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Does strategic initiatives in management accounting lead to improvement in financial performance: An econometric analysis on the Jordanian shareholding companies
The Hashemite University, Zarqa, Jordan, Cyprus International University, Nicosia, Cyprus
This article aims at investigating the link between the practice of Activity Based Costing (ABC), Just-in-Time (JIT), and Total Quality Management (TQM) as strategic initiatives and the improvement in corporate financial performance of 56 industrial shareholding companies in Jordan. Ordinary Least Squares Regression analysis is used to test the association between the awareness level of the importance of using the initiatives and the level of adopting these initiatives. It is also used to identify the improvement in ROA as a mean of financial performance which associated with the initiatives. Analysis shows that 26.8% of the companies under consideration use at least one of the strategic initiatives. In addition, the awareness level of the importance of using the strategic initiatives is found to be significantly high among the financial managers, but such awareness is not reflected in the implementation of these initiatives. Furthermore, strong evidence emerges that the use of strategic initiatives leads to improvement in financial performance of the companies under consideration.
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article language: English
document type: Paper
published in SCIndeks: 02/06/2007