Management Accounting Practices in Thailand

Management Accounting Practices in Thailand Nuatip Sumkaew, Lana Y J Liu, Josie McLaren This study provides empirical evidence on both traditional and contemporary management accounting practices (MAPs) in Thailand and explores reasons why these practices may have been or not been adopted. Using an online survey to 456 listed companies on the Thai Stock Exchange in 2012 and comparing results with four previous studies, initial findings are that the implementation and perceived satisfaction from traditional MAPs in Thailand have not significantly changed since the financial crisis in 1997. Thai managers still rely on information from traditional MAPs and avoid using contemporary practices, largely because of a lack of expertise. The results support previous studies, i.e. managers remain optimistic in the benefits of traditional MAPs though contemporary MAPs have marginally been adopted to reinforce the organisation s ability to survive in global competition. Field of Study: management accounting practices, financial crisis 1. Introduction A crisis may occur at anytime, any place and affect anyone. In the past two decades, financial crises have erupted in Asia, the United State and European countries. These economic uncertainties have significantly changed the ways in which businesses operate as well as environments in which they compete. With the changing global economic environment, companies in developing countries have to make necessary changes. For example, since the economic reform in Egypt in the 1990s, manufacturing firms have changed their objectives from production maximisation to profit maximisation (Farouk Abdel Al and McLellan, 2011). Production processes in Turkey have been affected by consumer preferences, it is evident that Turkish managers require management accounting practice (MAP) information to be part of their operating structures (Yalcin, 2012). This may lead to a greater need for management accounting information, to assist with planning, decision making, control and existence of organisations. In transitional economy countries like Thailand, contemporary MAPs like activity based costing (ABC) have been implemented in order to face a changed environment and to meet the need to survive in the economic crisis (Chongruksut and Brooks, 2005). They state that in order to survive, Thai firms must undertake organisational learning in areas of reengineering organisational processes, through reorganisation and adaptation of innovative management and accounting techniques (ibid.). For example, using actornetwork theory (ANT), Wongkaew (2006) illustrates the use of balance scorecard (BSC) in a local branch of the AgroBank in Thailand. Nimtrakoon and Tayles (2010) investigate some contingency factors (i.e. perceived environmental uncertainty Corresponding author Business School, Newcastle University Newcastle upon Tyne, U.K. E-mail address: n.sumkaew@newcastle.ac.uk 1

(PEU), competitive strategy, and firms size) have an influence on management accounting system designed in Thai organisations. Some recent studies indicate that contemporary MAPs have been adopted in different countries, in particularly when firms face greater environmental uncertainty. Drake and Haka (2008) studied sharing cost details between buyers and suppliers during their negotiations and found that relevant information come from ABC to support their decision-making. They attribute the use of ABC to environmental uncertainty to some extent. Hoque (2005) indicated that under high environmental uncertainty New Zealand managers relied more on non-financial performance measurement to improve their customer satisfaction. In Italian manufacturing firms, relationships between employees trainings and the use of non-financial measurements are significantly influenced by contemporary MAPs (Abdel-Maksoud et al., 2010). Sulaiman et al. (2004) suggested that contemporary MAPs would enhance companies ability to meet global competition but they found that the use of traditional MAPs in Singapore, Malaysia, China and India remain strong. Yalcin (2012) studied the adoption of MAPs in Turkey and compared with his results with five previous studies on economic reform; Greece during 2009-2010, Finland in 2005, India in 2001, and Australia and Japan in 1998. He found that the adoption rate of traditional practices is higher than that of contemporary practices. The two objectives of this paper are 1) to explore the MAPs in Thailand during the 2002-2012 periods and 2) to investigate reasons for any changes to MAPs during this period. The results are compared with the two previous studies on Thailand in 2002 and 2008 (Phadoongsitthi, 2003, Nimtrakoon, 2009), Greece during European crisis in 2010 (Angelakis et al., 2010) and Egypt in 2011 (Farouk Abdel Al and McLellan, 2011). This paper aims to extend prior research on 1) the current state of perceived benefits from MAPs in Thailand, which covers the recent global economic crisis; 2) cross-sectional comparison with aforementioned four previous country studies. This paper is organised as follows: an overview of literature is in the next section. Third section is research method. Section 4 presents the results and contributions to a better understanding of MAPs adoptions cross-countries, followed by conclusion and suggestions for future research in Section 5. 2. Literature Review Increasing needs of management accounting information have led scholars to turn their attention to studying MAPs adoptions across-firms and countries. This section provides some examples of MAPs studies in differenct country context with a special focus on the occurrence of economic and financial crisis. In Thailand, Chongruksut (2002) examined the relationship between ABC adoption and the Thai economic crisis during 1997 using questionnaires and structured interviews. The results demonstrated that Thai firms were reorganising or adopting MAP innovations such as ABC in order to survive and respond to the rapidly changing environment. Setthasakko (2010), using semi-structure interviews in three pulp and paper companies, revealed three main reasons for environmental management accounting (EMA) adoption barriers: 1) absence of building 2

organisational learning; 2) companies affixation on short-term rather than long-term perspective and, 3) a lack of guidance (know-how) on EMA. Five years after the financial crisis in Thailand Wailerdsak and Suehiro (2004) examined a Siam cement company which has bounced back into profitability and achieved first-class corporate governance. They found that managers used strategies and human resource management policies which relate to long-term perofrmance, such as well-planned recruitment, competitive promotion, performance appraisal and wide-ranging training and development programmes, including job rotation and sending managers to study abroad (ibid.). During the 1997 financial crisis in Australia, Chenhall and Langfield-Smith (1998) examined certain types of MAPs adoption in Australian manufacturing firms using postal questionnaires. The adoption rates of traditional MAPs and their perceived benefits were found to be higher than contemporary MAPs. Large Australian firms tended to adopt ABC, benchmarking and emphasise non-financial information and the importance of strategy. They stated that different national cultures and historical backgrounds may lead to the development of several MAPs within an organisation (ibid.). In a related study, Wijewardena and De Zoysa (1999) surveyed large manufacturing firms in Australia and Japan during 1997. They found that Japanese companies placed emphasis on managing and avoiding costs during product planning and development cycle so they adopted cost-volume-profit analysis and target costing at the product planning and design stage. Australian companies placed reliance on traditional MAPs such as budgeting, standard costing and variance analysis at the manufacturing stage. They attributed the differences to the unique culture, business environments and management accountants characteristics in the two countries. In India, Anderson and Lanen (1999) explored the evolution of MAPs in 14 firms using a contingency theory framework with the use of questionnaires and interviews of top managers during Indian economic reform in 1991. They found that economic reform led to more decentralised organisational structures. As a result managers were considering more on customer expectations and satisfactions and starting disaggregate cost data in components and departments (ibid.). Joshi (2001) conducted a questionnaire study to examine the extent to which MAPs have been adopted in large and medium sized Indian manufacturing companies. The results revealed that firm s size, conservative attitude of Indian management, autocratic leadership, and long term orientation resulted in more emphasis on future objectives and higher adoption rates on traditional MAPs than that on contemporary practices. Anand et al. (2004) surveyed chief finance officers (CFOs) to investigate the differences in the level of adoption of contemporary cost management techniques and practices across sectors and stages in Indian firms. They found that maximising earnings before interest and tax (EBIT) was a significant budget goal. However they found that those Indian firms using contemporary MAPs (e.g benchmarking and budgeting with ABC cost systems which are not associated with standard costing systems) failed to meet budget goals consistently. On the other hand firms that were using traditional MAPs met the budget goal (ibid.). In China, Wu et al. (2007) examined the adoption, perceived benefits, and future emphasis of western MAPs in Chinese companies, both joint ventures (JVs) and state owned enterprises (SOEs) using a questionnaire survey. Due to ownership type 3

and heavy influences by the old planned economic system, they found that senior financial officers of SOEs perceived more benefits from MAPs such as budgeting for controlling costs, profit and sale budgeting, and target costing but fewer benefits from other traditional MAPs and accounting for decision making than JVs did. In Pakistan, Maqbool-ur-Rehman (2011) investigated the influence of the use of MAPs on firm profitability using a survey. Product price, quality, differentiation, regulation changes, technology and after-sales service were measurements of conditions of competition. He found that under tough competition traditional MAPs were more frequently used in Pakistani manufacturing firms than contemporary ones. For instance, Pakistani companies preferred capital budgeting techniques particularly payback period and return on sales (ROS) to decision making and to evaluate divisional performance. In Turkey, Yalcin (2012) used questionnaires to investigate the use of MAPs in manufacturing firms, as well as compare the adoption rates of these practices with findings in previous studies in Greece, Finland, India, Japan and Australia. He found that traditional MAPs, particularly traditional budgeting and costing practices, had higher adoption rates than contemporary practices like ABC, life cycle costing and target costing had. The adoption rates of both practices in Turkey were higher than those obtained from the previous studies. In Egypt, Farouk Abdel Al and McLellan (2011) investigated the current status of MAPs and the ranking by managers of the benefits obtained from the practices using surveys and interviews of senior financial managers in manufacturing companies. Their results indicated that Egyptian manufacturing organisations retained and believed in traditional MAPs which were thought to be suitable in an unstable economy. However, the benefits of advanced MAPs have been increasingly recognised by the managers. In Finland, Hyvönen (2005) provided empirical evidence from manufacturing companies based on the adoption of MAPs and current and future perceived benefits from the adoption. Findings demonstrated that both traditional and contemporary MAPs were important to Finish managers. The MAPs adopted in Finland included product profitability analysis, budgeting for controlling cost, performance evaluation based on customer satisfaction surveys, and employee attitude. In the U.K., Abdel-Kader and Luther (2008) examined the impact of external characteristics, organisational characteristics, and manufacturing or processing characteristics on MAPs in the UK s food and drink industry sector using contingency theory and a questionnaire survey. They concluded that environmental uncertainty, customer power, decentralisation, size, advanced manufacturing technology (AMT), total quality management (TQM) and just-in-time (JIT) would explain the differences in management accounting (MA) sophistication whereas the relationships between competitive strategy, processing system complexity and product perishability, and MA sophistication have not been found. In Greek, Angelakis et al. (2010) investigated MAPs development in large-size manufacturing firms. The results from their study were similar to the study conducted by Hyvönen (2005) in Finland. The contemporary MAPs were found to have higher 4

implementation rates but lower perceived benefits than traditional ones. The emphasis on the future of contemporary MA techniques is greater than traditional ones, particularly on performance evaluation techniques. In Sweden and Denmark, Holm (2012) used cross-sectional survey data from customer profitability analysis (CPA) adopters to investigate the environmental factors influencing the level of CPA sophistication for decision making purposes. He found that customer service complexity and intensity of competition seem to play a subtle role when they come to the sophistication of designing CPA model. Back to Thailand, the continued use of traditional MAPs is likely to be mainly based on several factors such as business environment, national culture and religion. In general, Theravada Buddhist is the religion for the majority of Thai people and it is integral part in Thai culture. Hipsher (2009; p.73) explained that the accounting system in Thailand evolved from an indigenous system based on principles found in Buddhist cosmological texts in the mid-nineteenth century into the modern international system in use today. The emphases on tolerance and individual initiative are a result of the religion (Runglertkrengkrai and Engkaninan, 1987). Religious belief and family backgrounds can create a diversified impact on Thai business contexts. Based on the study of Hofstede (2001) Thai people have qualities of uncertainty avoidance that refers to the precise formal rules and high power distance implying that people accept a hierarchical order. Thai managers prefer formal written communication (Vance et al., 1992). They found that Thai managers moved towards a more individualistic attitude but focus on team-orientation instead of individual perspective because of primary religion and lessening of family bonds. These may lead to a high potential involvement as a working group. Although the potentials of contemporary MAPs may enhance the ability of the firms to operate through the financial crisis (Sulaiman et al., 2004), it is yet known whether or not such benefits and potentials can be realised in Thailand. 3. Research Design Case study approach has been used to elucidate organisational stories in MAPs context (Lillis and Mundy, 2005). Whilst it may not be statistically generalisable, survey study may be the best way to gauge a general picture of current state of MAPs adoption in the organisations. The questionnaire was based on Phadoongsitthi (2003), Nimtrakoon and Tayles (2010), Angelakis et al. (2010) and Farouk Abdel Al and McLellan (2011). The respondents were shown 58 MAPs on the questionnaires and were asked to indicate reasons why their companies have adopted or not adopted the MAPs from the list provided. They were also asked to indicate the degree of perceived benefits of the practices using a five-item scale. Forward and backward translation was used to make the participants more comfortable. The questionnaire was translated from English to Thai language by the researcher and was translated back to English language by a Thai academic, who has English teaching experience. Pilot tests were conducted both of the two languages by three accounting managers who have working experience in the USA 5

and Australia, and two academic staffs to refine the questionnaires. The feedback received was used to amend the questionnaire. To examine for response and non-response bias analysis, the first and last twenty responses were tested using independent-samples t-test. The results indicate that there were no statistically significant differences in the mean scores of MAPs between chosen responses. Thus, no non-response bias was supported by the data. The data are drawn from listed companies on the Stock Exchange of Thailand (SET) as of March 2012. There are 509 companies including 22 companies under rehabilitation and 27 companies facing possible delisting according to failure to submit financial statements within the specified deadlines. This led to only 460 companies to be targeted respondents. To get permission and verify email addresses of appropriated persons, an accounting manager in each company was called and sent a questionnaire as an attachment. Whilst 110 companies declined to take part in the research, 350 companies were included in the sample. The second call reminder was made to verify a valid email address if email address could not be sent. After sending four follow-up emails and one follow-up phone call, 117 questionnaires were returned, comprised of 33% response rates, within which 109 were valid questionnaires. 4. Findings The results of this study show reasons for MAP adoption and the perceived benefits derived from those practices in Thailand in 2012. These results are then compared with four previous studies; Thailand in 2002 and 2008, Greece in 2010 and Egypt in 2011. 4.1 Demographic Data Demographic data in shown in Table 1. There are eight types of businesses. The majority of returned questionnaires come from industrial manufacturing companies. The remaining companies are agriculture and food industry, property and construction, services, technology, consumer products, financials and resources. Most of companies have employees over 2,500. Moreover, if the size of the organizations is measured by total assets and net sales, 30% of the respondents have 20 100 million pounds on both of those measurements. Most of respondents held positions as accounting mangers, chief financial officers and assistant accounting mangers. Other respondents included were accounting supervisors, assistant accounting supervisors, accountants, assistant directors, operation managers, senior costing, corporate accountings, management accountants, budgeting managers, and internal audit section mangers. 6

Table 1 Demographic data No. % Industry types: Agro and Food Industry 18 16.5 Consumer Products 9 8.3 Financials 12 11.0 Industrials 25 22.9 Property and Construction 15 13.8 Resources 5 4.6 Services 15 13.8 Technology 10 9.2 Organisational size: (number of employees in 2011) Under 250 27 24.8 251-750 26 23.9 751 1,250 14 12.8 1,251 2,500 13 11.9 Over 2,500 29 26.6 Organisational size: (total assets in 2011 (million pounds))* Less than 20 20 18.3 20 100 39 35.8 101 300 21 19.3 301 500 6 5.5 Over 500 23 21.1 Organisational size: (net sales in 2011 (million pounds))* Less than 20 22 20.2 20 100 35 32.1 101 200 20 18.3 201 1,000 18 16.5 Over 1,000 14 12.8 Respondent s position Chief Financial Officer (CFO) 16 14.7 Accounting Manager 44 40.4 Assistant Accounting Manager 15 13.8 Accounting Supervisor 11 10.1 Assistant Accounting Supervisor 8 7.3 Accountant 7 6.4 Others 8 7.3 *1 GBP = 50 THB 4.2 Perceived Benefits of MAPs Table 2 demonstrates the perceived benefit from MAPs in Thailand during 2002 2012. Degrees of perceived benefits from both traditional and contemporary practices are ranked by the mean of the respondents who indicate their perceived benefits of the practices. Then it is divided into three groups; high benefits, moderate benefits and low benefits to help analysis and discussion. The benefits received from traditional and contemporary MAPs have been used referring to prior studies; 7

Thailand (Nimtrakoon and Tayles, 2010, Phadoongsitthi, 2003, Nimtrakoon, 2009) Greece and Finland (Angelakis et al., 2010). The results indicate that more than 60% of respondents have perceived traditional MAPs to be highly beneficial. Amongst traditional MAPs, product profitability analysis is perceived to be the most beneficial. About 50% of moderate benefits are on traditional MAPs, including budgeting systems for coordinating activities across the business unit, cost-volume-profit analysis (CVP) and capital budgeting techniques internal rate of return (IRR). Twenty two out of fifty eight practices are identified as low benefits by the respondents. These practices include benchmarking carried out within the wider organisation, with outside organisations; variable costing; Economic Value Added (EVA); Share Value Added (SVA); cost of quality; value chain analysis; product life cycle analysis; target costing; zero-based budgeting; budgeting systems evaluating managers performance, budget linking financial position, resources and activities; operations research techniques; strategic plans developed separately from budgets; throughput accounting; performance evaluation based on production processes, qualitative measures, non financial measures, employee attitudes, ongoing supplier evaluations, residual income; Just-in-Time (JIT). 4.3 Time Series Comparison It seems that MAPs in Thailand have not significantly changed since 2002. Both traditional and contemporary MAPs are almost ranked in the same level as those findings in Phadoongsitthi (2003) study. However, the perceived benefits from some practices have changed. Our results indicate that the respondents tend to use more traditional MAPs than advanced MAPs. Standard costing; performance evaluation based on controllable profit, divisional profit; long range forecasting; budgeting systems for compensating managers; balance scorecard (BSC) and product profitability analysis have been increasingly emphasised. In contrast, the emphasis on traditional MAPs; budgeting systems for coordinating activities across the business unit, planning day-to-day operations; variable costing and recently developed MAPs; kaizen costing, target costing have been dropped by the respondents. 4.4 Cross-sectional Comparison The perceived benefits from MAPs are different among Thailand, Greece and Egypt. At the level of highly perceived benefits, traditional MAPs have been relatively high perceived benefits among all three countries. Hyvönen (2005) supports that long range forecasting, customer satisfaction surveys and divisional profit are highly adopted in Finland. Angelakis et al. (2010) and Farouk Abdel Al and McLellan (2011) argue that either CVP, budgeting systems for compensating managers, performance evaluation based on controllable profit in Greece or performance measures based on - budget variance analysis, controllable profit, long range forecasting in Egypt are not commonly used. At the level of moderate perceived benefits, benefits of the traditional MAPs (namely budgeting systems for coordinating activities across the business unit, planning day-to-day operations, planning financial position; capital budgeting techniques IRR; formal strategic planning; Return on Investment (ROI); strategic plans developed with budgets) have been moderately perceived in Thailand but have been highly perceived in Greece and Egypt. Moreover, Thai respondents 8

have perceived contemporary MAPs such as benchmarking for operational process, strategic priorities as moderate benefits, but their benefits have been found low in Greece and Egypt. ABC, EVA, budgeting systems for day-to-day operations, strategic plans developed separately from budgets are lowly perceived in Greece as well as benchmarking - strategic priorities, product/service characteristics and management process, Activity-based budgeting (ABB) and performance evaluation based on cash flow return on investment (CFROI) in Egypt. Hyvönen (2005) argued that ABC has a relatively low adoption rate in Finland. At a low benefit level, budgeting for planning financial position which is widely used among companies in Greece, Egypt and Australian companies (Angelakis et al., 2010, Farouk Abdel Al and McLellan, 2011, Chenhall and Langfield-Smith, 1998) seems to obtain low benefits in the Thai context. These results are similar to budgeting systems for evaluating managers performance, performance measures - qualitative measures, production processes and employee attitudes in Greece and performance measures based on non-financial measures in Egypt (see Table 2). 9

Table 2: Benefits derived from MAPs adoptions No Management Accounting Practices N Mean Std. Deviation Rank (2012) Rank a (2008) Rank b (2002) Rank Greece c Rank Egypt d High Benefits: 1 C Product profitability analysis 36 3.83.70 1 2 7 1 5 2 T Standard costing 50 3.82.80 2 6 7 - - 3 T Absorption costing 55 3.80.85 3 15 11 6 9 4 T Budgeting systems - controlling costs 66 3.77.76 4 1-2 1 5 Performance evaluation based on - budget variance 47 T analysis 3.77.79 4 5 10 8 14 6 T Budgeting systems - planning cash flows 51 3.76.76 5 4 5 5 7 7 T Performance evaluation based on - controllable profit 30 3.73.69 6 24 24 14 19 8 C Total Quality Management (TQM) 33 3.73.72 6-3 - - 9 T Capital budgeting techniques - Net present value (NPV) 39 3.72.83 7 12 10 8 1 10 C Cost modelling 38 3.71.90 8 16 - - - 11 T Long range forecasting 30 3.67.71 9 25 24 7 15 12 T Budgeting systems - compensating managers 29 3.66.86 10 24 30 20 12 13 T Performance evaluation based on - divisional profit 33 3.64.82 11 23 21 9 8 14 T Capital budgeting techniques - Payback period 37 3.62.95 12 12 10 10 1 15 Performance evaluation based on - customer 34 C satisfaction surveys 3.62.70 12 7 4 9 3 16 Performance evaluation based on - balanced scorecard 42 C (BSC) 3.60.80 13 28 23 28 33 Moderate Benefits: 17 T Budgeting systems - coordinating activities across the business unit 37 3.59.93 14 30 17 5 2 10

18 C Performance evaluation based on - team performance 32 3.59.87 14 26 25 12 20 19 T Cost-volume-profit analysis (CVP) 32 3.59.91 14 3 1 25 10 20 Capital budgeting techniques - Internal rate of return 41 T (IRR) 3.59.92 14 12 10 8 1 21 T Formal strategic planning 35 3.57.88 15 9 15 3 6 22 Balance Scorecard (BSC) separately from performance 23 T evaluation 3.57.79 15 * - - - - 23 T Budgeting systems - planning day-to-day operations 25 3.56 1.04 16 38 6 18 1 24 C Customer profitability analysis (CPA) 27 3.56.93 16 11 - - - 25 Performance evaluation based on - return (profit) on 33 T investment 3.55.75 17 13 12 7 1 26 C Benchmarking - product/service characteristics 32 3.53.67 18 14 17 14 26 27 Performance evaluation based on - cash flow return on 34 T investment (CFROI) 3.50.86 19 17 18 12 24 28 C Benchmarking - strategic priorities 28 3.50.75 19 22 22 15 30 29 C Activity-based costing (ABC) 44 3.45.85 20 10 27 21 21 30 C Activity-based budgeting (ABB) 20 3.45 1.00 20 18 - - 31 31 C Benchmarking - management process 23 3.43.84 21 19 28 11 32 32 C Benchmarking - operational process 30 3.43.73 21 15 27 19 34 33 T Strategic plans developed with budgets 19 3.42.77 22 * - - 6 4 34 C Kaizen costing 20 3.40 1.05 23 33 2 - - 35 C Activity-based management (ABM) 20 3.40.88 23 20-19 28 36 T Budgeting systems - planning financial position 20 3.40.75 23 * - - 4 11 Low Benefits: 37 Benchmarking - carried out within the wider C organisation 13 3.38.87 24-19 13 29 38 T Variable costing 24 3.38.71 24 8 8 23 22 39 C Economic value added (EVA) 28 3.36.78 25 31-30 - 40 C Benchmarking - with outside organisations 15 3.33.90 26 * - - 16 35 11

41 T Budgeting systems - evaluating managers performance 24 3.33.87 26 * - - 7-42 Budgeting systems - Budget linking financial position, T resources and activities 17 3.29.92 27 * - - 15-43 C Cost of quality 14 3.29.83 27 27 - - - 44 C Value chain analysis 20 3.25.91 28 35 18 22 36 45 C Product life cycle analysis 13 3.23.83 29 33 26 24 13 46 C Target costing 14 3.21.89 30 21 9 27 33 47 C Zero-based budgeting 19 3.21.71 30 32 29 - - 48 Performance evaluation based on - production C processes 15 3.20 1.01 31 * - - 4-49 Performance evaluation based on - qualitative C measures 16 3.19.98 32 * - - 5 23 50 Performance evaluation based on - non-financial C measures 16 3.19.98 32 * - - 10 10 51 C Performance evaluation based on - employee attitudes 13 3.15 1.07 33 39 24 7 27 52 T Operations research techniques 13 3.15 1.07 33 37 27 26 25 53 T Strategic plans developed separately from budgets 13 3.15.80 33 * - - 17 10 54 C Throughput accounting 14 3.14.86 34 23 - - - 55 Performance evaluation based on - ongoing supplier C evaluations 14 3.14.86 34 34 16 8 16 56 Performance evaluation based on - residual income C (e.g. interest adjusted profit) 16 3.06.93 35 36 20 29 18 57 C Just-in-Time Costing (JIT)/Backflush costing 19 2.95.91 36 29 13 - - 58 C Shareholder value added (SVA) 12 2.92 1.00 37-14 30 17 T= Traditional MAPs, C= Contemporary MAPs * practices are not included in the previous studies in Thai context a Nimtrakoon (2009) collected data 2008 b Phadoongsitthi (2003) collected data 2002 c Angelakis et al. (2010) d Farouk Abdel Al and McLellan (2011) 12

The results reported in Table 3 present the reasons why the practices have or have not been used in the respondents organisations. The findings show that traditional and contemporary MAPs are dominant for most of the respondents who believed in reliable information for decision making. The second reason of using traditional MAPs is pressure from headquarters or managers whilst contemporary MAPs are used because of following market competitor. The need to save costs and time, organisational change, and pressure from the governments have affected the respondents decisions to use or not use certain MAPs respectively. In contrast, unreliable information and a lack of expertise have been found to be significant reasons for not using both traditional and contemporary MAPs in Thailand. The fact that techniques may have high implementation costs and they may be timeconsuming, leading to reporting delays are the others reasons for not using MAPs. Uncertainty avoidance or user resistance are not major factors determining whether companies adopt either traditional or contemporary MAPs. This study differs from Hofstede (2001) s finding, which suggested that Thais accept a hierarchical order and avoid uncertainty. Fadzil and Rababah (2012) support the view that top management support and increasing competition facilitate the implementation of contemporary MAPs (ABC adoption) in Jordanian manufacturing companies. However, they find that ABC adoption is motivated by relevant information in new environment and financial crisis. Reasons for using MAPs Table 3: Reasons for using or NOT using MAPs Traditional Contemporary MAPs * MAPs * Save cost 130 89 Save time 32 28 Reliable information for decision making/information need 358 271 Organisational change 40 42 Following market competitor 64 108 Pressure from government 14 8 Pressure from headquarters or managers 164 106 Reasons for NOT using MAPs High cost of implementing 93 156 Time consuming/delay reports 166 241 Not reliable/noneconomic information 238 301 Lack of expertise 213 333 Resistance to change by implementers/avoid uncertainty 9 7 surrounding Objection from top management 208 255 Never heard of it 12 38 * number of the respondents answer the questions 13

5. Conclusions and Suggestions for Further Research This paper aimed to examine the changes in MAPs in Thailand during the period 2002 2012, covering the recent global financial crisis. A time-series comparison was made to findings of one previous Thai study (Phadoongsitthi, 2003), together with a cross-sectional comparison to results from questionnaire studies of Greek and Egyptian companies (Angelakis et al., 2010, Farouk Abdel Al and McLellan, 2011). Results indicate that Thai companies rely more on traditional MAPs than on contemporary ones. Thai managers believe that information from traditional MAPs is likely to be more reliable. According to Hofstede (2001) Thai people have qualities of uncertainty avoidance that refers to the precise formal rules and high power distance. This implies that people accept a hierarchical order. This may explain that Thai managers remain using traditional MAPs. On the other hand, Greek and Egyptian seem to accept more on contemporary MAPs. Budgeting systems for compensating mangers and CVP have been found high benefits among countries except in Greece. Egyptian companies have heavily perceived benefits from budgeting systems for planning financial position and performance evaluation based on non-financial measures but the practices have not been commonly used in Thailand. Low benefits from budgeting systems - planning financial position, evaluating managers performance and performance evaluation based on - qualitative measures, production processes and employee attitudes are found in Thailand. However, high beneficial rates are reported in Greece. Nevertheless, contemporary MAPs (e.g. customer satisfaction surveys, TQM and product profitability analysis) tend to be more recognised by Thai managers than those indicated in previous studies. Moreover, ABC is found to have moderate benefits, which is differed from previous studies in Greece, Egypt and Turkey (Angelakis et al., 2010, Farouk Abdel Al and McLellan, 2011, Yalcin, 2012). The findings of this study suggest that global competition may not affect MAPs adoption. It seems that reliability and expertises are the main reasons of using different types of MAPs. Countries where financial crisis erupted like Thailand and Greece have inevitably believed in traditional MAPs more than contemporary ones. Sulaiman et al. (2004) argue that in global competition, firms competitive ability would be enhanced by using contemporary MAPs. This finding was not supported by the findings in this study. A further reason for not considering contemporary MAPs is a lack of awareness and understanding of these techniques. This may be due to the fact that managers have been trained using traditional MAPs and cases of successful implementation of contemporary MAPs remain at a theoretical level. Therefore reasons of using MAPs should be examined in future studies with use of different methodologies such as in-depth interviews. Moreover, it may have been useful to investigate the perceived benefits from MAPs in different national culture. 14

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