Adoption and Benefits of Strategic Management Accounting: A Cross-Sectional Survey of Banks in Nigeria


Strategic management accounting is a thriving concept in empirical studies. It has been defined and interpreted diversely by scholars based on individual perspicacity, scientific background, and underlying assumptions. It is well accepted that strategic management accounting describes a generic approach to accounting for strategic positioning; its practicability, however, has been controversial among scholars. Academics and practitioners have expressed doubts on strategic management accounting adoption and implementation as part of management accounting practices. Hitherto, there is no consensus of what strategic management accounting is, or should be, and whether its implementation is practicable. Therefore, there is a need for more empirical studies to provide evidence on strategic management accounting adoption and benefits in organizations. This case study provided insight into the challenges of conducting survey research in the field of management accounting in a developing country. Some of the challenges include variable measurements, data gathering from highly reticent individuals, and choice of data analytical technique. This case study outlined several concerns that should be considered when conducting survey research in a developing country where data gathering is a serious challenge.

Learning Outcomes

By the end of this case, students should be able to

  • Understand methodological issues related to conducting research in under-researched areas in the field of management accounting
  • Identify the challenges associated with survey research in general
  • Gain insight into ways of overcoming the challenges of conducting survey research
  • Appreciate the use of survey method in conducting research in under-researched areas in the field of management accounting, in a developing country

Project Overview and Context

The concept of strategic management accounting (SMA) was introduced into academic discourse by Kenneth Simmonds in 1981. As a seminal management accounting technique, SMA came to prominence among other innovative techniques designed to restore the fading relevance of traditional management accounting techniques (Drury, 2002). Kenneth Simmonds (1981) first used the term SMA to identify an externally oriented approach to the practice of management accounting, which posited a sophisticated and more involving order of management accounting practices, one that departs from the traditional management accounting practice to a dynamic and strategic positioning. Operationally, SMA entails the gathering of information of a company and its competitors on market shares, cash flows, and resource utilization.

According to Katja Tillmann (2003), SMA has a broad external focus, not only on competitors but also on the competitive environment. It significantly departs from the traditional practice of management accounting toward a strategic innovation outside the norms, combining management, accounting, and marketing within a strategic management framework (Roslender & Hart, 2003). Theoretically, SMA combines strategy, management, and accounting as a single concept, which is insightful and provides accounting information in support of the strategic management process (Roslender & Hart, 2010).

This case study describes the practical steps taken in conducting a survey research in management accounting in a developing country. It presents discussions on my personal experience in applying the survey method in researching on SMA adoption in the Nigerian banking industry. The original article, which was co-published with the project supervisor in Future Business Journal in 2017, investigated the practicality of SMA adoption by banks in Nigeria and the benefits SMA offers the industry. The study added to the sparse research on SMA in developing countries by providing empirical evidence on the practicality of SMA adoption and benefits in the Nigerian banks.

Choosing the Topic

Initially, the idea of conducting a research on SMA was mooted in 2013 by my project supervisor as part of my PhD course work. As a contemporary area in management accounting, I was asked to investigate the adoption and benefits of SMA in the Nigerian banking industry. At first, for about 2 years, I abandoned the idea because I was indecisive on the research direction and on the best methodology to adopt in my investigation. Also, I was yet to fully grasp SMA as a concept, and besides, very few studies were available on SMA adoption in developing countries. In my frustration, I thought of changing my research interest to something less demanding that would afford me easy access to data (secondary data).

However, in 2015, I resumed my research on SMA after abandoning it for 2 years. At this time, I was fully motivated to finish the project. I was ready to go through the anticipated challenges of collecting primary data through the administration of questionnaires to bank managers. I knew quite well that it was not going to be easy to access middle and senior level managers. I only trusted God to grant me favor and make them willing to participate in the survey. In all, three things motivated me not to give up on my research on SMA. The first motivation was that I later found SMA very interesting. The second motivation was that I wanted to do something unique and different from the mainstream management accounting research, and the third motivation was that I became very eager to explore whether SMA is practicable in the banking industry and the benefits it offers the industry in decision-making.

Generally, from my experience I discovered that five important things should be considered by accounting researchers when conducting research relating to emerging or under-researched areas in management accounting. The first is that the topic should be one that is novel and interesting to the researcher so as to sustain his or her enthusiasm when the process becomes frustrating. The second is the availability of prior empirical studies to provide better understanding on the area of investigation and to guide the process of building on existing literature. The third is the research method to adopt and availability of data. Many times, this aspect could really be challenging, especially when choosing the research design, method of data collection, and operationalizing and measuring the dependent and independent variables. The fourth is the time frame of the research, and the fifth is the financial implication in conducting the research. Actually, the financial implication is a major factor to be considered if the research must be completed within the specified time.

In Africa, and Nigeria particularly, conducting a survey research using business professionals and managers of companies as the respondents could be a difficult task. This group of individuals hardly afford researchers the time to attend to survey instruments. This is one major reason why most accounting researchers in Nigeria avoid survey research when it involves questionnaire distribution to business professionals and managers of companies. It is quite difficult to gain access to this group of respondents. Many times, accounting researchers have been discouraged and frustrated and had to change from their original research interest to something different.

Research Design

A research design is the scheme used by researchers for specific structure and strategy in making inquiry into phenomena and to obtain logical answers to research questions. It could be qualitative or quantitative depending on the study’s assumed theory and philosophy. Generally, there are fundamental considerations that determine the choice of a research design. These may depend on the nature of the research, whether exploratory, explanatory, descriptive, or case study. These may also depend on the research paradigm, which may be either a positivist or interpretivist orientation, quantitative or qualitative research. The decision on the choice of methodology should not be made haphazardly, but logically, and with the research objective in focus. Usually, when any aspect of the research methodology is unclear to the researcher, he or she should do further readings and discuss with the research supervisor to get further insight before proceeding. Also, peers, colleagues, and experts may be consulted to help.

As for me, in examining SMA adoption in the Nigerian banks, I adopted the positivist approach, which seeks to identify testable hypotheses about the association between two or more variables that is secured upon structured methodologies to enable generalization and quantifiable observations with the help of statistical methods. With the positivist philosophy, researchers play the role of an objective analyst to evaluate the collected data and produce appropriate results to achieve the objectives of the study. Upon adopting this philosophical paradigm, survey research design was adopted to examine the adoption and associated benefits of SMA in the Nigerian banking industry. Survey was chosen, first, because of the assumed philosophy. Also, because it helps to elicit data objectively from the study’s sample to make generalization to the population and it limits the researcher’s interference with the study’s outcome.

Population and Sampling Design

The research, being an exploratory study of the Nigerian banking industry with a survey design to elicit information for data analysis, adopted all the 21 registered banks in Nigeria to constitute the study’s population. Taro Yamane (1967) sample formula was used to select 20 participating banks from the 21 registered banks. According to Yamane, n = N⁄(1+Ne2), where n is the sample size, N is the population, and e is the error limit (5%). By stratified and simple random sampling methods, 80 bank managers were determined as the sample size. Four respondents at the managerial level were drawn from each of the 20 banks within Lagos State, giving a sum of 80 observations. Information about the registered banks was obtained from the website of the Central Bank of Nigeria at the time when the study was conducted.

Research Instrument for Data Collection

Primary data were collected with the aid of a structured questionnaire. The choice of this instrument was because it is cost-effective, time-efficient, and easy to evaluate objectively. With the use of a questionnaire, it is relatively quick to elicit information from a large portion of a group. The questionnaire according to positivists is believed to be one major instrument in gathering quantitative data that can be used to create new theories and/or test existing hypotheses. Also, with this instrument, large amounts of information can be collected from a large number of people in a short period and in a relatively cost-effective way. Normally, the design of a questionnaire determines the quality of data to be collected in a survey research, and so, cautious attention should accord its design, which must aim at exactitude, logic-tightness, and economy (Kothari & Garg, 2014; Oppenheim, 1992). The questionnaire used in the research was designed to measure three major components of SMA technique as identified by Kenneth Simmonds (1981) and Michael Bromwich (1990). These components include competitors’ information, customers’ information, and information on the market. Ordinal data, which were gathered on a 5-point Likert-type scale, were converted to scale by computing ground mean scores for all the variables.

Validity and Reliability of the Research Instrument

The validity of a research instrument refers to the degree or ability of the instrument to measure what it aims to measure, while the reliability of a research instrument refers to the reproducibility and consistency of the instrument and the degree to which it is free from random error. Mathematically, reliability is defined as the proportion of the variability in the responses to the survey, that is, the result of differences in the responses. No doubt, answers to a reliable survey would differ because respondents have different opinions and not because the survey is confusing nor has multiple interpretations. Usually, to achieve the reliability of a research instrument, few copies of the questionnaire are administered to a set of population through a test and retest method or a pilot study. It could also be achieved by a split-half method or Cronbach’s alpha computation (Field, 2005).

Accordingly, to ensure the validity of the research instrument used in collecting data in my study on SMA adoption, the development of the initial draft drew upon the extensive experience of the supervisor of the research and from management and contemporary accounting experts, whose constructive suggestions enhanced the final draft of the research instrument. In addition, the reliability of the instrument was certified by computing a Cronbach’s alpha. The results of the Cronbach’s alpha test for the combined components relating to SMA adoption (α = .665) and strategic decision-making (α = .672) suggested the presence of reasonable level of reliability of the research instrument.

Research Practicalities and Method in Action

With the help of four research assistants, 80 copies of the questionnaire were distributed face-to-face across 20 banks located in Lagos State, which is the commercial hub and headquarter for most of the banks. It was quite difficult getting the respondents to participate in the survey. Most of the time, I was asked to leave the bank even without the questionnaire being filled. I had to plead with some of the respondents and assured them that the questionnaire will take only a few minute to fill. Some other times, I was mistaken to be a customer who came for banking transactions, but after making my purpose of visit known, I was ignored. At other times, I had to get contact persons in those banks who assisted in persuading their fellow colleagues before I was granted audience. The experience was quite discouraging. In fact, some copies of the questionnaire were misplaced by the respondents, which I had to replace.

In all, of the 80 copies of questionnaire administered, 74 (92.5%) copies were completed, of which 71(88.75%) copies were found to be valid and usable for analysis. I was able to get that much with the help I got from contact persons and with the support of four research assistants who visited other locations. The use of research assistants in survey research is usually very helpful in reaching more respondents in record time. I would encourage future researchers to always engage research assistants when conducting a survey research.

One thing I also noticed in the process of collecting data was that many of the respondents were skeptical and unwilling to divulge any information. This may be because of the policy of the banks, which prohibits disclosure of information to third parties, and/or due to the security challenges in Nigeria. Again, I have noticed that in many developing countries, many professionals in practice do not really value academic research. This is one major challenge that has widened the gap between accounting theory and practice in Nigeria.

Data Analysis and Findings

In the study, two hypotheses were tested to provide empirical evidence on the benefits of SMA adoption. The hypotheses tested in the study are stated below.

  • Hypothesis 1: The adoption of SMA technique has no significant effect on strategic decision-making in banks in Nigeria.
  • Hypothesis 2: Access to information on competitors, customers, and the industry does not significantly contribute to strategic decision-making in banks in Nigeria.

Hypothesis 1 was tested using simple regression estimation analysis, while Hypothesis 2 was tested using Pearson’s chi-square test. The choice of Pearson’s chi-square test was because the data gathered for Hypothesis 2 were ordinal data (nonparametric). The Pearson’s chi-square statistical tool was used to test the individual contribution of SMA components to strategic decision-making. In summary, the findings of the study suggested that SMA is distinct in its features and orientation toward the practice of management accounting. Also, the findings suggested that banks in Nigeria make use of SMA technique as a principle of operation and that SMA adoption has contributed significantly to strategic decision-making in the area of competitive advantage and increased market share.

Practical Lessons Learned

As mentioned earlier, in my research on SMA adoption, a survey method was adopted due to the peculiarity of the study. Besides, from the onset, the objective of the study and the underpinning paradigm (positivism) guided my choice of research design. The study explored whether banks in Nigeria use SMA technique as part of management strategy in decision-making, and survey research design was thought to be the appropriate method to achieving this objective. In designing the research instrument, no prior scale was found for measuring SMA variables; therefore, the questionnaire was designed to measure each component of SMA based on Kenneth Simmonds’s and Michael Bromwich’s persuasions on SMA.

In the course of my investigation, there were certain limitations I encountered being my first attempt in using survey method in undertaking a research in the field of management accounting. Usually, research limitations are the characteristics of the design or methodology that influence the application and interpretation of the results of a study. These are constraints on generalizability and utility of the findings of the study. Some of the limitations I encountered are stated below.

  • Limited scholarly evidence on the adoption and application of SMA technique in nonmanufacturing firms in developing countries. That is, no prior study was found in Nigeria and other developing countries to have examined SMA adoption in the banking industry with a survey design methodology.
  • There were only few theories that have been used in prior studies to support SMA technique. Rather than theories, there were more of concepts and models as bases for discussions. This also constituted a challenge in deciding on the research method to adopt for the study.
  • The study was limited by the reticent attitudes of the respondents toward responding to the questionnaire. In fact, accessing higher level managers (strategic managers) was quite difficult; therefore, the sample was limited to more of middle (tactical managers) and lower managers (operational managers).
  • I also had the challenge of designing the survey instrument (questionnaire). I could not find any pretested construct or measurement scale, nor did I develop any to measure the variables of SMA. Rather, I used a group of statements to measure each component of SMA. The components of SMA variables measured in the study were (a) competitors’ information, (b) customers’ information, and (c) information on the industry (market).
  • A test–retest was not conducted, which would have enhanced the reliability of the questionnaire. However, Cronbach’s alpha coefficients were computed to certify the reliability of the research instrument. The Cronbach’s alpha is a standardized test that has been widely used by researchers to certify the reliability of a survey instrument.

Nevertheless, despite these limitations, the study was able to achieve its objectives. As a reflection, some of the things that should have been considered in improving the quality of the study are highlighted below:

  • A standardized construct should have been developed in measuring the variables of SMA. This would have enhanced the analysis aspect of the research. For a survey research, it is advisable for researchers to adopt or adapt prior constructs and scales to measure the variables. However, if no prior scale is available, researchers should make every effort to develop and standardize scales of measurements, which may be adopted in future research.
  • An introductory letter from my University to the banks should have been obtained for easy access to the bank managers. This may have cleared security fears and given me access to senior managers. I would advise younger researchers who may have plans to adopt the survey method to ensure that they obtain introductory letter from their institutions and ensure that all security and ethical issues are cleared. By so doing, they may secure the cooperation of the prospective respondents.
  • Interview sessions should have been incorporated in the survey, which would have helped in obtaining helpful information that may not have been captured in the questionnaire. Researchers are encouraged, if possible, to have a mix of questionnaire and interview approaches in data gathering when researching on issues relating to managers or business professionals.
  • The sample size should have been larger than just the 80 managers used in the study. This would have made the analysis more robust and enhanced the generalization of the findings. Researchers in general are encouraged to, as much as possible, use larger sample size when conducting a market-based research.

Supervisor’s Supports

I must add that my project supervisor played a very significant role in ensuring that the research was completed. Some of the valuable contributions I received from my supervisor are stated below:

  • My supervisor was the one who suggested the research topic.
  • I received valuable guidance from my supervisor throughout the research process.
  • I was able to get some prior literature from my supervisor, which assisted me in the literature review.
  • My supervisor was always there to read and correct the draft project before any presentation.
  • I received much encouragement from my supervisor whenever I encountered serious setbacks.


It is accepted generally that survey research method is a widely used method in many disciplines in both social and behavioral sciences. Although survey method has its disadvantages, the advantages are more. It is more appropriate when a large number of respondents are to be sampled. It assists in collecting all types of data set and supports the use of many statistical analysis tests. Survey methodology supports both theory testing and theory building researches.

This case study has shown that survey method is a suited method to adopt when considering a research in the fields of accounting, management, and business. I was able to successfully conduct a research on SMA adoption and benefits in the Nigerian banks with a survey method. Both the challenges encountered in conducting the research and the lessons learned during the process have been highlighted in this case study. Particularly, this case study has pointed out some of the challenges future researchers in developing countries may encounter using survey research method.

On a final note, when faced with the choice of research method to adopt, younger researchers should not base their decision on what is convenient or easy to use. Rather, this choice should be guided by the objective of the study and the nature of the research. In addition, further readings should be done, and experts’ counsel should be sought for proper guidance on the choice of a research method.

Exercises and Discussion Questions

  • In your own understanding, what are the important things accounting researchers should consider when conducting research relating to emerging areas in management accounting?
  • What do you think are the challenges researchers in developing countries face when conducting research that involves the use of survey methodology?
  • What are the advantages and disadvantages of using a survey methodology in conducting an empirical research?
  • What other method(s) do you think can be used as a substitute to avoid the challenges of using survey method?
  • What do you understand by the positivist approach to research?
  • What are the factors to be considered when deciding on the research method to adopt?
  • What are the factors that should be considered when designing a research questionnaire?

Further Reading

Bromwich, M. (1990). The case for strategic management accounting: The role of accounting information for strategy in competitive markets. Accounting, Organizations and Society, 15, 2746. doi:
Cadez, S., & Guilding, C. (2008). An exploratory investigation of an integrated contingency model of strategic management accounting. Accounting, Organizations and Society, 33, 836863. doi:
Green, A. (2015). The advantages of an interview over a questionnaire. Available from
Hassan, T. (1995). Understanding research in education. Lagos, Nigeria: Merrifield Publishers.
ICAN Study Pack. (2010). Business communications and research methodology. Lagos, Nigeria: VI Publishers.
Juras, A. (2014). Strategic management accounting: What is the current state of the concept? Economy Transdisciplinarity Cognition, 17, 7683.
Okoye, E., & Akenbor, C. O. (2008). Strategic management accounting practices in a competitive environment: Theoretical exposition. ABSU Journal of Management Sciences, 4(2), 118.
Roslender, R. (1995). Accounting for strategic positioning: Responding to the crisis in management accounting. British Journal of Management, 6, 4557. doi:
Tillmann, K., & Goddard, A. (2008). Strategic management accounting and sense making in a multinational company. Management Accounting Research, 19, 80102. doi:


Kothari, C. R., & Garg, G. (2014). Research methodology: Methods and techniques (
3rd ed.
). New Delhi, India: New Age International.
Oppenheim, A. N. (1992). Questionnaire design, interviewing, and attitude measurement (
New edition
). London, England: Pinter Publishers.
Roslender, R., & Hart, S. J. (2003). In search of strategic management accounting: Theoretical and field study perspectives. Management Accounting Research, 14, 255279. doi:
Roslender, R., & Hart, S. J. (2010). Strategic management accounting: Lots in a name (No. 1005). Edinburgh, UK: Accountancy Research Group, Heriot-Watt University.
Simmonds, K. (1981). Strategic management accounting. Management Accounting, 59(4), 2629.
Tillmann, K. (2003). Strategic management accounting and sense making: A grounded theory study (Doctoral dissertation). Available from
Yamane, T. (1967). Statistics: An introductory analysis (
2nd ed.
). New York, NY: Harper & Row.
locked icon

Sign in to access this content

Get a 30 day FREE TRIAL

  • Watch videos from a variety of sources bringing classroom topics to life
  • Read modern, diverse business cases
  • Explore hundreds of books and reference titles