Inability To Adapt To Environmental Changes Causes the Declining Performance of Indonesia's Textile Industry

Rima RACHMAWATI; Evi OCTAVIA

doi:10.38142/ijesss.v4i1.182

Authors

Rima RACHMAWATI Widyatama University, Indonesia
Evi OCTAVIA Widyatama University, Indonesia

DOI:

https://doi.org/10.38142/ijesss.v4i1.182

Keywords:

Environmental Uncertainty, Management Accounting Systems, Information Quality, Industry Textile

Abstract

The ability of managers in the face of environmental uncertainty is the main key to achieving competitive advantage. The decline in the performance of the Indonesian textile industry is due to the low quality of management accounting. This quantitative research aims to prove that the ability to deal with environmental uncertainties affects the quality of management accounting as well as its impact on the quality of information. The method used in this research is Explanatory verification research to find out what and how far the factors that affect the quality of management accounting information. This study involved textile companies registered with the Indonesian Textile Association, a total population of 85 companies with sampling methods using power analysis at a significance level of 5% with statistical power. Data analysis using Structural Equation Modeling-Partial Least Square includes measurement and structural models. The results of this study prove that the variability of management accounting information systems is built by the variability of environmental uncertainties. While the variability in the quality of management accounting information is formed by the variability of management accounting systems. Following up on the findings of this study, the ability to deal with environmental uncertainties is the main key to optimizing management accounting systems in generating management accounting information.

Downloads

Download data is not yet available.

References

A. Hammad, S., Jusoh, R., & Ghozali, I. (2013). Decentralization, perceived environmental uncertainty, managerial performance and management accounting system information in Egyptian hospitals. International Journal of Accounting and Information Management, 21(4), 314-330. https://doi.org/10.1108/IJAIM-02-2012-0005

Agbejule, A., & Burrowes, A. (2007). Perceived environmental uncertainty, supply chain purchasing strategy, and use of MAS information. Managerial Auditing Journal, 22(9), 913-927. https://doi.org/10.1108/02686900710829417

Ah Lay, T., & Jusoh, R. (2017). Organizational Capabilities, Strategic Management Accounting and Firm Performance. Jurnal Akuntansi Dan Keuangan Indonesia, 14(2), 222-246. https://doi.org/10.21002/jaki.2017.12

Chong, V. K., Chong, K. M., Chong, V. K., Chong, K. M., Huynh, Q. L., & Vinh, T. (2010). Management Accounting Systems, Perceived Environmental Uncertainty and Companies ' Performance in. International Journal of Academic Research, 2(1), 195-201.

Drobyazko, S., Shapovalova, A., Bielova, O., Nazarenko, O., & Yunatskyi, M. (2019). Evaluation of effectiveness of responsibility centers in the management accounting system. Academy of Accounting and Financial Studies Journal, 23(6), 1-6. Retrieved from https://www.scopus.com/inward/record.uri?eid=2-s2.0 85081907900&partnerID=40&md5=ffedcae11af8ef541726cdf8d835fea0

Efendi, D., & Kusuma, E. A. (2021). The Role of the Management Accounting System and Decision-Making Style on Managerial performance. Jurnal Keuangan Dan Perbankan, 25(1), 144-161. https://doi.org/10.26905/jkdp.v25i1.5330

Egorova, S., Bogdanovich, I., Kistaeva, N., & Iudanova, L. (2020). Management Accounting As a Tool For Organization Of Information On Innovations. Proceedings of the 2nd International Scientific Conference on Innovations in Digital Economy: SPBPU IDE-2020. https://doi.org/10.1145/3444465.3444467

Fitriati, A., & Mulyani, S. (2015). Factors That Affect Accounting Information System Sucess and its Implication on Accounting Information Quality (not useful). Asian Journal of Information Technology, 14(5), 154-161. https://doi.org/10.3923/ajit.2015.154.161

Gamayuni, R. R. (2019). The effect of management accounting information system application on information quality and its implication on good government governance. International Journal of Scientific and Technology Research, 8(8), 1247-1254.

Garasyim, P., Bondarenko, O., Klym, N., Karpenko, Y., & Bondarchuk, L. (2020). Strategic management accounting of business processes of the service sector enterprises. Academy of Accounting and Financial Studies Journal, 24(2). Retrieved from https://www.scopus.com/inward/record.uri?eid=2-s2.0-85088933686&partnerID=40&md5=93ea70fdc8567b59f5feac74fa4ee496

Gericke, A., Klesse, M., Winter, R., & Wortmann, F. (2010). Success Factors of Application Integration: An Exploratory Analysis. Communications of the Association for Information Systems, 27(May 2014). https://doi.org/10.17705/1CAIS.02737

Ghasemi, R., Habibi, H. R., Ghasemlo, M., & Karami, M. (2019). The effectiveness of management accounting systems: evidence from financial organizations in Iran. Journal of Accounting in Emerging Economies, 9(2), 182-207. https://doi.org/10.1108/JAEE-02-2017-0013

Giannetti, R., Cinquini, L., Miolo Vitali, P., & Mitchell, F. (2021). Management accounting change as a learning process: a longitudinal analysis. Qualitative Research in Accounting & Management, 18(4/5), 484-515. https://doi.org/10.1108/QRAM-01-2017-0003

Gordon, L. A., & Miller, D. (1976). A contingency framework for the design of accounting information systems. Accounting, Organizations and Society, 1(1), 59-69. https://doi.org/10.1016/0361-3682(76)90007-6

Griffin, R. W. (2016). Management. Boston: Cengage Learning.

Hair, J., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2021). Partial Least Squares Structural Equation Modeling (PLS-SEM). USA: SAGE Publications. https://doi.org/10.1007/978-3-030-80519-7

Hall, J. A. (2013). Introduction to Accounting Information Systems. South-Western: Cengage Learning.

Hardika, A., Putra, I. G. S., & Halimrachmat, R. A. (2019). Characteristics of management accounting systems, implementation of accounting information systems and managerial performance. International Journal of Advanced Science and Technology, 28(6), 1-7. Retrieved from https://www.scopus.com/inward/record.uri?eid=2-s2.0-85080117351&partnerID=40&md5=b8b53c77e6b7f0e259331f27098a7c46

Heidmann, M., Schäffer, U., & Strahringer, S. (2008). Exploring the role of management accounting systems in strategic sensemaking. Information Systems Management, 25(3), 244-257. https://doi.org/10.1080/10580530802151194

Kartiwa, J. (n.d.). Industri Tekstil RI saat Pandemi: Sudah Jatuh Tertima Tangga. Katadata.Co.Id. Retrieved from https://katadata.co.id/yurasyahrul/indepth/5ea7d4e5648ed/industri-tekstil-ri-saat-pandemi-sudah-jatuh-tertimpa-tangga

Maryanova, S., Petrovska, S., Lysenko, A., Kravchenko, M., & Metil, T. (2019). Organization of management accounting on the basis of the process approach automation. Academy of Accounting and Financial Studies Journal, 23(Special Issue 2). Retrieved from https://www.scopus.com/inward/record.uri?eid=2-s2.0-85071696968&partnerID=40&md5=dd490dcbdbe10b65c1130718024140b3

Matiukha, M., & Rovnyagin, A. (2020). Managerial Accounting As an Element of Information Resources Management of an Enterprise. EUREKA: Social and Humanities, 1(1), 3-9. https://doi.org/10.21303/2504-5571.2020.001045

Mia, L., & Winata, L. (2008). Manufacturing Strategy, Broad Scope MAS Information and Information and Communication Technology. The British Accounting Review, 40(2), 182-192. https://doi.org/https://doi.org/10.1016/j.bar.2008.02.003

Miller, K. D. (1993). Industry and Country Effects on Managers' Perceptions of Environmental Uncertainties. Journal of International Business Studies, 24(4), 693-714. Retrieved from https://doi.org/10.1057/palgrave.jibs.8490251

Moorhead, G., & Griffin, R. W. (2012). Organizational Behavior. South-Western: Cengage Learning.

Nelson, R. R., Todd, P. A., & Wixom, B. H. (2005). Antecedents of Information and System Quality: An Empirical Examination Within the Context of Data Warehousing. Journal of Management Information Systems, 21(4), 199-235. https://doi.org/10.1080/07421222.2005.11045823

Novianty, I. (2019). The Quality of Management Accounting Information Systems from Users Ethics, Environment Uncertainty and Top Management (an Empirical case of Local Government in Indonesia). South East Asia Journal of Contemporary Business, Economics and Law, 20(1), 1-10.

Pedroso, E., Gomes, C. F., & Yasin, M. M. (2020). Management accounting systems: an organizational competitive performance perspective. Benchmarking: An International Journal, 27(6), 1843-1874. https://doi.org/10.1108/BIJ-12-2019-0547

Prihastiwi, D. A., & Sholihin, M. (2018). Factors Affecting The Use of Management Accounting Practices in Small and Medium Enterprises: Evidence from Indonesia. Jurnal Dinamika Akuntansi, 10(2), 158-176. https://doi.org/10.15294/jda.v10i2.17307

Rachmawati, R. (2019). Relationship between accounting information systems implementation and corporate governance of rural banks in Indonesia. Diponegoro International Journal of Business, 2(1), 10-17. https://doi.org/10.14710/dijb.2.1.2019.10-17

Ritonga, K. (2010). Determining the Moderating Effect of Perceived Environmental Uncertainty Management Accounting Information Systems Relationship in Indonesia Manufacturing Companies. Indonesian Management & Accounting Research, 9(1), 27-43. https://doi.org/10.25105/imar.v9i1.1286

Schulz, A. K. D., Wu, A., & Chow, C. W. (2010). Environmental uncertainty, comprehensive performance measurement systems, performance-based compensation, and organizational performance. Asia-Pacific Journal of Accounting and Economics, 17(1), 17-39. https://doi.org/10.1080/16081625.2010.9720850

Strumickas, M., & Valanciene, L. (2010). Development of Modern Management accounting system. Engineering Economics, 21(4), 377-386. https://doi.org/10.5755/j01.ee.21.4.11710

Susanto, A., & Meiryani. (2019). How quality of management accounting information systems is influenced by environmental complexity? International Journal of Innovation, Creativity and Change, 5(2), 909-922.

Ugalde, F., & Naranjo-gil, D. (2020). Management Accounting Systems, Top Management Teams, and Sustainable Knowledge Acquisition: Effects on Performance. Sustainability (Switzerland), 1-14.