A Contingency Study of the Adoption of Competitor-Focused Accounting

Abstract

Using data collected via a questionnaire survey of large New Zealand companies, the results of investigating the incidence and perceived value of competitor-focused accounting (CFA) practices are reported. CFA usage has been found to be higher than what might have been anticipated given the minimal attention afforded the subject in the mainstream normative management accounting literature. It has also been found that New Zealand accountants are positively disposed to the potential of competitor-focused accounting in a manner suggestive of an opportunity for greater CFA usage. Following a factor analysis, it is suggested that CFA comprises two dimensions; these have been labelled "competitor monitoring" and "strategic accounting". Three factors have been found to play statistically significant contingent roles in connection with usage and perceptions of CFA. It has been found that larger companies and companies that emphasise gaining early entry to new markets (as opposed to low risk or defensive market strategies), have a greater tendency to use CFA practices and see a greater potential in the usefulness of CFA. Companies characterised as adopting a "build" rather than a "harvest" strategy see greater potential in the use of "strategic accounting".

JEL Classification: M40, M46