1 Competitive Strategy, Product Life Cycle and the Use of Broad Scope MAS Information: Evidence from Thailand Sirilak Bangchokdee * Lokman Mia, Lanita Winata Department of Accounting, Finance and Economics, Griffith University, Australia Sirilak Bangchokdee is a PhD student in the Department of Accounting, Finance and Economics, Griffith University, Australia. Ph: +61 (07) 55528719 Fax: +61 (07) 55528068, email: s. [email protected] edu. au. Lokman Mia and Lanita Winata are staff members within the department 2 Competitive Strategy, Product Life Cycle and the Use of Broad Scope MAS Information: Evidence from Thailand Abstract Due to today’s intensified competition, broad scope MAS (management accounting system) information becomes more important for managers in making an appropriate decision to respond to such competition. Empirical evidence on the use of broad scope MAS information under different competitive strategies and stages of product life cycle (PLC) has been limited.
This paper reports the results of a study which offers an explanation for relationships between (1) competitive strategy and the use of broad scope MAS information, and (2) stage of PLC and the use of broad scope MAS information. The respondents were 108 general managers in companies within foodprocessing and electronics industries in Thailand. The managers’ responses to a questionnaire survey were analysed by multiple regression. The results reveal that the more a company employs a differentiation strategy and has products at the early stages of PLC, the greater is its use of broad scope MAS information.
Key words: Competitive strategy; Product life cycle; Broad scope MAS information 3 Introduction Today’s business organisations face a highly competitive market (Drucker et al. , 1997) due to changes in manufacturing technology such as JIT and CAD/CAM; and changes in business environment such as removal of trade barrier and deregulation of economy (Mia and Clarke, 1999). Broad scope MAS information, which refers to internal and external, financial and non-financial as well as ex-post (historical) and ex-ante (futurerelated) information, becomes more important in such competitive environment.
This is because broad scope MAS information can help managers in environmental scanning (Chenhall and Morris, 1986), and this may then help them to properly respond to opportunities or threats in competitive environment (Mia and Clarke, 1999). Previous studies suggest that broad scope MAS information can assist managers in making more appropriate decisions, particularly in more competitive or uncertain environment (see Chenhall and Morris, 1986; Mia and Chenhall, 1994; Mia and Clarke, 1999).
Existing studies have investigated relationships between contextual variables, such as organisational structure and perceived environmental uncertainty (PEU), and broad scope MAS information (Chenhall and Morris, 1986; Gordon and Narayanan, 1984; Gul and Chia, 1994; Mia, 1993). However, there has been limited empirical research examining the effects of competitive strategy and stages of PLC on the use of broad scope MAS information. The current study thus investigated the relationships between (1) competitive strategy and the use of broad scope MAS information, and (2) stages of PLC and the use of broad scope MAS information.
Figure 1 presents the model of the study. Insert Figure 1 here 4 The rest of this paper is organised as follows. Section two provides a review literature and hypothesis development. Section three describes research method. Section four presents results of the study. The summary and conclusion are presented in Section five. 2. Theoretical background and hypothesis development 2. 1 Competitive Strategy Competitive strategy is concerned with how organisations compete within their industries and the way they position themselves in relation to their competitors (Langfield-Smith, 1997).
The extant literature contains multiple typologies of strategy developed by previous researchers such as Miles and Snow (1978) and Porter (1980) and Govindarajan and Gupta (1990). The current study focuses on Porter’s (1980) typology (cost leadership and differentiation) of competitive strategy and examines its relationship with the use of broad scope MAS information. Previous studies have investigated the relationship between competitive strategy and the use of broad scope MAS information.
However, these studies examine strategy based on Miles and Snow’s typology (e. g. , defender and prospector). strategic typologies focus on different strategic dimensions 1 . Different Miles and Snow’s typology explains strategy with respect to the rate of change in products or markets, while Porter’s typology focuses on how an organisation can sustain competitive 1 Segav (1989, p. 487) suggested that “while they presumably classify the same phenomena, the two typologies are different, each stressing somewhat different aspects of business-level strategy. Similarly, Govindarajan (1986) claimed that these two typologies are classified based on different criteria. White (1986, p. 220) concluded that the two typologies are not necessarily mutually exclusive because “business strategy is not unidimensional, and these are different aspects of a complex phenomenon. ” Hambrick (1983, p. 690) also pointed out that “The two typologies are not incompatible; rather, their juxtaposition indicates the complex webs of strategic options available to a business and the difficulty in trying to classify such options concisely. 5 advantage within an industry (Langfield-Smith, 1997). Because of different strategic dimensions, the results reported in the previous studies (Abernethy and Guthrie, 1994; Chong and Chong, 1997) focusing on Miles and Snow’s typology may not be generalized in the context of Porter’s typology (see Austin et al. , 1995; Szilagyi and Schweiger, 1984) 2 . 2. 2 Definition of Competitive Strategy Porter’s typology was conceptualized based on the notion of low costs versus differentiation (Helms et al. , 1997).
Organisations have a trade-off relationship between utilising cost leadership and achieving differentiation position (Govindarajan, 1988). Porter noted (1985, p. 18), “a firm will ultimately reach the point where further cost reduction requires sacrifice in differentiation. ” Therefore, this study focuses on competitive strategy based on a continuum presented in Figure 2 below. Organisations that employ more differentiation strategy are on the right of the continuum. These organisations provide products with unique attributes that meet customers’ need and/or represent superior value to customers.
These attributes include product quality, product image, product feature, delivery systems, market approaches, after sales services, brand image and product flexibility. On the other hand, organisations that employ less differentiation strategy are toward the left of the continuum (or they place more emphasis on a cost leadership). These organisations aim to be a low-cost producer in its industry. Sources of cost advantage include economies of scale, cost reduction from experience, proprietary technology, tight cost and overhead control, avoidance of 2
Previous studies varied in their results when different typologies were tested. For example, Austin, Trimm and Sobczak (1995) indicated some differences in information needs between defenders and cost leaders and between prospectors and differentiators. The quality factor information, for example, is needed for a defender, but not for a cost leader. A study by Szilagyi and Schweiger (1984) on a framework of matching managers to strategies showed no implication of analogy between Miles and Snow’s typology and Porter’s typology. 6 marginal customer accounts and minimization of costs in R&D, service and advertisements.
For the purpose of this study, focus strategy is excluded 3 . Insert Figure 2 here 2. 3 Competitive Strategy and the Use of Broad Scope MAS Information Companies employing different strategies may face uncertainty to different extents (Chandler, 1962; Govindarajan, 1988; Gupta and Govindarajan, 1984; Miles and Snow, 1978). Govindarajan (1988) argued that managers working in companies employing a differentiation strategy may face more uncertainty in task environment compared to their counterparts in companies following a cost leadership strategy, for the following reasons.
Firstly, companies with a cost leadership strategy focus on cost reduction and tend to keep their product range stable for a relatively long period (Govindarajan, 1988). However, companies employing a differentiation strategy focus on product innovation to create unique product attributes from the customers’ point of view (Govindarajan, 1988). The greater the companies emphasise developing new products, the higher the uncertainty they face (Biggadike, 1979 as cited in Govindarajan, 1988; Karagozoglu and Brown, 1988).
This is because companies with more emphasis on new product activities are “betting on products that have not yet crystallized”(Govindarajan, 1988, p. 832). 3 The focus strategy is excluded because it does not have a unique characteristic of how a company competes or gains competitive advantage in the industry. As cited in Lee and Miller (1996, p. 732), “ …differentiation and cost leader are mutually exclusive and [Porter] invokes a focus strategy that is really just a minor variant of cost leadership or differentiation. Similarly, Kumar and Subramanian (1997/1998) argued that organisations pursuing a focus strategy are similar to cost leaders and differentiators, although they compete in a narrow or a particular segment of broad market. A focus strategy (market segmentation) can be employed only when product differentiation or cost leadership already exists; however, a differentiation strategy can be pursued with or without a focus strategy (Dickson and Ginter, 1987; Ge, 2003). Secondly, companies employing a cost leadership strategy have relatively narrow product lines, so they can gain benefits from the economy of scale and reduce their inventory-carrying costs (Govindarajan, 1988; Govindarajan and Shank, 1992; Hambrick, 1983; Porter, 1985). In contrast, companies employing a differentiation strategy offer a relatively broad set of products to create the impression of uniqueness. “Product breadth creates high environmental complexity and consequently, higher uncertainty” (Govindarajan and Shank, 1992, p. 21).
This is because when companies have more products, they have to cope with changes in many markets. Such changes may not be predictable. Thirdly, companies employing a cost leadership strategy aim to produce commodity products 4 ; they succeed primarily by offering a lower price than other competitors (Govindarajan and Shank, 1992). Conversely, companies employing a differentiation strategy primarily gain competitive advantage if customers perceive that their product is different from that offered by competitors (Govindarajan and Shank, 1992).
The demand for differentiated products is more unpredictable than the demand for commodity products, which in turn may lead to higher uncertainty being faced by the companies employing a differentiation strategy (Govindarajan and Shank, 1992). The results of previous studies suggest that managers who work in situations of high environmental uncertainty perceive broad scope MAS information useful (Chenhall and Morris, 1986; Gordon and Narayanan, 1984). As the companies employing a differentiation strategy may face higher uncertainty, managers working in such 4
Commodity product or staple product can be defined as a product that is bought often and consumed routinely (Bennett, 1995). There are three main considerations among consumers including availability, convenience and price; little brand loyalty is involved (Yadin, 2002). “It is mass produced using only highly automated and capital-intensive processes in very large volumes, with an emphasis on maintaining low price points” (Foord, Bowlby, and Tillsley, 1992). 8 companies face task uncertainty higher than their counterparts in companies employing a cost leadership strategy.
It follows that the broad scope MAS information may be more useful/beneficial for managers working in companies using a differentiation strategy, therefore, they may use broad scope MAS information more than managers in companies employing a cost leadership strategy. Companies employing a differentiation strategy may place more emphasis on broad scope MAS information. The companies may require more external information including customer, supplier, competitor and industry (Mia and Clarke, 1999; Ward, 1993).
For example, when companies employing a differentiation strategy wish to gain competitive advantage, they have to distinguish themselves from competitors by providing differentiated product attributes. Thus, companies employing a differentiation strategy must understand their competitors (including their strengths and weaknesses) to ensure that they can be different from competitors by developing unique product attributes (Hansen and Mowen, 2000; Porter, 1980, 1985).
This type of companies may use external information, such as competitor’s price, cost and sales volume, to gain an understanding of strengths and weaknesses of their competitors. In addition, companies engaged in a differentiation strategy can differentiate by providing unique products in different forms including product quality, product benefits, brand image, product features, customer service, dealer network and technology (Narver and Slater, 1990; Porter, 1980, 1985). The companies need non-financial information to assess how effectively they can provide these unique products.
For example, if a company aims to differentiate its product by providing superior customer service, it may need non-financial information such as delivery time, quality post-sale service, and number of customer complaints to measure its performance. The above discussion 9 leads us to argue that managers, working in companies following a differentiation strategy, may place greater emphasis on broad scope MAS information that includes external, financial as well as non-financial data.
To gain competitive advantage, companies employing a cost leadership strategy have to sell their products at the industry competitive price, with a lower cost (Porter, 1980, 1985). Even though companies employing a cost leadership strategy need external information such as competitors’ prices, they may put more emphasis on internal information, which involves cost reduction. The sources of cost reduction include aggressive construction of efficient-scale facilities, vigorous pursuit of cost reduction from experience and tight cost and overhead control (Porter, 1985).
Thus, managers in the companies employing a cost leadership strategy may place greater emphasis on internal information, which provides feedback about such sources to examine its cost advantages. Many researchers have suggested companies employing a cost leadership strategy focus more on cost information (internal, financial and historical information) than companies employing a differentiation strategy (Dess and Davis, 1984; Miles and Snow, 1978). Consequently, companies employing a cost leadership strategy, which focus on internal and financial information may place less emphasis on broad scope MAS information.
From the above discussion, the following hypothesis is formulated: Hypothesis 1: The more a company employs a differentiation strategy, the greater is its use of broad scope MAS information. 10 2. 4 Production Life Cycle (PLC) The concept of product life cycle (PLC) has been widely accepted in marketing literature (see Lee et al. , 1993). However, only a few studies in management accounting literature focus on it. Merchant (1984) examined a relationship between PLC and budgeting system.
Hoque and James (2000) investigated the relationship between PLC and use of balanced scorecard (non-financial measures). An extensive review of the relevant literature suggests that the relationship between PLC and the use of broad scope MAS information has not been investigated. 2. 5 Definition of PLC PLC concept was explained based on the notion that products have life like a human, from birth to death (Birou, Fawcett, & Magnan, 1998). This concept describes the evolution of a product as measured by its sales over its lifetime (Cox, 1967; Kotler, 2003).
Throughout the life, a product passes sequentially through four stages: introduction, growth, maturity and decline (Grantham, 1997). Figure 3 presents the pattern of sales across four stages of the life cycle. Insert Figure 3 here Based on similarity in characteristics of sales and demand of products, the stages of PLC can be categorised into two groups: early stages and later stages. The early stages of PLC consist of introduction and growth stage; sales and demand of products at these stages continually increase.
On the other hand, the later stages of PLC consist of maturity and decline stages; sales and demand of products at these stages become stable and decrease gradually. This categorisation is consistent with Merchant (1984) and Hoque and James’ (2000) studies. 11 2. 6 Product Life Cycle and the Use of Broad Scope MAS Information PLC can be a predictive pattern for examining market environment (see Miller and Layton, 2000; Rink and Swan, 1979). Companies may thus use the PLC pattern to predict the future market environment and prepare to cope with such environment.
Companies with products at early stages may use more broad scope MAS information to prepare for coping with the foreseeable intense competition during later stages. Researchers have explained level of competition in each stage of PLC (see Gudergan and Perrott, 2004; Miller and Layton, 2000; Wilson, 1991): Insert Figure 4 here At the maturity stage, the competition is intense; sales growth is flat; and profit margin is low (Kotler et al. , 2003; Kotler et al. , 2001; Miller and Layton, 2000; Robinson and Pearce, 1986). Day (1990, p. 3) argued that Management can’t wait until this [intense market, flat sales growth, and low margin] has happened before taking action, for then they will surely be too late to capitalise on emerging market opportunities …Delay means attractive positions will already be staked out by competitors… Therefore, companies may begin the preparation for intense competition (at the later stages) beginning from the early stages of PLC. To successfully cope with high competition during the later stage of PLC, companies may need o conduct competitor analysis, analysis of implication of current strategies, projection of market condition and competitors’ strategies (see Anderson and Zeithaml, 1984; Quester et al. , 2001). This is because such analyses may help companies identify opportunity for future market, and this may in turn help them formulate more appropriate strategies to deal with the high competition. To conduct such analyses, companies may require broad scope MAS information. Mia and Clarke (1999) claim that the use broad scope MAS information may help companies to scan their environment, and identify any change in 2 industry and competitors’ strategies as well as monitor their performance of the current strategies. Therefore, companies with products at the early stages are likely to use more broad scope MAS information. Companies with products at the early stages may make greater use of broad scope MAS information than those with products at the later stages, as they may face more unpredictable situations. Shank and Govindarajan (1993) argue that companies with products at early stages face more unpredictable situations than those companies with products at later stages.
Companies with products at early stages may face more unpredictable situations because market demand at these stages is unpredictable (Eng and Wong, 2006; Kohli, 2001). The companies may also have less experience in new products’ market (Rink and Fox, 1999), and this may cause high risk of new product failure (Miller, 2001). On the other hand, situation at later stages is more predictable. Even though at maturity stage companies may face high competition, this situation is predictable, if a company can identify the stage of its product (see Kotler et al. 2003; Kotler et al. , 2001; Miller and Layton, 2000; Robinson and Pearce, 1986). At the later stages, companies may have more experience in the market; they may thus be able to deal with such competition. Kotler (2003) suggests that most marketing managers can cope with the problems relevant to the mature product. Previous studies suggest that companies may require more broad scope MAS information to help them cope with unpredictable situations (see Chenhall and Morris, 1986; Gordon and Narayanan, 1984). As a result, companies with roduct at the early stages that face more unpredictable situations may use more broad scope MAS information. Hypothesis two below summarises the above discussion. 13 Hypothesis 2: The more products a company has at early stages of PLC, the greater is its use of broad scope MAS information. 3. Research Method 3. 1 Sample Selection A list of the companies in the food-processing and electronics industries 5 was obtained from the database of Ministry of Commerce, Thailand. Only medium to large companies were included in the sample for the current study 6 .
Small companies were excluded from the sample to make the sample cohesive. Based on the Ministry of Commerce database, there are 1,047 companies in the electronics industry with only 232 companies being classified as manufacturing and categorised as medium to large companies. All 232 companies were selected in a sample for the study. There are 4,336 companies in the food-processing industry. Only 1,687 companies are medium to large manufacturing companies from which the sample of 232 companies was randomly drawn. Therefore, the sample for the study consisted of 464 companies.
A questionnaire package that included (1) a questionnaire coversheet, explaining the purposes of the study, and maintenance of anonymity and confidentiality of the respondents, (2) a tear off section (attached to the questionnaire) for respondents to provide their email address or postal address requesting the survey results, and (3) a reply-paid envelope, was sent to the general managers of each of the sample companies. 5 The database was not classified into industries; therefore, government officials searched names of companies by using keywords.
For the electronics industry, “electronics” and “computer” were used as keywords, while for the food-processing industry, “food” was used as a keyword. 6 According to criteria provided by Department of Industrial Promotion, Ministry of Industry Thailand, medium to large companies must have total fixed assets of at least 20 million baht and 50 employees (SMEsThailand, 2006). Since the number of employees was not provided by the database, this study used total fixed assets to determine the size of company. 4 A week after sending the questionnaire package, telephone calls were made to make sure that the general managers had received the package and to explain to them briefly about the objectives of the study. Additional questionnaire packages were sent to those who did not receive or misplaced the original questionnaire package. A total of 115 responses (24. 78%) were received. Of these, seven were unusable mainly because of missing data. Therefore, 108 responses were useable (a response rate of 23. 28%). The final sample includes 51 companies from the food industry and 57 companies from electronics. . 2 Measurement of Variables Pre-established instruments were used to measure variables in this study. Minor wording changes were made to suit the objective of the study. The questionnaire was translated into Thai language. A translator checked the translation of the questionnaire from English to Thai. A pilot study was conducted to assess whether respondents could correctly understand the questions, and answer them easily (Morgan, 1990). feedback was used to refine the questionnaire before using it for the study. The 3. 2. Competitive Strategy The instrument measuring competitive strategy was adapted from Govindarajan (1988); it comprises six items. The respondents were asked to identify the perceived position of their organisations’ products relative to those of leading competitors, for each of the six items on a five-point scale ranging from “1-significantly lower” to “5-significantly higher. ” The average score for this variable was calculated using the responses. A high value indicates a strong differentiation strategy, while a low value indicates a weak 15 differentiation strategy, i. , a strong cost leadership strategy. A reliability check for the instrument yielded a Cronbach alpha of 0. 779, indicating a satisfactory reliability level (Nunnally and Bernstein, 1994). A factor analysis of the data showed that the instrument is unidimensional as all six items loaded on a single factor extracted with an eigenvalue greater than one. 3. 2. 2 Product Life Cycle (PLC) The instrument for measuring PLC was adapted from Hoque and James’s (2000). The respondents were asked to indicate the percentage of their company’s products for each stage of the PLC.
The instrument required the respondents to make total of their score of all stages of PLC equal to 100 per cent. The percentages were grouped into one variable by summing the introduction and growth stages (early stages), and subtracting this figure from the sum of the percentages of both the maturity and declining stages (later stages) (Hoque and James, 2000). The subtracted figure was then divided by 40. Hence, the scores of this instrument range from minus (–) 2. 5 to plus (+) 2. 5. A company, having +2. 5 score, has all products in the early stages of PLC, while a company, having –2. 5 scores, has all products in the later stages. . 2. 3 The use of broad scope MAS information The instrument was adapted from Chenhall and Morris’s (1986), it comprises six items. The use of broad scope MAS information was assessed on a five-point Likert scale, ranging from 1 (not used at all) to 5 (used to a great extent). A check of reliability yielded a Cronbach alpha of 0. 669, indicating a satisfactory reliability level, albeit relatively low (Nunnally, 1967 as cited in Mia 2000). A factor analysis of the data revealed that the instrument is unidimensional as all six items loaded on a single factor extracted with eigenvalue greater than one. 16 4.
Results 4. 1 Descriptive Statistics Table 1 presents means, standard deviation, and actual minimum and maximum scores of the variables. Insert Table 1 here 4. 2 Test of Hypothesis The bivariate correlation for the variables are presented in Table 2. It can be observed from the table that the correlation between competitive strategy and the use of broad scope MAS information, and between PLC and the use of broad scope MAS information are positive and significant, providing a preliminary support for the hypotheses. Insert Table 2 here Hypotheses 1 and 2 were tested using the regression equation below: Y = ? + ? 1X1 + ? 2X2 + e (1) Where: Y = The use of broad scope MAS information X1 = Competitive strategy X2 = Product life cycle e = The error The results presented in Table 3 reveal that the association between the emphasis on competitive strategy (? 1 = 0. 200) and the use of broad scope MAS information is positive and significant at p < 0. 011, providing support for Hypothesis 1. In addition, the results suggest that the association between the PLC (? 2 = . 085) and the use of broad scope MAS information is positive and significant at p < 0. 14; therefore, Hypothesis 2 is also supported. The model explains 10. 20% of the variation in the use of broad scope MAS information. Insert Table 3 here 17 5. Conclusions The objective of the study is to examine the relationships between (1) competitive strategy and the use of broad scope MAS information, and (2) PLC and the use of broad scope MAS information. The results reveal a positive relationship between competitive strategy and the use of broad scope MAS information. This indicates that the companies employing a differentiation strategy tend to use more broad scope MAS information.
Nowadays market competition in Thailand has become more intense due to the increasing number of competitors. Removal of trade barrier allows foreign companies to sell their products in Thailand (BOI, 2007). The foreign companies are likely to possess more advanced technologies that can produce high quality and innovative products. To compete in such environment, companies are required to employ a differentiation strategy (the data shows more than 50 per cent of respondents place a greater emphasis on a differentiation strategy).
The companies employing a differentiation strategy may use broad scope MAS information to scan the market environment and changes in industry and in competitors’ strategies (Chenhall and Morris, 1986; Mia and Clarke, 1999), which in turn may help them identify the opportunity to differentiate their products from the competitors. As predicted, the results reveal that the companies having more products at the early stages may use more broad scope MAS information. An increasing competition in Thailand’s market may cause shorter life cycle of products (see Carrillo and Franza, 2006).
Plausibly, the short life cycle of products may force companies to rapidly introduce new product (56. 5 per cent of the respondents indicated more products at the early stages). This is because as a first entrant of the market, the companies may gain advantage from premium prices until competitors enter the market (Carrillo and Franza, 18 2006). The companies having more products in the early stages of PLC may use more broad scope MAS information because such information can help them obtain information relating to market reactions (e. . customer satisfaction and competitors’ new products) to their new products. Thus, they are able to appropriately respond to the reactions. There are at least two limitations to the study, which are worth noting. First, the sample was selected from only manufacturing companies in Thailand. Due to different industry’s and country’s environments may be different, the use of broad scope MAS information may be different from other industries and other countries. The generalisation of the results requires caution.
Testing model of the study in service industries such as banking and finance, and hotel industries may be beneficial. Second, the study concentrates on the use of broad scope MAS information under conditions of competitive strategy and PLC. As the adjusted R square of the study is relatively low (Adjusted R square = 0. 102), there may be other factors affecting the use of broad scope MAS information. The other situations may include information technology capability, level of competition, and market (domestic or international). References Abernethy, M.
A. and C. H. Guthrie, 1994, An empirical assessment of the “fit” between strategy and management information system design, Accounting and Finance 34, 49-66. Anderson, C. R. and C. P. Zeithaml, 1984, Stage of the product life cycle, business strategy, and business performance, Academy of Management Journal 27, 5-24. 19 Austin, C. J. , J. M. Trimm, and P. M. Sobczak, 1995, Information systems and strategic management, Health Care Management Review 20, 26. Bennett, P. D. , 1995, Dictionary of marketing terms, 2nd edn (NTC Business Books, Chicago).
Biggadike, R. , 1979, The risky business of diversification, Harvard Business Review 57, 103-11. BOI Homepage [Internet Document] (Board of Investment Thailand, Bangkok) [cited 14 January 2007], available from http://www. boi. go. th/ Carrillo, J. E. and R. M. Franza, 2006, Investing in product development and production capabilities: The crucial linkage between time-to-market and ramp-up time, European Journal of Operational Research 171, 536-556. Chandler, A. D. , 1962, Strategy and structure (MIT Press, Cambridge). Chenhall, R. H. and D.
Morris, 1986, The impact of structure, environment, and interdependence on the perceived usefulness of management accounting systems, The Accounting Review LXI, 16-35. Chong, V. K. and K. M. Chong, 1997, Strategic choices, environmental uncertainty and SBU performance: a note on the intervening role of management accounting systems, Accounting and Business Research 27, 268-276. Covin, J. G. , J. E. Prescott, and D. P. Slevin, 1990, The effects of technological sophistication on strategic profiles, structure and firm performance, The Journal of Management Studies 27, 485-511.
Day, G. S. , 1990, Market driven strategy. (The Free, Press New York). Dess, G. G. and P. S. Davis, 1984, Porter’s (1980) generic strategies as determinant of strategic group membership and organisational performance, Academy of Management Journal 27, 467-488. 20 Dickson, P. R. and James L. G. , 1987, Market Segmentation, Product Differentiation, and Marketing Strategy, Journal of Marketing 51, 1. Drucker, P. F. , E. Dyson, C. Handy, P. Saffo, and P. M. Senge, 1997, Looking ahead: implications of the present, Harvard Business Review 75, 1-6.
Eng, T. and V. Wong, 2006, Governance mechanisms and relationship productivity in vertical coordination for new product development, Technovation 26, 761. Foord, J. , S. Bowlby, and C. Tillsley, 1992, Changing relations in the retail-supply chain: geographical and employment implications, International Journal of Retail & Distribution Management 20, 23-30. Ge, G. L. , 2003, Market orientation, competitive strategy and firm performance: a structural equation analysis of firms in China (City university of Hong Kong). Gordon, L. A. and V. K.
Narayanan, 1984, Management accounting systems, perceived environmental uncertainty and organization structure: an empirical investigation, Accounting, Organizations and Society 9, 33-47. Govindarajan, V. , 1988, A contingency approach to strategy implementation at the business-unit level: integrating administrative mechanisms with strategy, Academy of Management Journal 31, 828-853. Govindarajan, V. , 1986, Decentralization, Strategy, and Effectiveness of Strategic Business Units in Multibusiness Organizations, The Academy of Management Review 11, 844.
Govindarajan, V. and J. K. Shank, 1992, Strategic cost management: tailoring controls to strategies, Journal of Cost Management, 14-24. Gudergan, S. P. and B. E. Perrott, 2004, Contemporary marketing management, 2nd edn (Pearson Education Australia, Frenchs Forest, N. S. W. ). 21 Gul, F. A. and Y. M. Chia, 1994, The effects of management accounting systems, perceived environmental uncertainty and decentralization on managerial performance: A test of three-way interaction, Accounting Organizations and Society 19, 413-426. Gupta, A. K. and V.
Govindarajan, 1984, Business Unit Strategy, Managerial Characteristics, and Business Unit Effectiveness at Strategy Implementation, Academy of Management Journal 27, 25. Hambrick, D. C. , 1983, High profit strategies in mature capital goods industries: a contingency approach, Academy of Management Journal 26, 687-707. Hansen, D. R. and M. M. Mowen, 2000, Cost management, 3 rd edn (South-Western College, Cincinnati). Helms, M. M. , C. Dibrell, and P. Wright, 1997, Competitive strategies and business performance: evidence from adhesives and sealants industry, Management Decision 35, 689. Hoque, Z. nd W. James, 2000, Linking balanced scorecard measures to size and market factors: impact on organizational performance, Journal of Management Accounting Research 12, 1-17. Karagozoglu, N. and W. B. Brown, 1988, Adaptive responses by conservative and entrepreneurial firms, Journal of Product Innovation Management 5, 269-281. Kohli, P. , 2001, Channel structure and firm performance: Theory and empirical evidence, (Rutgers The State University of New Jersey, Newark). Kotler, P. , S. Adam, L. Brown, and G. Armstrong, 2003, Principles of marketing, 2nd edn (Pearson Education Australia, French Forest, N.
S. W. ). Kotler, P. , L. Brown, S. Adam, and G. Armstrong, 2001, Marketing, 5th edn (Pearson Education Australia, French Forest, N. S. W. ). 22 Kotler, P. , 2003, Marketing management, 11th edn (Prentice Hall, Upper Saddle River, N. J. ). Kumar, K. and R. Subramanian, 1997/1998, Porter’s strategic types: Differences in internal processes and their impact on performance, Journal of Applied Business Research 14, 107. Langfield-Smith, K. , 1997, Management control systems and strategy: a critical review, Accounting, Organizations and Society 22, 207-32. Lee, J. and D.
Miller, 1996, Strategy, environment and performance in two technological contexts: Contingency theory in Korea, Organization Studies 17, 729. Lee, M. , I. Lee, and F. M. Ulgado, 1993, Marketing strategies for mature products in a rapidly developing country: a contingency approach, International Marketing Review 10, 56-72. Merchant, K. A. , 1984, Influences on departmental budgeting: an empirical examination of a contingency model, Accounting Organizations and Society 9, 291307. Mia, L. , 1993, The role of MAS information in organisations: an empirical study, British Accounting Review 25, 269-85.
Mia, L. and R. H. Chenhall, 1994, The usefulness of management accounting systems, functional differentiation and managerial effectiveness, Accounting, Organizations and Society 19, 1-13. Mia, L. and B. Clarke, 1999, Market competition, management accounting systems and business unit performance, Management Accounting Research 10, 137-158. Miles, R. E. and C. C. Snow, 1978, Organizational strategy, structure, and process, (McGraw-Hill, New York). 23 Miller, K. E. and R. A. Layton, 2000, Fundamentals of Marketing, 4th edn (McGrawHill Book Company Australia, Sydney). Miller, O. 2001, The product life cycle & the marketing mix, Credit Management, 36. Morgan, F. W. , 1990, Judicial Standards For Survey Research: An Update And Guide, Journal of Marketing 54, 59. Narver, J. C. and S. F. Slater, 1990, The effect of a market orientation on business profitability, Journal of Marketing 54, 20-35. Nunnally, J. C. , 1967, Psychometric Theory (McGraw-Hill New York). Nunnally, J. C. and I. H. Bernstein, 1994, Psychometric Theory, 3rd edn (McGraw-Hill, INC, New York). Porter, M. E. , 1980, Competitive strategy (The Free Press, New York). Porter, M. E. , 1985, Competitive Advantage (The Free Press, New York).
Quester, P. G. , R. L. McGuiggan, E. J. McCarthy, and W. D. Perrealt, 2001, Basic marketing: a managerial perspective, 3rd edn (McGraw-Hill, NSW). Rink, D. R. and H. W. Fox, 1999, Strategic procurement planning across the product’s sales cycle: A conceptualization, Journal of Marketing Theory and Practice 7, 28. Rink, D. R. and J. E. Swan, 1979, Product life cycle research: A literature review, Journal of Business Research, 219-242. Robinson, R. B. and J. A. Pearce, 1986, Product life-cycle considerations and the nature of strategic activities in entrepreneurial firms, Journal of Business Venturing 1, 207-224.
Segev, E. , 1989, A systematic comparative analysis and synthesis of two business-level strategic typologies, Strategic Management Journal 10, 487-505. Shank, J. K. and V. Govindarajan, 1993, Strategic cost accounting: the new tool for competitive advantage (The Free Press, New York). 24 Szilagyi, A. D and D. M. Schweiger, 1984, Matching managers to strategies: A review and suggested framework, The Academy of Management Review 9, 626. SMEs Thailand [Internet Document] (Small and Medium Enterprises, Bangkok), available from http://cms. sme. go. th Ward, K. 1993, Accounting for ‘a sustainable competitive advantage’, Management Accounting 71, 36. White, R. E. , 1986, Generic business strategy, organizational context and performance: an empirical investigation, Strategic Management Journal 7, 217-231. Wilson, R. M. S. , 1991, Strategic management accounting,” in D. Ashton, T. Hopper and R. W. Scapens, eds. , Issues in Management Accounting, Exeter). Yadin, D. , 2002, International dictionary of marketing (Kogan Page Limited, London). (Prentice Hall, Figure 1 The Model Competitive strategy The use of broad scope MAS information Product life cycle
Figure 2 A continuum of competitive strategy in this study Less emphasis on differentiation strategy (Low cost/ Cost leadership) Applied from Helm et al. (1997) More emphasis on differentiation strategy 25 Figure 3: Product Life Cycle Curve Introduction Growth Maturity Decline Figure 4 Level of Competition across PLC Introduction Growth Competition Little, if any Increasing Maturity Intense Decline Decreasing Table 1 Descriptive Statistics Variable Minimum (Actual) Maximum (Actual) 4. 67 2. 50 4. 83 Mean Stand Deviation Competitive strategy 1. 83 -2. 50 2. 50 3. 11 . 09 3. 70 .54 1. 23 . 45 Product life cycle
MAS information 26 Table 2: Bivariate Correlations Variable Competitive strategy Competitive strategy Product life cycle Product life cycle . 084 1. 00 MAS information . 257** . 250** 1. 00 1. 00 MAS information Table 3 Regression of the use of broad scope MAS information against Competitive strategy and PLC Variable Hypothesis Coefficients B T Value Sig. Level P< Competitive Strategy (X1) H1 H2 ?1 ? 2 .200 . 085 2. 585 2. 506 .011 . 014 PLC (X2) R square = . 119 Adjusted R square = . 102 F-Ratio = 7. 071 Significance F = . 001 N = 108 Dependent variable: The use of broad scope MAS information