Management accounting tools for failure prevention and risk management in the context of Indian innovative start-ups: a contingency theory approach

Abstract

Purpose

This paper aims to analyse various failures that Indian innovative start-ups (ISs) are exposed to and proposes interventions from management accounting tools (MATs) that can tackle their failure-causing risks. This paper justifies the applicability of contingency theory (CT) for applying MATs for failure prevention and risk management.

Design/methodology/approach

This paper uses multimethod research while undertaking two sequential studies. The methods include a Survey via semi-structured interviews of 51 specialists and media reports and the Delphi method.

Findings

Reasons for the failures of Indian ISs have been identified and grouped based on eight broad underlying risk factors. Appropriate MATs relevant to ISs have been identified and examined by relating them with the risk factors underlying failure. Applicability of CT is shown while using the MATs for failure prevention and risk management of ISs.

Research limitations/implications

This study is limited to the Indian context. Empirical validation of the applicability of MATs for each type of failure along the lifecycle stages of ISs needs to be undertaken.

Practical implications

Founders/owners of ISs can use this conceptual framework to tackle the risks underlying the failure of their firms. Policymakers can introduce appropriate policies to enhance the survival of ISs. Researchers can further explore the application of CT for failure prevention and risk management of ISs.

Originality/value

A conceptual framework has been developed relating failure-causing risk factors relevant to ISs and appropriate MATs, which justifies the applicability of CT.

Citation

Krishnan (Retd.), C.S.N., Ganesh, L.S. and Rajendran, C. (2022), "Management accounting tools for failure prevention and risk management in the context of Indian innovative start-ups: a contingency theory approach", Journal of Indian Business Research, Vol. 14 No. 1, pp. 23-48. https://doi.org/10.1108/JIBR-02-2021-0060