Reliance on management accounting under environmental uncertainty: The case of Palestine

Abstract

Purpose

This paper seeks to concern itself with the determination of the effect that external factors have on the design and implementation of management accounting systems in a developing economy which has in the last decade experienced fluctuating levels of environmental uncertainty.

Design/methodology/approach

This is explained through the use of a case study involving interviews and archival data in a company over a ten‐year period, a period involving considerable environmental change. It explores, how the organisation responded to the changes experienced over that time and the extent to which this impacted management accounting.

Findings

The study finds that the management accounting and control systems used are more mechanistic in times of environmental and political stability, but become more organic in periods of greater uncertainty.

Research limitations/implications

The challenge of relying for this research on respondents' recall of events occurring some years previously is acknowledged and steps taken to minimise this are identified. The results of any case study research are not widely generalisable beyond the context in which it is studied.

Practical implications

This study offers insights into management accounting and control systems as they are implemented in an underdeveloped country where uncertainty stems from political fluctuations.

Originality/value

This research sees environmental uncertainty stemming from changes in the political structure and this precipitates changes in markets and their structures. Companies operating in those markets are influenced by and need to react to such changes.

Citation

Kattan, F., Pike, R. and Tayles, M. (2007), "Reliance on management accounting under environmental uncertainty: The case of Palestine", Journal of Accounting & Organizational Change, Vol. 3 No. 3, pp. 227-249. https://doi.org/10.1108/18325910710820283