and
MATs implementation level within Egyptian enterprises.
H4 There is no significant relationship between business firm age and MATs
implementation level within Egyptian enterprises.
H5 There is no significant relationship between business firm size and MATs
implementation level within Egyptian enterprises.
H6 There is no significant relationship between business firm strategy and MATs
implementation level within Egyptian enterprises.
H7 There is no significant relationship between contextual and supply-side factors
(Barriers) and MATs implementation level within Egyptian enterprises.
Prior studies rarely explored the accounting theory underpinning MATs’
implementation within divergent contexts, and the focus was rather directed towards
measuring the extent of diffusion of such techniques and its classification followed
different orientations. The current study tends to explore the relationship between
accounting theories and the implementation level of 44 MATs in a number of
Egyptian enterprises operating across different industries being randomly selected for
analysis. Figure (5) summarizes the proposed conceptual research model illustrating
the relationship among the three main variables deduced from prior studies and
considered for analysis and measurement under the current study.

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Figure (5): Research Conceptual Model: Relations among Variables
The research model can be formulated in the form of a regression equation to
test the research hypotheses. Equation (1) will be considered for analysis and
measurement through the research method.
Y = α + β1х1 + β2х2 + β3х3 + β4х4 + β5х5 + β6х6 + β7х7 +Ɛ (1)
Where (Y) represents MATs implementation level, α represents regression
constant, (β1) represents regression coefficient resulting from change in contingent
variable (х1) financial motives, (β2) represents regression coefficient resulting from
change in contingent variable (х2) non-financial motives, (β3) regression coefficient
resulting from change in contingent variable (х3) type of activity, (β4) regression
coefficient resulting from change in contingent variable (х4) firm age, (β5) regression
coefficient resulting from change in contingent variable (х5) firm size, (β6)
regression coefficient resulting from change in contingent variable (х6) firm strategy,
(β7) regression coefficient resulting from change in contingent variable (х7) supply-
side barriers, and (Ɛ) is random error in regression equation.
3. Method
The empirical study is based on a survey through collecting data from a set of
questions relevant to each variable included in the research model. After conducting
ten pilot interviews with a group of practitioners and academics specialized in the
area of management accounting, some adjustments were conducted as recommended
through the pilot study and a questionnaire was distributed to intended business
firms.
Collected data are linked with each other by the research model by creating
relationships among variables and statistical analysis methods that fit the nature of
variables relationships are used to test such relationships. Within the framework of
Firm
Age
Type of
Activity
Supply-Side
Factors
(Barriers)
Firm
Strategy
MATs
Implementation Drivers
(Non-Financial Motives)
Firm Size
MATs
Implementation Drivers
(Financial Motives)
MATs Implementation
Level
H01
H02
H03
H04
H05
H06
H07

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this research, it should be noted that the empirical study does not end at the limit of
identifying the relationship among the variables of the research hypotheses but is also
concerned with discussing the results of the statistical analysis as an essential step for
deciding and recommending which relationship should exist between the variables
covered by the research model. This part of the research deals with sample selection
and data collection, measuring the research variables, determining the appropriate
statistical techniques to test both the goodness of fit and the research model
hypotheses, analyzing the data statistically, and finally discussing the results of the
statistical analysis.
3.1 Sample Selection and Data Collection
To determine the appropriate sample size in the presence of a basic variable
(MAIs implementation level) in addition to a set of motives and contextual variables
included within the research model (firm size, age of the business establishment, the
nature of the facility’s activity, the strategy that the facility follows, and supply-side
factors), Roscoe’s (1975) rule of thumb indicates that the minimum size for the
sample is 50. In order to achieve this minimum that must be relied upon for data
collection, a survey form was distributed to 200 business firms, and within these 200
survey forms distributed representing the sample under study, 105 forms were
received (with a response rate of 52.5%), and among these 105 forms of the survey
received, 6 questionnaires were excluded due to their invalidity as a result of not
answering more than 10% of the questions in the list (Anh et al., 2018), and 99
survey forms (with a percentage of 49.5% usable rate) were relied upon for use as the
inputs of the SPSS.
The participating firms were selected randomly. The criteria to participate in this
study are that (a) the firms should be for-profit operating firms, (b) the respondents
must be among top management of the businesses firms operating in the Egyptian
market, (c) the respondents must be participants in the decision-making process and
must have good knowledge of the business operations, (D) the business firms
selected should be located along different Egyptian governorates.
Sampled firms included business firms operating in different industry sectors
across different regions within Egypt including Great Cairo, Alexandria, Delta,
Canal, and Upper Egypt. Industry sectors included financials, consumer goods &
services, technology, telecommunications, industrials, oil & gas, utilities, and
healthcare activities. The sample was selected as a subset of the total population of all
the business firms within a specific geographical area. 200 participants were chosen
because they are representative enough for the research work given the secrecy
attached to the exchange of business information in Egypt.
Primary data for the study were obtained through the use of a self-guided
questionnaire to produce data on relevant variables. The primary data are generated
through a self-administered questionnaire. The instrument was administered initially
to a group of academics and professionals in the field as a pilot study and the final

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adjusted questionnaire was translated into Arabic language (to avoid
misinterpretation of statements), and distributed to participating firms to determine
the level of MATs implementation therein. For the purpose of testing the research
hypotheses, information gathered from the survey includes the implementation level
of a set of TMATs and SMATs, firm divergent contextual factors, a set of supply-
side barriers, and a set of MATs implementation drivers. Data were collated from
business firms’ chairmen, department heads, and accountants. The collected data
were analyzed statistically to establish the findings.
The questionnaire encompassed three sections. The first section included 3
statements related to business firm demographics (type of activity, age, and size). The
second section included 11 statements related to firm strategy and 18 questions
related to supply-side factors that represent barriers affecting MATs implementation.
The third section included 21 questions related to drivers (motives) influencing
MATs implementation level and a list of 44 questions related to the implementation
level of 44 TMATs and SMATs (A classified list of 44 MATs under study is shown
in Appendix 1). The list of MATs used in the questionnaire was developed based on
prior research such as Abdel-Kader and Luther (2006), Mbawuni and Anertey (2014),
and Pavlatos and Kostakis (2015).
The research hypotheses were tested through using the survey questionnaire
employing a 5-point Likert scale response options, structured, and customized in line
with the research hypotheses, for the purpose of reflecting the direction of
respondents’ perceptions toward the given questionnaire statements. Multivariate
analysis is used to test the seven research hypotheses through; Analysis of Variance
(ANOVA), Pearson Correlation, and multiple regression analysis, which were used
for data analysis to measure the relationship between the implementation level of
MATs and a set of contextual factors/motives/barriers related to the sampled business
firms.
3.2 Variables Measurement
3.2.1 MATs Implementation Level
Previous studies used the management accounting system as an independent
variable that can be measured by the existence and implementation of different
groups of MATs, whether traditional or strategic, including, but not limited to
Standard Costing; Johnson and Kaplan (1987), Williamson (1996), Lucas (1997),
Zimmerman (1997), Fleischman and Tyson (1998), Guilding et al. (1998),
McWatters et al. (2001), Sulaiman et al. (2005), Küçüksavaş (2006), Marie and Rao
(2010), Badem (2013), Activity Based Costing; Innes (2000), Chen et al. (2001),
Ittner et al. (2002), Baird et al. (2004), Cohen et al. (2005), Moalla (2007), Rahmouni
(2008), Pavlatos and Pagglos (2009), Ngongang (2010), Budgeting; Chenhall and
Brownell (1988), Chow et al. (1988), Shields and Young (1993), Lindquist (1995),
Libby (1999), Libby (2001), Wentzel (2002), Stevens (2002), Lau and Tan (2006),
Davis e t al. (2006), Church et al. (2012), Kenno et al. (2018), Cost-Volume-Profit

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Analysis; Anthony and Govindarajan ( 1995), Zimmerman (1996), , Kaplan and
Atkinson (1998), Weetman (1999), Mcwatters et al. (2001), Blocher et al. (2002),
Hongren et al. (2003), Hilton et al. (2003), Hilton et al. (2006). Maher et al. (2006),
Stefan et al. (2008), Atkinson et al. (2012).
In the current research, the management accounting system is treated as a
dependent variable that can be measured by the implementation level of a group of
TMATs and SMATs. Across 5-Point Likert Scale, forty-four MATs implementation
level is assessed in sampled business firms (Appendix 1), respondents are required to
scale MATs application across 5 levels of application; (1) never was used and won’t
be used in the future, (2) was used in the past but currently not used, (3) wasn’t used
in the past but will be used in the future, (4) somehow used, and (5) completely used.
3.2.2 MATs Implementation Drivers (Motives)
Prior studies measured the impact of several motives and drivers on the decision
to implement or extent of implementing MATs in business firms without analyzing
the link between these drivers and the perceived outcomes approach of the
institutional theory. These drivers include the objective to attain profits (Preda &
Watts, 2004; Mbawuni & Anertey, 2014) and the need to evaluate customers and
product profitability, provide decision support for top management and at operational
levels, and improve quality and other driving factors relevant either to the importance
of MATs to business firms success or the strategic use of such techniques within the
processes of business firms (Preda & Watts, 2004). Besides profitability and strategic
use, drivers for adopting MATs encompassed firms’ responses to political
perspectives in order to secure power (Sturdy, 2004). Using the Likert scale, a set of
21 MATs implementation motives are employed in the research to examine the
impact of adopting the institutional theory on MATs implementation level in
Egyptian business firms (Appendix 2). Respondents are required to scale the extent to
which the factors included in this section represent a motive for applying MATs,
across 5 levels; (1) very weak motive, (2) weak motive, (3) average motive, (4)
strong motive, and (5) very strong motive.
3.2.3 Contextual Variables and Supply-Side Barriers
Multiple contextual variables are used in prior studies in conjunction with
MATs implementation. Table (2) shows the contextual variables, contextual variables
measurements, and references that addressed the contingent variables and their
measures.

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Table 2: Contextual Variables Used in Management Accounting Literature
Variable
Measurement
Reference
Type of Activity
Industry Sector
Abdel-Maksoud et al. (2012)
Nowar (2017)
Firm Age
Firm Maturity
Davila (2005)
Shil et al. (2017)
Firm Size
Number of Employees
Axe and Greve (2017)
Abdel-Maksoud et al. (2012)
Cinquini and Tenucci (2008)
Abdel-kader and Luther (2008)
Asset Value
Nowar (2017)
Firm Strategy
Cost Leadership
/Differentiation
Govindarajan and Fisher (1990)
Abdel-kader and Luther (2008)
Nowar (2017)
Following management accounting literature, the research assessed the impact
of firm size (asset value), firm strategy (cost leadership/differentiation), firm age
(number of years since firm establishment), type of activity (industry sectors), and a
set of 18 supply-side barriers on MATs implementation level (Abulghasim, 2006;
Nassau et al., 2011; Ahmed & Leftesi, 2014). Supply-side barriers (listed in
Appendix 2) are also measured across a 5-Point Likert scale, where respondents are
required to scale the extent to which the factors included in this section represent a
barrier hindering MATs implementation, across 5 levels; (1) very weak barrier, (2)
weak barrier, (3) average barrier, (4) strong barrier, and (5) very strong barrier.
4. Data Analysis and Discussion
The collected data were recorded first on SPSS 20 for Windows. To conduct
data analysis, the author used a one-way analysis of variance (ANOVA), Pearson
Correlation to determine the potential associations between the variables, and a
multiple regression statistical model. The author regressed the independent variables
(contextual factors, barriers, and motives) against the dependent variable (MATs
implementation level).
4.1 Descriptive Statistics
The sample consists of 99 business firms. Demographic distribution of the
sample reveals the following: (1) For the Type of Activity variable: Service firms
(34.3%), Commercial firms (29.3%), Industrial firms (15.2%), and other sectors
(21.2%), (2) For Firm Age variable: firms with more than 20 years (53.5%), firms
with 15-20 years (22.2%), firms with 10-15 years (9.1%), firms with 5-10 years
(7.1%), and firms less than 5 years (8.1%), (3) For Firm Size variable: firms with
more than 400M (27.3%), firms with 300-400M (13.1%), firms with 200-300M
(36.4%), firms with 100-200M (8.1%), and firms with less than 100M (15.2%).

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Descriptive statistics related to the dependent variable, such as Management
Accounting Implementation, is presented in Table (3), where the forty-four MATs
analyzed, are classified into 5 groups namely; Costing, Performance Evaluation,
Decision Support, Budgeting, and Strategic Analysis. For the techniques within each
group, the adoption rate within the sampled firms is given based on frequency
descriptive analysis for each technique. The adoption rate reveals that TMATs
adoption in Egypt is much higher than SMATs. This result goes along with the
results of several research studies analyzing the adoption of MATs in emerging
economies (e.g., Bromwich & Bhimani, 1989; Guilding et al., 2000; Abdel-Kader &
Luther, 2008).
Table 3: Descriptive Statistics for Dependent Variable
Costing
Adoption
Rate %
Batch/Job Order Costing
95
Process Costing
92
Absorption Costing
84
Activity Based Costing ABC
87
Activity Based Management ABM
96
Activity Based Planning ABP
77
Performance Evaluation
Standard Costing & Variance Analysis
90
Performance Evaluation: ROI
93
Performance Evaluation: EVA
93
Controllable Profit
89
Divisional Profit
85
Residual Income
83
Customer Satisfaction Surveys
91
Non-Financial Measures
85
Performance Evaluation: BSC
71
Decision Support
Variable Costing
88
CVP Analysis
86
Product Profitability Analysis
84
Benchmarking of Operational Process
90
Benchmarking of Product/Service Characteristics
80
Total Quality Management
84
Just-In-Time
76
Budgeting
Activity Based Budgeting ABB
85
Budgeting for Long Range Planning
95
Budgeting for Coordinating Performance of Business Units
38
Budgeting for Daily Operations
59
Capital Budgeting Tools
58
Flexible Budgeting
65
Budgeting for Controlling Costs
80
Budgeting for Evaluating Manager’s Performance
82
Strategic Analysis
Long-Range Forecasting
98
Strategic Plans Developed with Budgets
88
Industry Analysis
87
Analysis of Competitive Position
86

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62
Shareholder Value Analysis
77
Target Costing
67
Life Cycle Costing
74
Value Chain Analysis
69
Value Engineering
65
Customer Profitability Analysis
78
Product/Service Life Cycle Analysis
82
Strategic Cost Management
77
Strategic Pricing
74
Competitor Cost Assessment
76
To test for the normality of the data set (i.e., the degree to which the distribution
of the sample data corresponds to a normal distribution), the Kolmogorov-Smirnov
test is used. Since the significance level of Kolmogorov-Smirnov is greater than 0.05
(0.065) for all the research constructs, it can be concluded that all data are normally
distributed. Moreover, the error is normally distributed since the significance level of
Kolmogorov-Smirnov is greater than 0.05 (0.2). Thus, normally distributed data can
be analyzed using parametric tests of hypotheses.
4.2 Reliability Tests
Prior to statistically analyzing which of the identified independent variables
have an impact on MATs implementation level in sampled Egyptian business firms,
the reliability of sampled firms’ responses to the items included in the questionnaire
should be tested. Cronbach's alpha is the widely used measure of reliability
coefficient. As indicated by Hair et al. (2007), Cronbach's Alpha measure of
reliability that ranges from 0 to 1, with values of 0.6 to 0.7 is deemed the lower limit
of acceptability. Thus, it is used in the research to measure the validity of sampled
firms' responses regarding the measures suggested for independent variables: firm
type of activity, firm age, firm size, firm strategy, MATs implementation motives,
and hindering barriers. According to data analysis, the reliability coefficient and
intrinsic validity for research dimensions are (0.925) and (0.926) respectively. This
refers to high internal consistency based on the average inter-item correlation.
According to Table (4) related to the model summary, an adjusted R2 of 0.215
indicates that about 22% of the variation in MATs implementation level in sampled
Egyptian business firms can be explained by independent variables of the model.
Therefore, the outcome variable is moderately well explained by the independent
variables.
Table 4: Explanation Level of the Model
R
R Square
Adjusted R Square
St. Error of the Estimate
Durbin-Watson
0.528
0.279
0.215
0.36091
1.716
-Predictors: (Constant), Supply-Side Barriers, Firm Size, Motivation - Financial Drivers, Type of Activity,
Cost Leadership Strategy, Firm Age, Differentiation Strategy, Motivation – Non-Financial Drivers
-Dependent Variable: Management Accounting

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Table 5: Peasrson Correlation Matrix
Study Variables
Type
of Activity
Firm
Age
Firm
Size
Cost Leadership
Strategy
Differentiation
Strategy
Motivation
Non-Financial
Drivers
Motivation –
Financial
Drivers
Supply-
Side
Barriers
Management
Accounting
Type of Activity
Pearson Correlation
1
Sig. (2-tailed)
N
99
Firm Age
Pearson Correlation
.318**
1
Sig. (2-tailed)
.001
N
99
99
Firm Size
Pearson Correlation
.338**
.476**
1
Sig. (2-tailed)
.001
.000
N
99
99
99
Cost Leadership Strategy
Pearson Correlation
-.093
.309**
.177
1
Sig. (2-tailed)
.361
.002
.080
N
99
99
99
99
Differentiation Strategy
Pearson Correlation
-.166
.244*
.087
.595**
1
Sig. (2-tailed)
.101
.015
.389
.000
N
99
99
99
99
99
Motivation –
Non-Financial
Drivers
Pearson Correlation
.000
.078
-.023
.517**
.538**
1
Sig. (2-tailed)
1.000
.445
.825
.000
.000
N
99
99
99
99
99
99
Motivation – Financial Drivers
Pearson Correlation
-.052
.025
-.013
.416**
.419**
.832**
1
Sig. (2-tailed)
.608
.809
.900
.000
.000
.000
N
99
99
99
99
99
99
99
Supply-Side Barriers
Pearson Correlation
-.150
.075
-.045
.226*
.270**
.146
.089
1
Sig. (2-tailed)
.139
.464
.657
.025
.007
.150
.383
N
99
99
99
99
99
99
99
99
Management Accounting
Pearson Correlation
-.124
.074
.062
.283**
.397**
.462**
.401**
.221*
1
Sig. (2-tailed)
.221
.468
.541
.004
.000
.000
.000
.028
N
99
99
99
99
99
99
99
99
99
**Correlation is significant at the 0.01 level (2-tailed).
*Correlation is significant at the 0.05 level (2-tailed).

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4.3 Peasrson Correlation
Rational correlation among variables is tested in Table (5) to determine if there
is a significant relationship among variables. Pearson Correlation matrix is used to
detect the expected multicollinearity among any of the independent variables. Anh et
al. (2018) stated that multicollinearity exists if the Pearson Correlation coefficient is
greater than 70% between any two independent variables. According to the
correlation matrix given in Table (5), it is revealed that there are significant positive
linear relationships only among; type of activity, firm age, and firm size, with
correlation coefficients of less than 70%. The table indicates that cost leadership
strategy, differentiation strategy, and implementation motives (financial and non-
financial) are significantly correlated with the dependent variable (MATs
implementation level) at the 1% significance level, while supply-side barriers are
significantly correlated with MATs implementation level at the 5% level.
4.4 Analysis of Variance ANOVA (Appropriatness of the Model)
Results of the analysis of variance (ANOVA) in Table (6) with probability value
= 0.000 (Sig. ≤ 0.01) show that at a 99% confidence level, the model proposed based
on the literature review is completely consistent with the actual data. That is, the
independent variables are linearly correlated with the dependent variable.
Table 6: Analysis of Variance- ANOVA
Sum of Squares
df
Mean Square
F
Sig.
Regression
4.536
8
.567
4.353
.000
Residual
11.723
90
.130
Total
16.259
98
-Dependent Variable: Management Accounting
-Predictors: (Constant), Supply-Side Barriers, Firm Size, Motivation - Financial Drivers, Type of Activity,
Cost Leadership Strategy, Firm Age, Differentiation Strategy, Motivation – Non-Financial Drivers
The results of the multicollinearity test through Variance Inflation Factor (VIF)
in Table (7) show that the VIF coefficients of all the factors in the model are smaller
than 5, and tolerance greater than 0.2, proving that the independent variables are not
closely related. Therefore, there is no multicollinearity observed across variables.
Thisresult confirms Pearson Correlation.

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Table 7: Multicollinearity
Unstandardized
Coefficients
Standardized
Coefficients
Beta
t
Sig.
Collinearity
Statistics
B
Std. Error
Tolerance
VIF
(Constant)
1.688
.403
4.190
.000
Type of Activity
-.034
.029
-.123
-1.177
.242
.739
1.353
Firm Age
.001
.035
.004
.038
.970
.650
1.538
Firm Size
.035
.032
.116
1.090
.278
.709
1.410
Cost Leadership Strategy
-.050
.073
-.084
-.687
.494
.536
1.867
Differentiation Strategy
.105
.076
.170
1.369
.174
.522
1.917
Motivation - Financial Drivers
.040
.111
.058
.357
.722
.301
3.323
Motivation – Non-Financial Drivers
.235
.122
.350
1.922
.058
.242
4.134
Supply-Side Barriers
.130
.098
.125
1.325
.189
.901
1.110
-Dependent Variable: Management Accounting
4.5 Regression Analysis
Regression analysis is carried out to explore the most significant factor that
impacts MATs implementation level as shown in Table (8). According to regression
coefficients’ significance levels, the variables: type of activity, firm age, firm size,
cost leadership strategy, differentiation strategy, financial motives, and supply-side
barriers had Sig. > 0.05, showing no significant relationship with MATs
implementation as a dependent variable. The variable non-financial motives
regression coefficient has Sig. < 0.05. Therefore, the correlation is statistically
significant with the dependent variable, MATs implementation level, at the
confidence level of 95% or more.
Table 8: Regression Analysis
Unstandardized
Coefficients
Standardized
Coefficients
Beta
t
Sig.
95.0%
Confidence
Interval for B
B
Std. Error
Lower Bound
Upper Bound
(Constant)
1.688
.403
4.190
.00
.887
2.488
Type of Activity
-.034
.029
-.123
-1.177
.24
-.093
.024
Firm Age
.001
.035
.004
.038
.97
-.069
.071
Firm Size
.035
.032
.116
1.090
.28
-.029
.098
Cost Leadership Strategy
-.050
.073
-.084
-.687
.49
-.194
.094
Differentiation Strategy
.105
.076
.170
1.369
.17
-.047
.257
Motivation - Financial Drivers
.040
.111
.058
.357
.72
-.181
.260
Motivation – Non-Financial Drivers
.235
.122
.350
1.922
.05
-.008
.477
Supply-Side Barriers
.130
.098
.125
1.325
.189
-.065
.325
-Dependent Variable: Management Accounting
According to regression analysis, it can be concluded, as per the coefficient of
determination, that the independent variable ‘financial motives’ explains 22% of the
variation of the dependent variable, while the remaining percent is due to either
random error in the regression model or other independent variables excluded from
the regression model. In addition, all the variables in the model (except non-financial
motives) have regression coefficients significance > 0.05, which is consistent with

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the hypothesized direction of the relationship. Based on data analysis, Table (9)
summarizes the results of testing the research hypotheses.
Table 9: Hypotheses Testing Results
Hypotheses
NULL
Option
Alternate
Option
H1 There is no significant relationship between financial motives to MATs
implementation and their implementation level within Egyptian enterprises.
Accepted
Rejected
H2 There is no significant relationship between non-financial Motives to MATs
implementation and their implementation level within Egyptian enterprises.
Rejected
Accepted
H3 There is no significant relationship between business firm type of activity and
MATs implementation level within Egyptian enterprises.
Accepted
Rejected
H4 There is no significant relationship between business firm age and MATs
implementation level within Egyptian enterprises.
Accepted
Rejected
H5 There is no significant relationship between business firm size and MATs
implementation level within Egyptian enterprises.
Accepted
Rejected
H6 There is no significant relationship between business firm strategy and MATs
implementation level within Egyptian enterprises.
Accepted
Rejected
H7 There is no significant relationship between contextual and supply-side
factors (barriers) and MATs implementation level within Egyptian enterprises.
Accepted
Rejected
Regression analysis is carried out to explore the most significant factor that
impacts MATs implementation level. Results of the analysis revealed that there is no
significant relationship between firm attributes such as strategy, age, size, and type of
activity and MAPs adoption level in Egyptian firms. No significant relationship is
revealed between managers’ perception of MATs implementation financial motives
and the implementation level of such MAIs. A significant relationship is revealed
between managers’ perception of MATs implementation non-financial motives and
MAIs implementation. The results agree with prior studies that emphasized that
MATs implementation decision is derived from a group of external and internal
factors (e,g., Preda & Watts, 2004; Sturdy, 2004; Mbawuni & Anertey, 2014) and
disagree with studies that referred MATs implementation to contingent factors such
as firm size, age, strategy, and type of activity (e.g., Krumwiede, 1998; ; Shields,
1995; Brown et al. 2004; Brown et al. 2004; Lu & Pan, 2007 ; Al-Omiri & Drury,
2007; De La Villarmois & Levant 2011; Zhang et al. 2015).
5. Conclusion, Limitation, and Future Research
The research aims to investigate the impact of a set of driving forces (motives)
on management decisions to adopt MATs within the business and the supply-side
factors (barriers) existing within the business firms’ context on the level of MATs
implementation. Therefore, a study was conducted on 200 Egyptian firms. The results
showed that there is no relationship between forms’ contingency factors, such as size,
age, and strategy on the implementation level of MATs. No relationship was also
found between supply-side factors or different implementation barriers on the MATs
implementation level.
Results revealed that motives, which are the business owner’s point of view
regarding outcomes perceived from applying MATs, can predict the implementation

AJCCR, Vol. 3, No. 3, 2023
67
level of such techniques. This may suggest that in order to increase the
implementation level of MATs, the resulting outcomes of implementation and their
impact on firm performance must be assessed. If the owner has better awareness and
good knowledge of the outcomes of these techniques, in terms of improving quality,
identifying firm strategic needs, coordinating business processes, supporting planning
and monitoring functions, and facilitating the implementation of change, the
enterprise will be able to apply MATs with high levels. In addition, businesses need
to increase the awareness of the successful application of MATs by peer local and
international enterprises to imitate their implementation of these techniques, thus
minimizing the risk of failure. The results support prior studies suggesting the use of
institutional theory in conjunction with MATs and support earlier studies criticizing
contingency theory as a base of management accounting literature (e.g., Chenhall,
2003).
Most of the accounting literature that dealt with the innovations of management
accounting was based on one of the following intellectual approaches or theories:
descriptive theory, contingency theory, and institutional theory. Within this research,
MAIs are categorized into the five areas of management accounting; cost accounting,
budgeting, management decision-making, performance evaluation, and strategic
management accounting. The attempt to find a relationship between accounting
literature dealing with MATs and the approaches or theories that embedded the
application of these techniques suggests that each of the MAIs has taken a trend or
theory from the accounting theories or approaches. Addressing all MATs is not
feasible in single research. Therefore, the current research focused on studies
addressing the outcomes resulting from the application of MATs in the area of cost
measurement “ABC” and performance evaluation “BSC”, considering that the ABC
and the BSC are the most discussed and controversial MATs. This research did not
address techniques related to budgeting or management decision-making; hence, such
techniques can be addressed in future research. In addition to this limitation, MATs
are not analyzed under all the theories and the concepts behind their implementation,
only the institutional theory and the contingency theory were addressed by the
research since they are the most common theories in MATs literature (Bromwich &
Scapens, 2016).
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Appendix (1) MATs Analyzed
Costing
Planning and Budgeting
Batch/Job Order Costing
Capital Budgeting Tools
Process Costing
Flexible Budgeting
Activity Based Costing ABC
Budgeting for Controlling Costs
Activity Based Management ABM
Budgeting Systems for Day-by-Day Operations
Activity Based Planning ABP
Budgeting for Planning Financial Position & Cash Flows
Absorption Costing
Budgeting for Coordinating Activities across Business Units
Decision- Making Support
Budgeting for Evaluating Ma nager’s Performance
CVP Analysis
Activity Based Budgeting ABB
Variable Costing
Strategy Analysis
Product Profitability Analysis
Industry Analysis
Benchmarking of Operational Process
Analysis of Competitive Position
Total Quality Management
Shareholder Value Analysis
Just-In-Time
Value Chain Analysis
Benchmarking of Product/Service Characteristics
Value Engineering
Performance Evaluation
Product/Service Life Cycle Analysis
Standard Costing & Variance Analysis
Target Costing
Performance Evaluation: Customer Satisfaction Surveys
Long-Range Forecasting
Performance Evaluation: Controllable Profit
Competitor Cost Assessment
Performance Evaluation: Divisional Profit
Customer Profitability Analysis
Performance Evaluation: Non Financial Measures
Strategic Cost Management
Performance Evaluation: Residual Income
Life Cycle Costing
Performance Evaluation: ROI
Strategic Pricing
Performance Evaluation: EVA
Strategic Plans Developed with Budgets
Performance Evaluation: BSC

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Appendix (2) Motives/Barriers Affecting MATs Implementation
Motives
Barriers
1. Profit maximization
1. Lack of an active professional
management accounting society
2. Cost effectiveness
2. Lack of local training programs about
advanced techniques
3. Cost quality
3. Lack of relevant courses on such
advanced techniques in academic
institutions
4. Production efficiency
4. Lack of software packages relevant to
advanced techniques
5. Customer satisfaction
5. Lack of up-to-date publications about
advanced techniques
6. Employees satisfaction
6. Absence of Egyptian companies that
have adopted advanced techniques
7. Product development
7. Lack of relevant employee skills
because of insufficient training provided
by the company
8. Decision support for senior management
8. Lack of financial resources
9. Decision support for operating levels
9. Lack of decision-making autonomy at
lower levels
10. Evaluation of customer and product profitability
10. Company ownership type
11. For responsibility accounting purposes
11. Insufficient support from top
management
12. Supports efforts to improve quality
12. No significant problems with current
system
13. Identify business strategic needs
13. Lack of confidence in the value of
advanced techniques
14. Facilitate business strategic implication
14. Lack of compatibility of the advanced
techniques with existing system
15. Contributes to a better understanding of how the
business works
15. High cost to implement these advanced
techniques
16. Shows whether the business is following its business
strategy
16. Complexity of the advanced techniques
17. Facilitates the implementation of change
17. Benefits from advanced techniques are
difficult to observe
18. Facilitates co-operation across functional boundaries
18. No significant benefits perceived from
adopting advanced techniques
19. Provides support for the organizations planning
and monitoring functions
20. Are used at all levels of the organization
21. Facilitates integrated control within the organization