Relationship between organizational life cycle and use of management accounting instruments

Abstract

The goal of this study is to investigate the relationship between the organizational life cycle and the use of traditional and modern instruments of Management Accounting. A survey was conducted in 37 industrial companies and techniques of descriptive statistics, discriminant analysis and correlations were applied to the data. The results show that most of the companies are in birth stage and have different years of constitution, not following the deterministic order recommended in the Life Cycle Theory. Among the traditional instruments, only costing methods didn’t show significant relationship with the stages of the life cycle. A negative relationship was found out between the stage of birth and the use of management accounting instruments, and positive relationship between the stages of growth, maturity and rejuvenation with the management accounting instruments. The use of modern instruments of management accounting is greater in the rejuvenation stage. Therefore, as the company advances in the stages of life cycle, the greater the use of management accounting instruments.