Exploring the inter-functional working relationship between the management accounting and marketing management function in local enterprise : a study

Abstract

Purpose: The purpose of this study is to explore the inter-functional relationship between the accounting and marketing functions given that this relationship is a pre-requisite for formal SMA adoption. Design: Semi-structured interviews were carried out in six local firms, from a number of industries. Separate interviews were conducted with the Chief Financial and Marketing Officers in each of the participant firms allowing the researcher to infer the inter-functional relationship between the two departments. Findings: Low levels of inter-functional communication, information sharing and collaboration were discovered in most of the participant firms. This resulted in a number of information gaps within both communities. On the same note, a number of knowledge gaps were found amongst the participant CFOs. A good amount of SMA practices were found to be implemented and developed without financial quantification or the involvement of the accounting community. Conclusions: The weak relationships found at the interface, together with the limited non-financial knowledge of CFOs, hinders the formal adoption of SMA practices. Marketers within market-oriented firms have taken the role of decision analysts given their affinity with the external market assisted through their adoption of SMA practices with minimal contributions being made by CFOs. Implications/Value: Despite the many calls made for management accounting to become more strategically relevant and futuristic to assist in decision formulation, traditional management accounting practices are still the norm within the firms investigated. CFOs need to become increasingly knowledgeable about their external environment, customer considerations, customer buying behaviour, and brand value implications amongst other pertinent modern business areas before they can actively contribute to strategic decision formulation.