73rd International Atlantic Economic Conference

March 28 - 31, 2012 | Istanbul, Turkey

Management accounting systems,TMT risk characteristics & their effect on strategic change

Saturday, 31 March 2012: 2:15 PM
Nikolaos Theriou, PhD, MBA, BSc Econ. , Business Administration, Kavala Institute of Technology-(TEI) of Kavala, Kavala, Greece
Vassilis Aggelidis, PhD, MSc, BSc Informatics , Business Administration, Kavala Institute of Technology-(TEI) of Kavala, Kavala, Greece
Management accounting systems, top management team’s risk characteristics and their effect on strategic change
Nikolaos Theriou and Vassilis Aggelidis
Kavala Institute of Technology
Department of Business Administration
Agios Loukas, 65404 Kavala, Greece.
Globalization intensifies world competition which leads to continuous market and industry changes, that force the majority of organizations to reconsider their strategic position and engage in strategic changes, mostly, through continuous innovation and new product development with smaller life cycles. These strategic actions have developed an environment with increased complexity, uncertainty and risk. On the other hand, organizations differ in their ability to realize strategic changes, depending on many factors that affect their strategic management process. Naranjo-Gil and Hartmann (2007) have already examined two such factors simultaneously, the composition of the top management team and the characteristics of the management accounting system.  The aim of this paper is to examine the effect of TMTs risk characteristics (risk propensity, risk perception and risk taking), on the extent of strategic change both, directly and indirectly, through the design and use of the management accounting system (MAS). The proposed research model is tested via a survey on 133 top management teams, from manufacturing enterprises with more than 250 employers throughout Greece. Our finding suggest that there is a significant indirect relationship between TMTs’ risk perception, risk propensity and risk taking and their strategic changes, affected by the intervening mediating role of the broad-scope and interactive use of MAS. The results of the study will help organisations to understand the significance of MAS use and the intervening effect on the relationship between TMTs risk characteristics and their strategic decision making process when considering new strategic changes.
JEL: M10, M41.
Key words: Risk perception, risk propensity, risk taking, management accounting systems, strategic change.