The Impact of Departmental Interdependence and Organization Structure on Management Accounting Practices (Evidence From Manufacturing Sector of Pakistan)
The purpose of this study is to determine impact of departmental interdependence and organization structure on the management accounting practices in the textiles and cements sectors companies which are listed in Karachi Stock Exchange (KSE-100 index) in Pakistan. In this study the independent variable is departmental interdependence which is measured by sequential dependence and reciprocal dependence and organization structure which are measured by sub variables such as (behavior formalization, department size, complexity, decentralization and unit grouping). To find the usage level of management accounting practices 38 management accounting practices are used and these are also divided into four stages according to its properties.
The regression model is used to test empirical data collected from a questionnaire which are filled by the head of accountant of textiles and cement sector companies. The response rate is 64%. The questionnaire is adopted by two different papers. The results indicate that sub variables of organization structure such as behavior formalization, department size, complexity and decentralization has significant impact on the selection of management accounting practices but the unit grouping and departmental interdependence was not supported by the data. So, these results provide some useful recommendations for the managers to consider these factors while designing an effective management accounting system. This study also establishes the basis for future research in this area.
Keywords- Departmental Interdependence, Behavior Formalization, Decentralization, Management Accounting Practices Etc.