The Impact of Historical Performance and Managerial Risk-taking Propensity on the Behavior of Choosing Prospector Strategy and Using Strategic Management Accounting Information in Viet Nam Manufacturer

Abstract

Strategic management accounting (SMA) supports managers in decision-making and activity control to accomplish both short- and long-term objectives. This study, based on the Upper Echelons Theory (UET), investigates how the CFO’s psychological trait—the propensity to take managerial risks, affects the decision to choose prospector strategy and uses SMA information. The main objective of this study is to find out what factors influence the behavior using SMA information. This study also takes into account the internal locus of control “s moderating role effect in some relationships. The CFOs of Vietnamese major manufacturers are investigated. The results have shown that: (1) the lower of the historical performance, the more likely CFOs are to choose the prospector strategy, the more CFOs have managerial risk-taking propensity, the more SMA information usage behavior increases; (2) the more CFOs have managerial risk-taking propensity, the more likely they are to choose the prospector strategy, and the behavior of using SMA information also increases; (3) the CFOs” internal locus of control (ILOC) trait plays a moderator role in increasing their SMA information usage behavior and prospector strategy selection trend. This study adds to accounting expertise by highlighting the significance of SMA information for decision-making, the CFO’s management risk-taking propensity, and helping top managers develop an effective SMA system.