Does management accounting play role in planning process?

a r t i c l e i n f o This study examines the relationship between management accounting and planning profiles in Brazilian companies. The main goal is to understand the consequences of not including a fully structured management accounting scheme in the planning process. The authors conducted a field research among medium and large-sized companies, using a probabilistic sample from a population of 2281 companies. Using analytic hierarchy process (AHP) and statistical cluster analysis, the authors grouped the entities' strategic budget planning processes into five profiles, after which the authors applied statistical tests to assess the five clusters. The study concludes that poor or fully implemented strategic and budget-planning processes relate to the management accounting profiles of the Brazilian organizations studied. The business environment has become increasingly volatile and unpredictable in recent decades, and business management has become correspondingly more complex. In particular, increased competition has become a threat to the survival of businesses in more vulnerable sectors. In this environment, strategic planning with a view to achieving organizational efficacy is critical (Porter, 1985). However, the formulation of effective strategies will not ensure that an entity achieves organizational efficacy unless the entity has actually implemented those strategies (Jermias and Gani, 2004; Shank and Govindarajan, 1997). This implementation requires the interposition of a particular form of strategic planning between the formulation of policies and their implementation (Mintzberg et al., 1998); moreover, the strategy implementation requires instruments that facilitate and control the effective implementation of the formulated strategies. In order to manage the business and achieve organizational efficacy, the organization takes some elements into account, such as organizational structure, management style and the management control system that includes the management accounting system (Govindarajan, 1988). Particularly the management control system is an important mechanism, responsible for the design and implementation of strategies. In terms of range and reliability, the provision of managerial information that feeds the planning and control processes is critical. Such a management control system consists of two dimensions: (i) information selection; and (ii) information presentation. The first relates to the selection of appropriate management accounting The relationship between these two dimensions of the management control system determines the design of the management control system (Ferreira and Otley, 2006). The present study examines how the attributes of the information produced by the management accounting system affect the selection of management control techniques (Ferreira and Otley, 2006). The premise of …