The Impact of Strategic Management Accounting on Corporate Sustainability in Nigerian Banks
Keywords:
strategic management accounting, economic sustainability, social sustainability, environmental sustainability, corporate sustainability, Nigerian banks
Abstract
The banking sector is a core element of any nation and, the need for banks to operate in a manner that will ensure their continued relevance and sustainability cannot be over-emphasized. This study investigates the Strategic Management Accounting (SMA) practices of Nigerian Banks with the aim to assess their impact on corporate sustainability. The specific objectives of the study were to evaluate the impact of SMA usage by the banks on their Economic, Social and Environmental sustainability. The study adopted a survey research design to obtain data from 102 accounts and finance personnel of fourteen commercial banks in Nigeria. Descriptive statistics, correlation and regression techniques were applied to analyze the data. The results showed that SMA usage by Nigerian Banks has a strong and positive relationship and also a significant impact on the economic, environmental and social sustainability. Usage of SMA also had a significant impact on the overall sustainability of the Banks. It is recommended that banks’ management teams key into the usefulness of SMA as a meaningful internal reporting tool that aids the quantitative and qualitative evaluation of performances. SMA usage is also recommended because it will provide a means for banks to assess the economic, social and environmental impact of their activities so that they can focus on measures that fosters sustainability.
References
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Abushaiba, I. A., & Zainuddin, Y. (2012). Performance measurement system design, competitive
capability, and performance consequences conceptual like. International Journal of Business and Social Science, 3 (11), 184-193.
Ahmad, K., & Zabri, S.M. (2016). Management Accounting Practices Among Small and Medium Enterprises. Proceedings of the 28th International Business Information Management Association Conference. 9-10 November 2016, Seville, Spain
Akenbor, C. O., & Okoye E. I. (2012). The adoption of strategic management accounting in Nigerian manufacturing firms. International Journal of Arts and Humanities, 1(3), 270-287.
Albelda, E. (2011). The role of management accounting practices as facilitators of the environmental management. Sustainability, Accounting, Management and Policy Journal, 2 (1), 76-100.
Angelakis, G., Theriou, N., & Floropoulos I. (2010). Adoption and benefits of management accounting practices: Evidence from Greece and Finland. Advances in Accounting, incorporating Advances in International Accounting, 26, 87-96.
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Bhimani, A., & Langfield-Smith, K. (2007). Structure, formality and the importance of financial and non-financial information in strategy development and implementation. Management Accounting Research, 18, 3–31.
Bonacchi, M., Perego, P. (2019). Customer accounting: creating value with customer analytics. Switzerland: Springer International Publishing
Cadez, S., & Guilding, C. (2008). An exploratory investigation of an integrated contingency model of strategic management accounting. Accounting, Organisations and Society, 33(7–8), 836-863.
Cadez, S., & Guilding, C. (2012). Strategy, strategic management accounting and performance: A configurational analysis. Industrial Management & Data Systems, 112 (3), 484-501
Chenhall, R. H. (2003). Management control systems design within its organizational context: findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28, 127-168.
Chenhall, R., & Langfield-Smith, K. (1998). Adoption and benefits of management accounting practices: An Australian study. Management accounting research, 9, 1-19.
Cooper, R., & Slagmulder, R. (1999). Develop profitable new products with target costing. Sloan Management Review, 40, 23–33.
Drazin, R., & Van De Ven, A. (1985). Alternative forms of fit in contingency theory. Administrative Science Quarterly, 30, 514-540.
Elkington, J. (2004). Enter the triple bottom line. Retrieved December 1, 2011, from http://www.johnelkington.com/TBL-elkington-chapter.pdf
Ferreira, A., Moulang, C., Hendro, B. (2010). Environmental management accounting and innovation: An exploratory analysis. Accounting, Auditing & Accountability Journal, 23(7), 920- 948.
Frezatti, F., Bido, D., Cruz, A., & Machado, M. (2015). The Structure of Artefacts of Management Control in the Innovation Process: Does Exist Association with the Strategic Profile? Brazilian Business Review, 12 (1), 128-153
Gerdin, J., & Greve, J. (2004). Forms of contingency fit in management accounting research-a critical review. Accounting, Organizations and Society, 29, 303-326
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GRI. (2013b). G4 Sustainability reporting guidelines. Retrieved from https://www.globalreporting.org/resourcelibrary/GRIG4-Part1-Reporting-Principles-and-Standard-Disclosures.pdf
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Haldma, T., & Laats, K. (2002). Contingencies influencing the management accounting practices of Estonian manufacturing companies. Management Accounting Research, 13, 379–400.
Hindley, T., & Buys, P.W. (2012). Integrated reporting compliance with the Global Reporting Initiative framework: An analysis of the South African mining industry. International Business & Economics Research Journal, 11 (11), 1249-1260. Retrieved from http://www.cluteinstitute.com/ojs/index.php/IBER/article/view/7372/7440
Hoque Z. (2002). Strategic Management Accounting: Concepts, Processes and Issues, London: Spiro Press.
Hyvonen, J. (2005). Adoption and benefits of management accounting systems: Evidence from Finland and Australia. Advances in International Accounting, 18, 97-120.
Ioannou, I. & Serafeim, G. (2014). The consequences of mandatory corporate sustainability reporting: Evidence from four Countries. Harvard Business School Working paper 11-100. Retrieved from http://www.hbs.edu/faculty/Publication%20Files/11-100_7f383b79-8dad-462d-90df-324e298acb49.pdf
Iqbal, N., Ahmad, N., Hamad, N., Bashir, S. & Sattar, W. (2014). Corporate social responsibility and its possible impact on firm’s financial performance in banking sector of Pakistan. Arabian Journal of Business and Management Review, 3 (12), 150-155.
Iredele, O. O., & Akinlo, O. O. (2015). Environmental disclosures in the annual reports of quoted companies in Nigeria. PPC International Journal Series, 2(1),269-282.
Iwedi, M. (2017). Bank Failure in Nigeria: Evidence of Prudential Regulator Laxity. Frontiers in Management Research, 1(4), 141-150.
James, M. L. (2013). Sustainability and integrated reporting: Opportunities and strategies for small and midsize companies. Entrepreneurial Executive, 18, 17-28.
Kirli, M., & Gümüş, H. (2011). The implementation of strategic management accounting based on value chain analysis: value chain accounting. Retrieved from http://www.harungumus.com/~harungum/images/CV/icbmef-2011-9EYLUL.pdf
Langfield-Smith, K. (2008). Strategic management accounting: How far have we come in 25 years? Accounting, Auditing & Accountability Journal, 21(2), 204-228.
Maguire, M. (2011). The Future of Corporate Social Responsibility Reporting. Frederick S. Pardee Center for the Study of the Longer-Range Future. Retrieved from http://www.bu.edu/pardee/files/2011/01/PardeeIIB-019-Jan-2011.pdf
Mamat, M, & Ismail, A. (2011). Market orientation and business performance: The study of Bumiputera furniture industry in Kelantan. American International Journal of Contemporary Research, 1 (3), 88-98
Marx, B. & Van Dyk, V. (2011). The company as a responsible corporate citizen: An analysis of the board's commitment to sustainability. Journal of Economic and Financial Sciences, 4 (1), 81-98.
Miles, R., & Snow, C. (1978). Organisational strategy, structure and process. New York: McGraw-Hill.
Nigerian Deposit Insurance Corporation (2020). https://ndic.gov.ng/failure-resolution/closed-financial-institutions/. Accessed 02032021
Oboh, C. S., & Ajibolade, S. O., (2017). Strategic management accounting and decision making: A survey of the Nigerian Banks. Future Business Journal, 3(2), 119- 137. doi: http://dx.doi.org/10.1016/j.fbj.2017.05.004
Ojua, M. (2016). Strategic management accounting practices among indigenous Nigerian manufacturing enterprises. Open science Journal, 1 (2), 1-15.
Ojua, M. O. (2017). The desirability of the adoption of strategic management accounting techniques (SMATS) for decision making by agricultural firms in Nigeria. Imperial Journal of Interdisciplinary Research, 3 (1), 1635-1648.
Oyewo, B. & Ajibolade, S. (2019). “Does the Use of Strategic Management Accounting Techniques Creates and Sustains Competitive Advantage? Some Empirical Evidence.” Annals of Spiru Haret University. Economic Series, 19(2), 61-91, doi: https://doi.org/10.26458/1923
Oyewo, B. M., & Isa, R. (2017). Improving corporate sustainability reporting through the adoption of integrated reporting: A study of Nigerian and South African firms. African Accounting and Finance Journal, 1 (1), 52-94
Ramljak, B., & Rogošić, A. (2012). Strategic Management Accounting Practices in Croatia. The Journal of International Management Studies, Vol. 7, No. 2, pp. 93 – 100.
Roslender, R., & Hart, S. J. (2003). In Search of Strategic Management Accounting: Theoretical and Field Study Perspectives. Management Accounting Research, 14 (1), 255-279.
Santini, F. (2013). Strategic management accounting and financial performance in the small and medium sized Italian manufacturing enterprises. Management control, 1, 77-107.
Simmonds, K. (1981). Strategic management accounting. Management Accounting, 59, 26–29.
Tung, A., Baird, K., & Schoch, H.P. (2011). Factors influencing the effectiveness of performance measurement systems. International Journal of Operations & Production Management, 31(12), 1287-1310.
Aboramadan, M., & Borgonovi, E. (2016). Strategic management practices as a key determinant of superior non-governmental organisations performance. Problems of management in the 21st century, 11 (2), 71-92.
Abushaiba, I. A., & Zainuddin, Y. (2012). Performance measurement system design, competitive
capability, and performance consequences conceptual like. International Journal of Business and Social Science, 3 (11), 184-193.
Ahmad, K., & Zabri, S.M. (2016). Management Accounting Practices Among Small and Medium Enterprises. Proceedings of the 28th International Business Information Management Association Conference. 9-10 November 2016, Seville, Spain
Akenbor, C. O., & Okoye E. I. (2012). The adoption of strategic management accounting in Nigerian manufacturing firms. International Journal of Arts and Humanities, 1(3), 270-287.
Albelda, E. (2011). The role of management accounting practices as facilitators of the environmental management. Sustainability, Accounting, Management and Policy Journal, 2 (1), 76-100.
Angelakis, G., Theriou, N., & Floropoulos I. (2010). Adoption and benefits of management accounting practices: Evidence from Greece and Finland. Advances in Accounting, incorporating Advances in International Accounting, 26, 87-96.
Bebbington, J., & Gray, R. (2001). An Account of Sustainability: Failure success and a
reconceptualisation. Critial Perspectives on Accounting, 557 - 587
Bhimani, A., & Langfield-Smith, K. (2007). Structure, formality and the importance of financial and non-financial information in strategy development and implementation. Management Accounting Research, 18, 3–31.
Bonacchi, M., Perego, P. (2019). Customer accounting: creating value with customer analytics. Switzerland: Springer International Publishing
Cadez, S., & Guilding, C. (2008). An exploratory investigation of an integrated contingency model of strategic management accounting. Accounting, Organisations and Society, 33(7–8), 836-863.
Cadez, S., & Guilding, C. (2012). Strategy, strategic management accounting and performance: A configurational analysis. Industrial Management & Data Systems, 112 (3), 484-501
Chenhall, R. H. (2003). Management control systems design within its organizational context: findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28, 127-168.
Chenhall, R., & Langfield-Smith, K. (1998). Adoption and benefits of management accounting practices: An Australian study. Management accounting research, 9, 1-19.
Cooper, R., & Slagmulder, R. (1999). Develop profitable new products with target costing. Sloan Management Review, 40, 23–33.
Drazin, R., & Van De Ven, A. (1985). Alternative forms of fit in contingency theory. Administrative Science Quarterly, 30, 514-540.
Elkington, J. (2004). Enter the triple bottom line. Retrieved December 1, 2011, from http://www.johnelkington.com/TBL-elkington-chapter.pdf
Ferreira, A., Moulang, C., Hendro, B. (2010). Environmental management accounting and innovation: An exploratory analysis. Accounting, Auditing & Accountability Journal, 23(7), 920- 948.
Frezatti, F., Bido, D., Cruz, A., & Machado, M. (2015). The Structure of Artefacts of Management Control in the Innovation Process: Does Exist Association with the Strategic Profile? Brazilian Business Review, 12 (1), 128-153
Gerdin, J., & Greve, J. (2004). Forms of contingency fit in management accounting research-a critical review. Accounting, Organizations and Society, 29, 303-326
Gould, S. (2011). Accounting for sustainability. Accounting Plus, 1, 19- 20.
GRI. (2013a). G4 sector disclosure for financial services. Retrieved from https://www.globalreporting.org/resourcelibrary/GRI-G4-Financial-Services-Sector-Disclosures.pdf
GRI. (2013b). G4 Sustainability reporting guidelines. Retrieved from https://www.globalreporting.org/resourcelibrary/GRIG4-Part1-Reporting-Principles-and-Standard-Disclosures.pdf
Grigore, A., Bagu, C., & Radu, C. (2009). The strategic performance management process. Annals of Faculty of Economics. 4. 276-279.
Haldma, T., & Laats, K. (2002). Contingencies influencing the management accounting practices of Estonian manufacturing companies. Management Accounting Research, 13, 379–400.
Hindley, T., & Buys, P.W. (2012). Integrated reporting compliance with the Global Reporting Initiative framework: An analysis of the South African mining industry. International Business & Economics Research Journal, 11 (11), 1249-1260. Retrieved from http://www.cluteinstitute.com/ojs/index.php/IBER/article/view/7372/7440
Hoque Z. (2002). Strategic Management Accounting: Concepts, Processes and Issues, London: Spiro Press.
Hyvonen, J. (2005). Adoption and benefits of management accounting systems: Evidence from Finland and Australia. Advances in International Accounting, 18, 97-120.
Ioannou, I. & Serafeim, G. (2014). The consequences of mandatory corporate sustainability reporting: Evidence from four Countries. Harvard Business School Working paper 11-100. Retrieved from http://www.hbs.edu/faculty/Publication%20Files/11-100_7f383b79-8dad-462d-90df-324e298acb49.pdf
Iqbal, N., Ahmad, N., Hamad, N., Bashir, S. & Sattar, W. (2014). Corporate social responsibility and its possible impact on firm’s financial performance in banking sector of Pakistan. Arabian Journal of Business and Management Review, 3 (12), 150-155.
Iredele, O. O., & Akinlo, O. O. (2015). Environmental disclosures in the annual reports of quoted companies in Nigeria. PPC International Journal Series, 2(1),269-282.
Iwedi, M. (2017). Bank Failure in Nigeria: Evidence of Prudential Regulator Laxity. Frontiers in Management Research, 1(4), 141-150.
James, M. L. (2013). Sustainability and integrated reporting: Opportunities and strategies for small and midsize companies. Entrepreneurial Executive, 18, 17-28.
Kirli, M., & Gümüş, H. (2011). The implementation of strategic management accounting based on value chain analysis: value chain accounting. Retrieved from http://www.harungumus.com/~harungum/images/CV/icbmef-2011-9EYLUL.pdf
Langfield-Smith, K. (2008). Strategic management accounting: How far have we come in 25 years? Accounting, Auditing & Accountability Journal, 21(2), 204-228.
Maguire, M. (2011). The Future of Corporate Social Responsibility Reporting. Frederick S. Pardee Center for the Study of the Longer-Range Future. Retrieved from http://www.bu.edu/pardee/files/2011/01/PardeeIIB-019-Jan-2011.pdf
Mamat, M, & Ismail, A. (2011). Market orientation and business performance: The study of Bumiputera furniture industry in Kelantan. American International Journal of Contemporary Research, 1 (3), 88-98
Marx, B. & Van Dyk, V. (2011). The company as a responsible corporate citizen: An analysis of the board's commitment to sustainability. Journal of Economic and Financial Sciences, 4 (1), 81-98.
Miles, R., & Snow, C. (1978). Organisational strategy, structure and process. New York: McGraw-Hill.
Nigerian Deposit Insurance Corporation (2020). https://ndic.gov.ng/failure-resolution/closed-financial-institutions/. Accessed 02032021
Oboh, C. S., & Ajibolade, S. O., (2017). Strategic management accounting and decision making: A survey of the Nigerian Banks. Future Business Journal, 3(2), 119- 137. doi: http://dx.doi.org/10.1016/j.fbj.2017.05.004
Ojua, M. (2016). Strategic management accounting practices among indigenous Nigerian manufacturing enterprises. Open science Journal, 1 (2), 1-15.
Ojua, M. O. (2017). The desirability of the adoption of strategic management accounting techniques (SMATS) for decision making by agricultural firms in Nigeria. Imperial Journal of Interdisciplinary Research, 3 (1), 1635-1648.
Oyewo, B. & Ajibolade, S. (2019). “Does the Use of Strategic Management Accounting Techniques Creates and Sustains Competitive Advantage? Some Empirical Evidence.” Annals of Spiru Haret University. Economic Series, 19(2), 61-91, doi: https://doi.org/10.26458/1923
Oyewo, B. M., & Isa, R. (2017). Improving corporate sustainability reporting through the adoption of integrated reporting: A study of Nigerian and South African firms. African Accounting and Finance Journal, 1 (1), 52-94
Ramljak, B., & Rogošić, A. (2012). Strategic Management Accounting Practices in Croatia. The Journal of International Management Studies, Vol. 7, No. 2, pp. 93 – 100.
Roslender, R., & Hart, S. J. (2003). In Search of Strategic Management Accounting: Theoretical and Field Study Perspectives. Management Accounting Research, 14 (1), 255-279.
Santini, F. (2013). Strategic management accounting and financial performance in the small and medium sized Italian manufacturing enterprises. Management control, 1, 77-107.
Simmonds, K. (1981). Strategic management accounting. Management Accounting, 59, 26–29.
Tung, A., Baird, K., & Schoch, H.P. (2011). Factors influencing the effectiveness of performance measurement systems. International Journal of Operations & Production Management, 31(12), 1287-1310.
Published
2021-06-08
How to Cite
Ogunleye, O. J., Fagboro, G. D., & Oparinde, D. O. (2021). The Impact of Strategic Management Accounting on Corporate Sustainability in Nigerian Banks. Global Journal of Accounting, 7(1), 69-79. Retrieved from http://gja.unilag.edu.ng/article/view/1254
Section
Articles
