The role of management accounting systems in the development of intellectual capital
| Published date | 10 April 2017 |
| Pages | 286-315 |
| DOI | https://doi.org/10.1108/JIC-08-2016-0079 |
| Date | 10 April 2017 |
| Author | Jorge Casas Novas,Maria do Céu Gaspar Alves,António Sousa |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
The role of management
accounting systems in the
development of intellectual capital
Jorge Casas Novas
Department of Management and CEFAGE-UE, University of Évora, Évora, Portugal
Maria do Céu Gaspar Alves
Department of Management and Economics and NECE-UBI,
University of Beira Interior, Covilhã, Portugal, and
António Sousa
Department of Management and CEFAGE-UE,
University of Évora, Évora, Portugal
Abstract
Purpose –The purpose of this paper is to examine the role of management accounting systems (MAS) in the
development of intellectual capital (IC) –i.e. human capital (HC), structural capital (SC) and relational capital
(RC) –and the resultant effects on organizational performance.
Design/methodology/approach –A questionnaire was developed to conduct a survey of high-level
managers of Portuguese companies. The data collected were analyzed through the use of structural equation
modeling with AMOS.
Findings –Statistical support was found for six out of nine hypothesized relationships. The findings confirm
the role of MAS in the development of HC and SC. Results also showed positive and statistically significant
relationships between the three dimensions of IC, in line with previous research. Finally, results indicated that
SC has a positive and significant link with organizational performance, in keeping with some research.
Research limitations/implications –The estimation procedure allowed only a partial validation of the
proposed model because, although positive, the relationships between MAS and RC, between HC and
performance and between RC and organizational performance were not statistically significant.
Practical implications –The study highlights the role of MAS as information networks that collect,
process and communicate information that influences the development of IC, as well as networks of
relationships that support the establishment of conditions for the creation and integration of organizational
knowledge and the development of IC.
Originality/value –In this research, an arguably more complete framework of the relations between MAS,
IC and performance is developed and empirically tested. Despite the existence of some literature addressing
the relationship between MAS and IC, this is the first study, of which authors are aware, that focuses
specifically on the relationships between MAS and the three dimensions of IC (HC, SC and RC), as well as their
effects on organizational performance.
Keywords Relational capital, Human capital, Structural capital, Intellectual capital,
Organizational performance, Management accounting systems
Paper type Research paper
1. Introduction
Since intellectual capital (IC) emerged as a leading topic in the field of organizational theory
during the last 20 years, the notion of organizational knowledge has become remarkably
extended. Attention has so far focused on the knowledge of individuals and on the
organization’s role in carrying out actions so that knowledge may grow and expand, as this
Journal of Intellectual Capital
Vol. 18 No. 2, 2017
pp. 286-315
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-08-2016-0079
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
The authors are pleased to acknowledge financial support from Fundação para a Ciência e a Tecnologia
and COMPETE (UID/ECO/04007-POCI-01-0145-FEDER-007659). The authors would like to thank the
contributions of reviewers and participants at the conferences in which the paper was presented.
Finally, the authors would also like to thank the reviewers and editor of the Journal of Intellectual
Capital for their valuable comments and suggestions to improve the quality of the paper.
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18,2
was seen as the leading way of creating and expanding organizational knowledge.
Without granting the importance of human capital (HC), the notion of organizational
knowledge has also developed to encompass structural capital (SC) and relational capital
(RC), as well as the relations and collective effects of elements that generally are seen as
comprising IC. Therefore, in broad terms, organizational knowledge is the set of resources
involved in the process of value creation (Beattie and Smith, 2013) that primarily holds
organizations’attention. Thus, there is a pathway of development from the perspective of
the individual –individual knowledge –to the perspective of the organization –collective
knowledge –specifically to the network of organizational resources, since it is through the
combination of organizational resources that organizations set and achieve their objectives.
In recent years, several attempts have been made to position management accounting in
the sphere of IC (see e.g. Cleary, 2009, 2015; Cleary et al., 2007; Guthrie et al.,2012;Roberts,
2003; Tayles et al., 2002, 2007; Toorchiet al., 2015; Wingren, 2004),which has enabled a gap in
empirical academic literature to be filled (Roslender and Fincham, 2001) and has provided
some clarification as to how management accounting contributes toward the identification,
measurement and management of IC. The main issue here is that if knowledge is a resource
then there is a link between management accounting and knowledge management, and this
involves examining whether and how itstechnology can contribute in thisfield. After several
years of developments, it is clear from the literature that the IC phenomenon has a strong
human focusand that the management accountingperspective on IC shouldnot disregard this
(Bjurström and Roberts, 2007; Cleary et al., 2007; Roberts, 2003; Roslender, 2000; Roslender
and Fincham, 200 1; Tayles et al., 2002). Consequently, calls for a humanresource perspective
on managementaccounting have been made in order to providemanagement with accounting
information on human resources. As Roberts (2003) observed, developments in management
control frameworks (e.g. balanced scorecard, levers of control, and so on) reveal an effort to
integrate different functional perspectives and place HC in a wider interpretative context.
However, it is also clear that the broad activity of knowledge management is not the sole
responsibility of a single discipline, but requires a confluence and closer dialogue between
several disciplines (Bhimani and Roberts, 2004; Johanson, 2005; Roberts, 2003; Tayles et al.,
2002), such as human resource management, information systems and strategy. At the same
time, it is clear from the literature that knowledge management involves the confluence of
financial and non-financial methods and measures (Bjurström and Roberts, 2007; Roberts,
2003; Tayles et al., 2007), which means that organizations need to ensure their management
accounting and control systems are developed to some degree in order to fully address the
issue. Finally, it is also clear that management accounting is an instrument of knowledge
management activities (Bhimani and Roberts, 2004; Edwards et al., 2005), and that much of
management accounting’s contribution to IC relies on its capacity to address the concerns of
knowledge management and the issues of information, flows of information and interaction
mechanisms it comprises. Thus, it is reasonable to consider the existence of
complementarities between management accounting and IC. In the present study, the
existence of such complementary features is considered, and the focus is on the contribution
of management accounting systems (MAS) to the development of IC. Based on empirical
evidence supporting the proposition that the value creation process is closely associated
with the level of organizational IC, this study also examines the effect of MAS on
performance through their positive direct effect on IC. From a conceptual point of view, a
preliminary review of the literature provides the key elements for potential relationships
between management accounting, IC and performance. Therefore, the expectation is to find
empirical evidence supporting the research hypotheses that predict the existence of direct
positive relationships between MAS, IC and performance.
In this context,this research has two main objectives.First, to develop and empiricallytest
an arguably more complete framework for the relations between MAS, IC and performance,
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Role of MAS
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