Cover Page

Diverse and Global Perspectives on Value Creation Set

coordinated by
Nabyla Daidj

Volume 2

Value Creation in Management Accounting and Strategic Management

An Integrated Approach

Satoshi Sugahara

Nabyla Daidj

Sumitaka Ushio



This book is devoted to an analysis of linkages between management (or managerial) accounting and strategic management in order to obtain a better understanding of value creation and capture. Most existing studies and books have adopted a purely account-based approach or a strategic-oriented approach to address this issue. We have chosen to overcome this classical divide.

Several institutes and associations in the accounting and management consulting professions have highlighted these links. According to the Institute of Management Accountants (IMA):

“Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy”.

The American Institute of Certified Public Accountants (AICPA) states that management accounting as a practice extends to the following three areas:

This book looks at management accounting changes and at the emerging role of management accounting in strategy making. One of the main purposes of management accounting is to help an organization achieve its strategic objectives. The book appraises how closely related accounting and strategic management could create value for companies operating their activities in a dynamic and unforeseeable business environment.

What is management accounting and what strategic role does it play in an organization? Since the 1980s, many changes have occurred and companies have focused their strategy more and more on value creation. Consequently, new strategic directions have emerged, especially for managerial accounting. Management accounting and alignment with strategy can improve performance.

The topic is related to the evolution of the objectives of management accounting based on a strategic approach (external and internal diagnosis), in order to make successful long-term decisions, to ensure a sustainable competitive advantage and to create value. According to [HIL 05], management accounting is able to:

“‘add value’ to a business, through the following five major goals: providing information for decision making and planning, and proactively; participating as part of the management team in the decision-making and planning processes; assisting managers in directing and controlling operational activities; motivating managers and other employees toward the organization‘s goal; measuring the performance of activities, subunits, managers, and other employees within the organization; assessing the organization‘s competitive position, and working with other managers to ensure the organization‘s long-run competitiveness in its industry”.

This book is divided into three parts.

Part 1 discusses the various meanings of value (creation) according to several theoretical corpus including mainly economics and strategic management in Chapter 1 and opens the debate on linkages between management accounting and strategy in Chapter 2.

Part 2 describes the evolution of the conditions of value creation from different aspects. Chapter 3 explores how management accounting systems and their practices contribute to continuous value creation by encouraging organizational learning and presents a Japanese case study. Chapter 4 raises the question of how value will be created in a context of digital transformation that reshapes value chains, business models and more broadly business practices including accounting activities. The chapter identifies structural changes relating to the advent of digital technologies and several implications of digitization in the French economy.

Part 3 investigates the factors to determine the voluntary choice of accounting standard for small and medium entities (SMEs) in Japan in order to get a more comprehensive overview of value creation. Chapter 5 summarizes the SME Accounting Scheme in Japan, the theoretical foundations of the voluntary disclosure choice including a literature review. In Chapters 6 and 7, based on empirical tests, Japanese SMEs’ strategic behaviors are addressed by focusing on their choice of accounting standards. The choice of accounting standards is regarded as one of the strategic activities implemented by the firms.

This book is an attempt to adopt a cross-disciplinary approach and to explore two combined approaches (strategy and accounting) to improve our knowledge of value creation in various contexts. It draws upon a number of well-defined theoretical and empirical backgrounds and methodologies. This book encourages further thought and reflection on these issues and should be pursued in the future as firms should face new challenges with the acceleration of the digital transformation:

“A digital transformation strategy impacts a company more comprehensively than an IT strategy and addresses potential effects on interactions across company borders with clients, competitors and suppliers” [HES 16].

Part 1
The Evolution of the Concept of Value Creation in Accounting and Strategy (At a Theoretical Level)