Exploring the relationship between management accounting and structural capital in a knowledge-intensive sector

ISSN： 1469-1930

Source： Journal of Intellectual Capital, Vol.10, Iss.1, 2009-01, pp. : 37-52

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Abstract

Purpose - In the context of intellectual capital (IC) research, it has been proposed that management accounting is most appropriately situated as an element of a firm's structural capital. This paper sets out to explore this contention within the confines of the indigenous Irish information and communications technology (ICT) sector. Design/methodology/approach - A survey instrument was used to collect the necessary data and responses from 88 firms were generated. A form of structural equation modelling (SEM) called partial least squares (PLS) was used to test the data. Findings - The findings suggest that management accounting systems within the indigenous Irish ICT sector have a positive influence on the generation of management accounting information. No statistical support was found, however, for the suggestion that management accounting systems positively influence firms' structural capital, whereas the results did indicate a positive relationship between management accounting information and structural capital. The findings strongly support previous research on the relationships between the human, structural and relational dimensions of IC and business performance. Research limitations/implications - The research was conducted solely within the confines of the Irish ICT sector. Further research is needed to explore the relevant relationships. Practical implications - It is argued strongly that firms adapt/develop management accounting systems to furnish themselves with the appropriate information required for the management and measurement of their increasingly valuable stock of IC. Originality/value - The paper explicitly explores the relationship between management accounting and structural capital.