Top Manager Orientation, Management Accounting Systems and Strategy Implementation: Evidence from the Sri Lankan Manufacturing Sector

Abstract

This paper examines how technically oriented top managers use Management Accounting Systems (MASs) for organizational strategy implementation in the Sri Lankan manufacturing sector. Based on the Upper Echelon Theory (UET), the researchers argue that technically oriented top managers use MASs more interactively than diagnostically and prefer the use of innovative to traditional MAS information. Further, the researchers argue that technically oriented top managers support the implementation of prospector strategy as a result of their innovativeness. In order to achieve the objectives of the study a quantitative based approach was adopted. The hypotheses were developed and tested in a survey among the technically oriented top managers in the manufacturing sector in Sri Lanka. The researchers conducted a few in-depth interviews as well. The findings of the study confirmed that the technically oriented top managers prefer the interactive style in the use of MASs and also prefer to use innovative MAS information. The results also confirmed that technically oriented top managers prefer to adopt the prospector strategy. Further, the findings confirmed that the interactive style of using MASs and innovative MAS information strongly supports the adoption of prospector strategy. The findings confirmed the applicability of UET in the Sri Lankan manufacturing sector. The findings will also aid business organizations in preparing MAS information to complement prospector strategy implementation. The paper contributes to the existing literature on UET and the role of MASs in supporting strategy implementation particularly in a South Asian, Sri Lankan setting.