The Performance Effects of Complementarities between Manufacturing Practices and Management Accounting Systems

We investigate whether manufacturing practices and management accounting systems interactively affect performance. Specifically, hypothesized disordinal interactions between TQM or JIT and performance goals, performance measures, or performance-contingent rewards are tested. Support is found for four of the six hypotheses. Our results provide evidence that performance gains from complementarities (synergies) result by combining TQM or JIT along with performance goals. We, however, found no evidence that performance is an interactive function of production systems and performance measures. Findings also indicate that higher performance can be achieved when TQM or JIT practices are used along with performance-contingent incentive plans. Finally, the results show that management accounting systems that have incentive pay and more extensive performance goals coupled with high levels of TQM or JIT result in the highest performance