THE INFLUENCE OF BUSINESS STRATEGY AND OWNERSHIP ON MANAGEMENT ACCOUNTING INNOVATIONS AND RISK MANAGEMENT TECHNIQUES: AN EMPIRICAL ANALYSIS IN LARGE MANUFACTURING COMPANIES IN ITALY

Abstract

Purpose – This research aims to explore possible relations between firms characteristics, such as business strategy and ownership patterns as contextual contingent factors, and innovative Management Accounting (MA) and Risk Management (RM) techniques. Methodology/approach – The paper is based on a questionnaire survey. The survey was completed by Chief Financial Officer (CFO) and Chief Executive Officer (CEO) of Italian manufacturing large companies. The sample is selected from the data set (479 firms) obtained by Industrial, Commerce and Agriculture Confederation (CCIA). The data set captures all the Italian companies and it includes companies listed on the Milan Stock Exchange. Findings – The results of the statistical analysis show that our expectation of a significant relationship between prospectors business strategy and integrated Sophisticated Management Accounting (SMA) was not supported by the data. In addition, the results show that our expectation of a significant relationship between prospectors business strategy and Sophisticated Risk Management (SRM) was not supported by the data. In conclusion, the use of SRM techniques is not influenced by business strategy in large companies in Italy. Finally, the results show that our expectation of a significant relationship between listed firms and SRM was supported by the data. In particular, tests highlight that there is a significant relationship between listed firms and nonprobabilistic risk assessment techniques. Research limitations – In reflecting upon the results, we recognize that specific research limitations might reduce their generalization, especially the number of statistical observations. Originality/Value of paper – The paper contributes to the contingency theory research by considering innovative Management Accounting, rather than concentrating on traditional issues such as modern cost measurement, and by incorporating a number of Risk Management techniques (probabilistic and non-probabilistic) to understand corporate practices.

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