当前位置:首页 >> 金融/投资 >>

Research onManagenet Accounting for SMEs Innovation in China


2010 Second International Seminar on Business and Information Management (ISBIM) ?

Research on Management Accounting for SMEs Innovation in China
Min Pan
Department of Accounting College of Economic and Management Wuhan University Wuhan,China minipanpan@126.com
Abstract— This paper introduces the findings from an extensive postal survey conducted in Wuhan Optics Valley, which looks at the innovation process of small and medium enterprises (SMEs), both incorporated and unincorporated. The implications of management accounting practices on innovation decisions in these businesses, are considered. The results indicate that management accounting is very sophisticated and has an effect on innovation management in most SEMs. Especially for accounting planning practices are in a position to utilise fully all available innovation risk reduction mechanisms. Keywords- Management Accounting;SMEs;Innovation

I.

INTRODUCTION

Small and medium-sized enterprises (SMEs) are of particular interest in the study of innovation. It has been argued that they are disproportionately responsible for significant innovations, and one estimate suggests they contribute more than twice as many innovations per employee as large organisations (Vossen,1998). Innovation processes need to build the internal and external R&D investment decisions mechanism,encourage investment in human resources, pay more attention to the management accounting report(Hatch, 2006). Although the literature on SMEs and innovation is large and diverse, and despite the existence of recognised centres of study with good linkages to policy makers, our knowledge of the place and operation of management accounting in small businesses innovation still contains significant gaps. In this paper, we hope to shed some light on the question of how managers in SMEs use management accounting to control innovation processes. We enter the subjective realities of individual managers, for these form the inner contexts in which management decisions are made, and accounting plan are evaluated. The paper is structured in three parts. First, we review the key literature which has sought to explain innovation in SMEs; secondly, we give more detail about our research study and its methods; and thirdly, we present our results and we conclude with a discussion of the link between our findings and the existing literature. II. LITERATURE REVIEW

process as much as product innovation (Ho man et al.,1998). The literature (for example,Brush and Chaganti, 1996; Delmestri, 1997; Frybourg, 1997; Kerr and McDougall, 1999;Heunks etal., 2008) suggested that management accounting was being made in two main avenues: first, reflect the information of learning and development in SMEs, and secondly, control their key linkages in which small firms gain access to resources both internal and external. Small and medium-sized businesses face particular challenges with regard to innovation. The range of skills represented in-house tend to be limited, as is their bench depth, so that the loss of certain organisation members can entail a serious loss of tacit knowledge, sometimes suffcient to endanger organisational survival. Retention, therefore, is always a serious concern for small and medium-sized businesses, particularly in relation to skilled labour. Yet skilled labour is what has been seen as especially key to small firm innovation, the related individual intellectual capacity information can be obtained from management accounting report (SBRT et al., 2008). In new technology-based firms, innovation is dependent on individual or collective business intelligence (Hatch,2006). Vossen(1998) and Openshaw (2003) suggested that innovative SMEs seek resources through a complex array of interconnections with their environment. Management accounting is are helpful to explore of this linkage between SME and environment. The importance of customers as informational resources regarding new product development, customer information has been noted (Malecki and Nicole,2001). The most versatile information source, however, is said to be the network of other firms suppliers, neighbours, or trade association partners. Management accounting can be used to make an explicit and planned strategy of cooperation (Storey and Chaganti, 2009). The above literature is informed by the grand narrative of the relations between management accounting and SMEs Innovation. What has been less established by this growing stream of research is how the managers evaluate the importance of management accounting. In conducting empirical study, our purpose was to gain insight into how the practitioners perceived the nature of management accounting in SME innovation.

It has been said that SMEs do not necessarily innovate in formally recognised ways. It is likely that they seldom use management accounting to control innovation

978-1-4244-8568-0/10/$26.00 ?2010 IEEE
250

ISBIM2010

III.

METHOD AND SAMPLE

We located the SMEs for our study by asking innovation counsellors at a Wuhan Optics Valley Business Link to identify the 36 most innovative SMEs in their area. Some of these turned out to be part of a very much larger organisation and so our final sample consisted of the 25 SMEs which we report in this paper. For another, they were all medium-sized firms, which comprise less than 22 per cent of Wuhan Optics Valley businesses. Also, given that less than 69 per cent of SMEs survive longer than five years. The oldest dated from 1992 with a re-incarnation in 2004, and the youngest (by a considerable margin) from 2009. They were all manufacturers, whose businesses ranged from optical metal products through valves and ultrasonics to high-tech communications devices. The smallest employed 35 staff and the largest 212; although the latter fell above the Wuhan Optics Valley upper limit of 200 employees for a medium-sized enterprise, we nevertheless included it, as it certainly could not be described as a large enterprise (LE) and still was proud to consider itself an SME. Our method of enquiry was to use in-depth semistructured interviews with individual managers in a variety of roles in each organisation. Within each organisation, we interviewed the CEO or CFO, and then we selected a purposive sample of managers to interview, on the basis of their involvement as key players in the innovationimplementation pathway. Our respondents totalled 57. Our content analysis focused particularly on ascertaining the value of management accounting, in so far as these could be derived from the narratives managers gave of their experience of innovation within their company. It allowed us to capture not only the technical detail of reallife innovation, but also its accounting level. We asked our respondents to tell the process of innovations as they had experienced them in their organisation. We wanted to understand how they use the tools of management accounting in innovation. The only aim which we investigated was wether the innovation process could be reflected and controled by management accounting. IV. RESULTS AND DISCUSSION It can be concluded that managers spend time in accounting exercises in order to minimise their innovation risk. In an attempt to throw some light on the effectiveness of management accounting practices in these firms, respondents were asked to indicate at what stage of the financial year they have the first indication about their estimated innovation risk. The responses are summarised in Table 1. It is very interesting to note that only about one third (34.4 per cent) of the respondents know their innovation risk before the year end. A further 49.3 percent estimate their innovation risk after the year end, whilst 10.8 per cent only know their innovation risk when management accounting report is completed. Obviously estimating the innovation risk before the year end offers the opportunity to utilise available accounting control mechanisms effciently to help reduce the innovation risk. So why do all firms not try to estimate their innovation risk before the year end? Apparently,

time and money are an issue. Perhaps the relationship of SMEs management with their accountants (the main port of outside finacial planning advice) and advisers is more tuned to the accounting cycle.
TABLE I. ESTIMATION OF INNOVATION RISK

Question: When do you first know your estimated innovation risk?
Timing of estimation percentage

Before year end After year end When accounts are available When the products design are available When products prototype is completed Other

24.4 10.0 38.9 10.4 10.8 5.5

In Table 2, it can be seen that these costs are regressive since the proportion of companies who do not estimate their innovation risk before the year end falls as the businesses grow in size. Although it would be expected that more profitable companies devote more time and effort to management accounting planning, results here suggest that this is not the case. Both profitable and unprofitable firms are equally likely (or unlikely) to estimate their innovation risk before the year end. It could be argued that although management accounting planning can be expected to be important in profitable firms where more profits are subject to innovation, planning is also important in less profitable firms, where innovation will be crucial in the struggle to improve cashflow.
TABLE II. ESTIMATION BY SIZE OF COMPANY Timing of estimation
0-50 100-150 >150

Number of employees (%) Before year end After year end When accounts are available When the products design are available When products prototype is completed Other
chi-squared = 44.201, p = 0.000

19.9 9.1 41.7 11.0 12.4 5.9

33.3 14.9 36.2 7.8 7.1 0.7

40.7 9.9 31.9 4.4 4.4 8.8

Table 2 shows that management accounting planning practices become more sophisticated as the firm grows larger. However, since the majority of businesses are relatively small in size, accounting planning practices are generally unsophisticated. As a result small firms may fail to utilise available mechanisms effectively and eficiently to reduce their innovation risk which they do not know until after the year end, when it is too late to use most of these risk engineering. The primary accounting planning mechanism that such companies can use after the end of the financial year, in order to reduce their innovation risk, is investment in skilled labour/experts' pension schemes. Pensions are given favourable treatment in the legislation compared to other types of staffs, and as such they are an important aspect of innovation process. Pension scheme contributions not only reduce serious loss of tacit knowledge, but also accumulate intellectual capacity within the firm. However, contributions to pension schemes require money to be taken out of the business and so provide a disincentive to business growth, investment and employment.

251

In fact, when respondents were asked to indicate which planning mechanisms they use to reduce their innovation risk, skilled labour/experts' pension schemes were rated as the most commonly used mechanism(73.9 per cent), followed by the purchase of fixed assets before year end (69.9 per cent). Other less important mechanisms are paying important members to use up their allowance (44.5 per cent) and increasing owner/directors' salaries to exhaust their allowances (42.7 per cent). The responses are summarised in Table 3.
TABLE III. MANAGEMENT ACCOUNTING TO REDUCE
I NNOVATION RISK

contributions and salaries. On a macro-economic level, this may be efficient as such practices perfect investment in innovation with the potential to grow and to generate wealth and employment.

REFERENCES
[1] Acs, Z. J. and Audretsch, D. B. “ Innovation in Large and Small Firms: An Empirical Analysis”,American Economic Review, 78, 1988, pp.678-690 Czarniawska, B. “ Narrating the Organisation:Dramas of Institutional Identity”, University of Chicago Press, Chicago. 1997. Hatch, M. J. “ The Role of the Researcher: An Analysis of Narrative Position in Organisation Theory”, Journal of Management Inquiry, 5(4), 2006,pp.359-375. Heunks, F. J. “ Innovation, Creativity and Success” , Small Business Economics, 10, 2008, pp. 263-272. A. Nicole, “ Local Partnerships for Economic Development: Business Links and the Restructuring of SME Support”, Economic Development Quarterly, 12(3), 2001, pp.266-279. Openshaw, S. “Multivariate Analysis of CensusData: The Classification of Areas”, in D. Rhind (ed.) Census User's Handbook, Methuen, London,2003, pp243-263. SBRT, “ NatWest SBRT Quarterly Survey of Small Business in Britain”, 14(1), 2008, Small Business Resesarch Trust, London. Storey, J. “ The Meanings of Innovation”, Financial Times Mastering Management, No. 26, August,2009. pp.30-33. Vossen, R. W. “Relative Strengths and Weaknesses of Small Firms in Innovation”, International Small Business Journal, 16(3), 1998.pp88-94.

[2] [3]

Question: Do you use the following management accounting mechanisms to reduce your innovation risk?
Yes (%) No (%)

[4] [5]

1. skilled labour/experts' pension schemes 2. Buying of fixed assets 3. Pay other important members 4. Increase owners'/directors' salaries 5. Reduce management cost 6. Reduce operating expense 7. Reduce financial cost

73.9 69.9 44.5 42.7 36.4 23.2 21.1

26.1 30.1 55.5 57.3 63.7 76.8 78.8

[6]

Reiterating the above, it is clear that SMEs are normally late in estimating their innovation risk, thus they cannot make effcient use of some available management accounting mechanisms to reduce their innovation risk, and (possibly) as a result they rely on planning mechanisms mechanisms that involve the extraction of money out of the business, such as pension fund

[7] [8] [9]

252


相关文章:
Research on Tech SME Intellectual Property Innovation Mode_....doc
Research on Tech SME Intellectual Property Innovation Mode_英语学习_外语学习_教育专区。龙源期刊网 http://www.qikan.com.cn Research on Tech SME Intellectual...
open innovation in SMEs_图文.pdf
innovation Concept Spanning firm boundary Managing the external process of ...on partners SME SME Non-profit research centre Common case SME SME SME -...
Effectiveness of SMEs' Innovation and Entrepreneurship: the ....pdf
Effectiveness of SMEs' Innovation and ...innovation and entrepreneurship suficiently in China...study Oil this(more venture capital,new markets,...
SME Development in China: A Policy Perspective on SME ....unkown
Research (IIER), National Development and Reform ...SME DEVELOPMENT IN CHINA: A POLICY PERSPECTIVE ON... and technological innovation system for SMEs. ...
THE USE OF MANAGEMENT ACCOUNTING PRACTICES IN MALAYSIAN SMES.unkown
THE USE OF MANAGEMENT ACCOUNTING PRACTICES IN MALAYSIAN SMES Submitted by ...This research explores the uptake of a broad range of MAPs in Malaysian ...
...competitiveness and innovation strategies for Chinese SMEs....pdf
Knowledge management, sustainable competitiveness and innovation strategies for Chinese SMEs_经济/市场_经管营销_专业资料。De-08、lme7N01Sra .6 c20,ru ,.2(...
...as essential determinants of SMEs innovation.pdf
determinants of SMEs innovation_英语考试_外语学习_...The research focuses on the original information ...In: Managing in a time of great chase. Boston...
“Italian Food for Life”_图文.ppt
innovation sustaining measure - SMEs-NET SSA (EU...Food chain management Managing the food chain ? ...research/future/index_en.cfm Information on ...
U-SME INNOVATION DESIGN OF A MODEL FOR JOINT UNIVERSITY- SME ....pdf
Session U-SME INNOVATION: DESIGN OF A MODEL FOR JOINT UNIVERSITY - SME ...on research, systematic development and application of engineering design ...
A Research of Innovation Strategy on the Sustainable ....unkown
A Research of Innovation Strategy on the Sustainable Development of SME ...in China Cao Jianshu International Office, Wuhan University of Technology, ...
...THE DEVELOPMENT OF RESEARCH, TECHNOLOGY AND INNOVATION ....unkown
RESEARCH, TECHNOLOGY AND INNOVATION UNDER THE NSRF...Finland, 0.99 for Germany and 0.13 for China....“Voucher for SMEs”, supporting the purchase by...
...Management Innovation System Comparative study Finland China.unkown
University of Tampere, Finland Zheng Huang SME strategic management and innovationa comparative study between Finland and China Abstract: This research ...
STRATEGIC KNOWLEDGE MANAGEMENT IN SME BASED ON INNOVATION ....unkown
EXAMPLE FOR COMPLETE MANUSCRIPT STRATEGIC KNOWLEDGE MANAGEMENT IN SME BASED ON INNOVATION TRANSFER A CASE STUDY Justyna Patalas-Maliszewska, University of ...
...is a Driver of Innovation for Software Sector SMEs in ....unkown
2280-787X An Empirical Study of How the Knowledge Management is a Driver of Innovation for Software Sector SMEs in México Juan Mejía-Trejo* Department...
...to Innovation of SME in China: An Empirical Research.unkown
Uncovering Institution-based Barriers to Innovation of SME in China: An Empirical Research ABSTRACT Despite significant development, small and medium-sized ...
MANAGEMENT OF INNOVATION IN CHILE: A CASE STUDY FOR ENHANCING....unkown
MANAGEMENT OF INNOVATION IN CHILE: A CASE STUDY FOR ENHANCING INNOVATION CAPABILITY OF SMES Juan Sepulveda et al. De Boeck Supérieur | Journal of ...
...Management of Innovation in SMEs: A Multiple Case Study ....unkown
The Strategic Management of Innovation in SMEs: A Multiple Case Study Approach in Switzerland Thierry Volery Swiss Institute for Entrepreneurship and Small ...
Shaping the Future in an Age of Accelerating Change.unkown
Shaping the Future in an Age of Accelerating Change A Collection of Groundbreaking Perspectives on Business and Society THE GAME CHANGING SERIES The Boston ...
A Study to Explore Innovation Management Consulting ....unkown
A Study to Explore Innovation Management Consulting Opportunities at SMEs Riju...on barriers to innovation at SMEs, resources to protect and manage IP at ...
...type programme to support research and innovation in SMEs.unkown
POSITION PAPER UEAPME comments on the proposal for a SBIR type programme to support research and innovation in SMEs This position paper summarises the ...
更多相关标签: