The Role of Management Accounting Systems In Advanced Manufacturing Environment

The escalating complexity and competitiveness in the market place require firms to constantly review and modify their strategy and the way they operate in order to survive and sustain their market positions. For manufacturing firms, adoption of more advanced manufacturing techniques is necessary for these firms to remain competitive and achieve the desired performance. In this advanced environment, timely access to relevant information including management accounting systems (MAS) is critical for effective decision making. The information provided by traditional MAS is claimed to be obsolete and unable to help firms to compete in the condition of intense competition and thus should be modified to suit the changing information needs of managers in advanced manufacturing environment. In this environment, managers would require broader sets of information to make effective and faster decisions. This study examines the role of MAS information in the relationship between Advanced Manufacturing Technology (AMT) and performance, specifically whether MAS mediates the relationship. Data were gathered from a mail questionnaire survey and semi-structured interviews with manufacturing firms listed in the Federation of Malaysian Manufacturers (FMM) Directory 2009. The results of both survey and interviews reveal that the relationship between AMT and performance is indirect through MAS. This provides evidence that the use of MAS information in advanced manufacturing environment facilitates firms in improving organisational performance.