| This explanatory case study looks explicitly at the what, how, and why of management accounting system (MAS) change with the adoption of a total quality management (TQM) philosophy and its operationalization through continuous process improvement (CPI) at the level of the firm. This allows for an examination of content (information definition requirements), process (process analysis), and structure (MAS design). This research study also looks implicitly at the perceived consequences of the MAS changes on performance.;The York manufacturing plant of Harley-Davidson, Inc. was chosen as the subject for this research study consistent with the selection criteria of a dynamic competitive environment, an advanced technology base, the adoption of a TQM philosophy and its operationalization through continuous process improvement, MAS changes, and management commitment for an in-depth field research study. This longitudinal study covers the period from 1981 through 1993 with a discussion of prospective accounting changes for 1994.;The conceptual framework is a synthesis of Otley's contingency theory and Johnson's structure of business performance in the 1990s. Preliminary research looked at strategy, environment, technology/advanced manufacturing environment, and performance. Familiarity with the theoretical and empirical TQM and MAS literature served as a basis for positing relationships of key variables in a matrix of three dimension states--cost allocation, performance measurement, and overall MAS. A list of attributes was developed a priori for the placement of the firm in the continuum of change in expected MAS configurations with the adoption of a TQM philosophy and its operationalization through continuous process improvement. A formal interview protocol was used for data collection for an in-depth examination of the interrelationships between TQM and MAS.;Key research results indicate a shift toward actual cost and variable costing for cost allocation, the use of nonfinancial/qualitative measures of performance, and an emerging strategic cost management paradigm for overall MAS design. The key variables of people empowerment and a comprehensive, cohesive framework of integrated, complementary performance measures are explicitly incorporated in the contingency framework as refined for the Harley-Davidson, Inc. research. |
