Organizational Contingencies and Management Accounting Techniques Selection in the GCC Countries

Purpose - This research project aims at providing more understanding of how indigenous organizational contingency factors effects the choice of a particular set of Management Accounting techniques by businesses in the Gulf Cooperative Council countries. The study covers a broad range of businesses from different business sectors in six different countries. An opportunity existed to determine if there are significant differences between company characteristics and the use of certain Management Accounting Techniques. This study proposes that the indigenous contingencies of companies have an effect on the set of Management Accounting Practices that a company adopts. Design/methodology/approach – An online survey on the adoption rate of forty-one Management Accounting Techniques was used to collect data. The Institute of Management Accountants invited the 453 CMA’s in the Gulf region to participate in the Survey of Management Accounting Practices in the GCC area. Factor analysis was employed to test the effects of company characteristics on the choice of Management Accounting Techniques. Findings –The study finds that contingency factors do influence the degree of use of Management Accounting practices and that that level of use is affected positively and significantly by the company’s ownership orientation and legal form and negatively and significantly by the factors related to size and sector. Overall, international ownership and incorporation tend to increase the use of many Management Accounting Techniques. Research limitations/implications - Results should be generalized cautiously due to the small number of responding companies. The use of each individual tool may not be completely explained by the chosen independent variables; other factors such as management preference and/or the cost and benefit of the technique may affect choice. Practical implications – This study would be useful to management accounting researchers in order to promote the use of the more advanced Management Accounting Techniques. Originality - One hundred and fifty three Certified Management Accountants from different industry sectors and across six different countries participated in this project