Relationship between contemporary management accounting practices and entrepreneurial strategies of large enterprises in Eldoret, Kenya
Keywords:
contemporary management accounting practices, entrepreneurial strategies, management accountingAbstract
Businesses in most economies contribute to the well being of the proprietors, community and economic development of the nation. In the face of significant number of studies focusing on contemporary management accounting practices (CMAPs) and entrepreneurial strategies, there still existed a gap. The thus study analyzed CMAPs and entrepreneurial strategies of large enterprises in Eldoret town. Basing on the accounting and decision usefulness theories, correlation survey targeted 570 enterprises. Data gathered using structured questionnaires from a sample size of 229 enterprises. From the findings, customer profitability analysis as a CMAP was widely used (mean = 3.64) while Pareto analysis was less popular (mean = 2.10). Furthermore, popular determinants of CMAPs used comprise entrepreneurial orientations, level of competition, financial performance, need for financial and non financial performance measures. It was evident that entrepreneurial strategies had a significant (p-values< .05) relationship with CMAPs such as benchmarking (β =.318), total quality management, TQM (β=.559), activity based costing, ABC (β=.357), balanced scorecard, BSC (β=.385), strategic cost management, SCM (β=.558) and customer profitability analysis, CPA (β=.520). Consequently, significant number of CMAPs positively affects pursuance of entrepreneurial strategies by the firm. The study thus concluded that a large enterprise may possibly attain the entrepreneurial strategies if CMAPs are taken into consideration.
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