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Management accounting in small-medium enterprises

Funded by: Chartered Institute of Management Accountants

Led by: Dr Michael Lucas (The Open University Business School)

Background

SMEs are the backbone of the UK economy. They employ around 59% of the workforce and contribute around 51% of the GDP. During his 2011 budget speech the Chancellor put much emphasis on SMEs where he introduced a number of measures to provide incentives to businesses. Much of this effort is focussed on SMEs who are seen as key to stimulating growth in the UK economy.

The UK economy is facing a number of severe economic problems most notably the low levels (and sometimes negative levels) of economic growth. At the same time, there is a growing appreciation of the importance of SMEs in promoting growth. There seems limited knowledge of the practices of management accountants in SMEs. This suggests an urgent need for a study into how management accountants can enhance the role of SMEs in the current business and economic environment.

Aims and objectives

This research is an exploratory study of whether the potential of management accounting is being fully leveraged by SMEs and, if not, why not. This research question will be explored using a small number (between 6 and 10) case studies of small-medium sized business enterprises. Specific objectives include:

  • To understand the roles played by management accountants in SMEs 
  • To understand how the management accounting function is resourced in SMEs
  • To identify areas where the management accounting function can be developed and strengthened in SMEs in the current business and economic environment

Findings

In view of the potential contribution of SMEs to the UK economy, understanding how this may be constrained by lack of appropriate usage of management accounting techniques is of value to the business community and wider society. For the participants, it is hoped that the study will raise their awareness of the contribution that particular management accounting techniques can provide in the planning, control and decision making of their organisation.

Research team

Links

Research centre: Responsibility and Regulation (R&R)