How does management accounting affect entrepreneurial orientation in SMEs? A structural equation modelling

Abstract

Management accounting practices (MAP) appear to be a prerequisite for entrepreneur-ial orientation (EO) to positively influence profitability. In addition, critical capacities are a precondition to develop and maintain MAP. Studies revealed that small and me-dium enterprises use informal MAP and they generally lack managerial competences (MC) to develop and implement effective control systems to respond to environmental challenges. However, those who develop MC are more likely to implement MAP. The aim of the paper is to analyze the relationship between the use of MAP and the devel-opment of EO, where EO is measured through the independent dimensions of innova-tiveness, proactiveness and risk-taking. Further, the paper argues that the use of MAP is positively affected by the possession of MC. The paper adopts structural equation modelling to test the hypotheses, focusing on a sample of 339 Italian community pharmacies (response rate 54.6%). Findings support a positive relationship between MC and MAP and between MAP and EO, contributing to a field that is underexplored and providing suggestions for managers, practitioners and educators.

The role of management accounting on the relationship between corporate social responsibility and performance in SMEs

“…This research contributes to the current literature by shedding light on current CSR practices in SMEs and the role of MAPs in facilitating a direct link between CSR and enhanced performance. It responds to recent calls in the literature for research into the contribution of MAPs in the transformation of organisational practices that support environmental and societal agendas (Oppi et al , 2020; Yadav and Srivastava, 2023). Moreover, this research provides valuable understanding regarding the overall performance of SMEs by examining various financial and non-financial indicators; thus, helps to diminish the uncertainty surrounding the relationship between CSR and overall firm performance in the SME context.…”

“…Those who develop managerial competencies are more likely to implement sophisticated managerial tools such as MAPs. However, SMEs are frequently associated with low governance capacity, insufficient resources and a lack of managerial capabilities to establish effective control systems to respond to social challenges, hence facing more challenges (Oppi et al, 2020). As previously discussed, the literature suggests that CSR implementation may have a greater impact on performance when it is complemented by systems that provide an opportunity for CSR agendas to be integrated into enterprises' strategic goals.…”

Entrepreneurial Accounting as a Driver of SMEs’ Sustainability: A Systematic Review

“…Figure 8 presents how the articles reviewed relate to each theme. Figure 8 shows that 39% (31 out of 79) of the articles reviewed explored the impact of EA on entrepreneurship particularly the importance of financial literacy and accounting experience and practices on the performance and growth of business ventures (for example Purwidianti & Tubastuvi, 2019;Oppi et al, 2020;Kistyanto et al, 2020). The contribution of accounting skills and experiences are said to have a sustainable impact on the growth of an enterprise.…”