Competitor-focused accounting: an exploratory note

The results of a survey appraising the frequency and perceived helpfulness of competitor-focused accounting (CFA) practices are reported. Given the limited attention a€orded the subject in the management accounting literature, CFA usage has been found to be higher than what might have been reasonably anticipated. Three factors have been found to play statistically signi®cant contingent roles in connection with CFA usage and perceived helpfulness: company size, competitive strategy and strategic mission. Little evidence of any systematic relationship between industry type and CFA has been found. # 1999 Elsevier Science Ltd. All rights reserved. There appears to be a burgeoning interest in competitor analysis amongst strategy commentators and management practitioners. This interest is typi®ed by Porter's in ̄uential writings (Porter, 1980, 1985) which suggest that competitor analysis is fundamental to the pursuit of competitive advantage. He argues that the importance of this analysis warrants companies maintaining ``. . .an organized mechanismÐsome sort of competitor intelligence systemÐto insure that the process is ecient'' (Porter, 1980, p. 72). There is currently the beginning of a management accounting literature on competitor-focused accounting (CFA). Despite this development, no study concerned with appraising CFA adoption rates or related contingent factors has been found in the literature. The exploratory study reported herein was conducted in light of this apparent gap in prior research. The study's objectives are: (1) to appraise CFA adoption rates; (2) to assess practitioners' perceptions of the extent to which CFA could be helpful to their organization; and (3) to develop and test propositions concerned with contingent factors that might a€ect CFA adoption rates as well as perceptions of CFA's helpfulness. The paper is structured as follows. In the context of a review of what practices comprise CFA, the next section provides a synthesis of the most pertinent literature. This is followed by a section 0361-3682/99/$ see front matter # 1999 Elsevier Science Ltd. All rights reserved. PI I : S0361-3682(99 )00007-0 Accounting, Organizations and Society 24 (1999) 583±595 www.elsevier.com/locate/aos 1 Information Data Search (1985) reports that in 1985, more than a third of Fortune 500 companies were spending over $US 1 million a year on competitor analysis. Ghoshal and Westney (1991) report that the Society of Computer Intelligence professionals, a new US professional forum, held its ®rst annual meeting in 1986, and its 1988 meeting was attended by representatives from over 200 large corporations and over 40 con-