Financial Consequences from Implementing Lean Manufacturing with the Support of Non-Financial Management Accounting Practices
Utah State University - School of Accountancy
William F. Wempe
Texas Christian University - M.J. Neeley School of Business
November 1, 2005
AAA Management Accounting Section 2006 Meeting Paper
In the last 30 years, many U.S. firms have adopted lean manufacturing strategies. Despite evidence of substantial variation in firms' success with JIT, TQM, and other lean strategies, relatively few studies have examined management accounting practices as a potential source of such variation. Using structural equation modeling, this study examines two advanced management accounting practices - benchmarking and the use of non-financial manufacturing performance measures - as potential mediators of financial performance in lean manufacturing environments. Consistent with the view that firms' management accounting systems must fit their operational strategies, our structural model indicates that lean strategies' financial performance effects are enhanced when non-financial manufacturing performance measures and benchmarking are included in a firm's management accounting system.
Number of Pages in PDF File: 48
Keywords: Non-financial management accounting practices, Lean manufacturing, Structural equation modeling, Financial performanceworking papers series
Date posted: August 1, 2005
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