Các nhân tố ảnh hưởng đến thực hiện kế toán quản trị môi trường tại các doanh nghiệp sản xuất ở việt nam – nghiên cứu cho cáctomtat e

Therefore, with the following reasons: 1 Sustainable development is the trend of modern society; 2 the role and benefits of environmental management accounting; 3 The need for environmen

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Prepared by

NGUYEN THI HANG NGA

FACTORS AFFECTING THE IMPLEMENTATION OF ENVIRONMENTAL MANAGEMENT ACCOUNTING IN MANUFACTURING COMPANIES IN VIETNAM –

A STUDY FOR THE SOUTHERN PROVINCES

Major: Accounting Code: 9340301

SUMMARY OF DOCTORAL DISSERTATION IN ECONOMICS

The project was completed at:

University of Economics Ho Chi Minh City

Academic Instructors:

Ph.D Pham Ngoc Toan Ph.D Tran Anh Hoa

Reviewer 1:

Reviewer 2:

Reviewer 3:

The dissertation will be presented to the Dissertation Board at the school level of University of Economics Ho Chi Minh City

At … (hours) (day) (month) (year)

The dissertation can be found at the library: The National Library and The Library of University of Economics Ho Chi Minh City

INTRODUCTION

1 Rationale for the research

Sustainable development is an essential development trend of modern society, it is a

“development which can satisfy the current need without affecting the ability to fulfil the need of future generations” (Keeble, 1998, p.20) In developed countries, green economy has become a business trend, while most developing countries temporarily prioritize economic development goals, and the operation of manufacturing companies which may lead to negative effect on the environment (O’Neill et al., 2005) However, under pressure of all stakeholders, firms have been doing business in

a more responsible manner Therefore, in order to serve the business decision-making, in addition to information about revenues, costs and profits, which were considered to be enough for decision-making in the past, these days managers also need information related to the environment Environmental management accounting which appeared in the 1970s, is able to provide information

to meet these requirements (Mohd et al., 2012) Performing environmental management accouting not only helps organizations conform to the law on environmental protection but also brings many benefits as well as ensuring the company’s business continuity and sustainable development (Delmas and Toffel, 2008)

Nowadays, environmental pollution is a matter of global concern, thus corporate social responsibility is often given central focus in discussions (Sadeghzadeh, 1995) In Vietnam, over the past few years, environmental pollution has increasingly become complicated, especially environmental issues which cause frustration among the public tend to increase According to the Ministry of Natural Resources and Environment (2016, p.28), every day, an average of 30,000 tons of solid, liquid, gaseous wastes and other hazardous wastes are emitted from industrial zones, clusters and industrial parks

The southern key economic region is an important economic region which makes great contribution to the economic growth of the country In 2016, the economic growth rate of this region was 1,5 times higher compared to the average growth rate of the whole country, its contribution to the budget accounted for 60% (Bui Ngoc Hien, 2017) However, along with the process of economic development, the southern key economic region has been subjected to enormous pressure on the environment According to published data, in many places the pollution index is 4 to 5 times higher than the permitted pollutant standard (Mac Thi Minh Tra, 2014) Facing this situation, the government, regulatory agencies, the mass media and the public will tighten their supervision on the compliance of environmental protection laws by businesses, organizations and individuals

As a means for companies to manage their business and the environment, environmental management accounting has received increasing attention from authorities, firms and researchers As

a relatively new branch of accounting, the number of research related to environmental management accounting is still very modest (Bouma and Van der Veen, 2002) There has not been much research

on environmental management accounting implementation in developing countries (Herzig et al., 2012) Especially in Vietnam, environmental management accounting is a new field in both research and practical applications Environmental management accounting is not yet popular in enterprises and there are only very few number of in-depth studies on environmental management accounting (Pham Thi Bich Chi et al., 2016)

Therefore, with the following reasons: (1) Sustainable development is the trend of modern society; (2) the role and benefits of environmental management accounting; (3) The need for environmental information of managers; (4) The actual situation of environmental pollution in industrial zones, clusters and parks in the southern key economic region; and (5) Lack of research on the factors affecting environmental management accounting implementation, the author has chosen

the topic “Factors affecting the implementation of environmental management accounting at

manufacturing companies in Vietnam – A study for the southern provinces” This research will

investigate the relationship between factors and environmental management accounting implementation at manufacturing companies in the southern provinces

2 Goal and objectives of research

2.1 Goal: Examining the effect of each factor on environmental management accounting

implementation in manufacturing companies in the southern provinces

2.2 Objectives:

- Reseach objective 1: Determining factors which (directly and indirectly) affect environmental

management accounting implementation in manufacturing companies in the southern provinces

- Reseach objective 2: Measuring the level of (direct and indirect) impact each factor has on

environmental management accounting implementation in manufacturing companies in the southern provinces

3 Questions of research: The questions corresponding to each specific objective are shown as

follow:

- Reseach question 1: What are the factors affecting environmental management accounting

implementation in manufacturing companies in the southern provinces?

- Reseach question 2: How does each factor influence environmental management accounting implementation in manufacturing companies in the southern provinces at present?

4 Subjects and scopes of research

4.1 Subjects of research: Environmental management accounting implementation and factors

affecting the implementation of environmental management accounting

1 Using qualitative research methods, with expert interviewing techniques This qualitative

research phase aims to: (1) Identifying the factors (direct and indirect) affecting environmental management accounting implementation in manufacturing companies in southern provinces, (2) Improving the measurement scale of environmental management accounting implementation and the scale of factors affecting environmental management accounting implementation

2 Using quantitative research methods, through the collection of data using questionnaires

and the application of SPSS and AMOS softwares to support data-processing This phase aims at solving the objective: Measuring the level of impact each factor has on environmental management accounting implementation at manufacturing companies in the southern provinces

6 The scientific and practical significance of the thesis

* Scientific significance: First, this study adds more information to the theoretical background of the

factors affecting environmental management accounting implementation Second, besides the direct effects, this study also analyzes the mediating effects of factors on the implementation of environmental management accounting Third, this study investigates the relationship between factors

in two different contexts (organizational and institutional context), through the examination of the effect of cognitive factors related to business environmental uncertainty on mimetic pressure when accelerating the implementation of environmental management accounting

* Practical significance: In Vietnam, environmental management accounting is a new area of

research and has not attracted much attention, hence this research is considered timely and appropriate The findings of the study will provide implications for manufacturing companies when implementing environmental management accounting This study also helps heighten managers’ awareness of doing business responsibly for the environment The knowledge obtained from this study could promote the implementation of environmental management accounting at manufacturing companies in the southern provinces as to increase the economic benefits, protect the environment and develop sustainably

7 Structure of the thesis

In addition to the introduction and conclusions, the thesis consists of contents:

Chapter 1: Literature review

Chapter 2: Theoretical background

Chapter 3: Research methodology

Chapter 4: Research results and discussion

Chapter 5: Conclusions and some implications

CHAPTER 1: LITERATURE OVERVIEW 1.1.1 Studies instructing how to implement environmental management accounting

1.1.1.1 Previous studies in the world

The studies instructing the implementation of environmental management accounting have presented concepts, classification of environmental information, methods of environmental costs and incomes determination and guidelines on environmental management accounting Some typical studies are: USEPA (1995); Gray et al (1996), Epstein (1996a), Sefcek et al (1997); Elkington (1997); UNDSD (2001); Burritt et al.; Lamberton (2005); IFAC (2005) These studies have indicated many concepts of environmental management accounting and currently, there is no unified concept of environmental management accounting However, the concepts developed by UNDSD (2001) and those proposed by IFAC (2005) are used extensively in research on environmental management accounting (Schalteger

et al., 2011)

Studies which are also considered to be part of the studies instructing environmental management accounting implementation are those examining methods of environmental costs determination These include the following lines of research: (1) Material flow cost accounting (Schaltegger and Buritt, 2000; UNDSD, 2001; Federal Environment Ministry Germany, 2003; IFAC, 2005); (2) Life cycle costing (Schaltegger and Buritt, 2000; Parker, 2000); (3) Activity-based costing (Stuart et al., 1999); (4) Adequate cost accounting (Epstein,1996b; Bebbington et al., 2001); and (5) Full cost accounting (USEPA, 1995) The studies which are classified into group (1), (2), (3) aim to serve cost analysis, while the (4) and (5) types of studies aim to serve the purpose of evaluating investment projects

1.1.1.2 Previous studies in Vietnam

Currently, in Vietnam, studies which instruct environmental management accounting implementation are mainly based on UNDSD (2001) and IFAC (2005) These studies focus primarily on concepts, classifications, methods of environmental costs and incomes determination and accounting treatment for environmental costs, incomes, or lessons learned from other countries in order to form the guidelines on environmental management accounting Some prominent studies include: Nguyen Chi Quang (2003); Tran Thi Hong Mai (2012); Pham Duc Hieu (2010); Vo Van Nhi and Nguyen Thi Duc Loan (2013); Huynh Duc Long (2015); Hoang Thi Bich Ngoc (2014); Huynh Duc Long (2016)

1.1.2 Studies on environmental management accounting application

1.1.2.1 Previous studies in the world

Recently, many authors have devoted their attention to the applications of environmental management accounting in different organizations There are some typical studies, such as: Deegan et al (1996); Brown and Deegan (1998); Verschoor (1998); Bartolomeo et al (2000); Frost and Wilmshurst (2000); Frost and Seamer (2002); Burritt et al.; Masanet-Llodra (2006); Burritt and Saka (2006); Kokubu and Nashioka (2008)

1.1.2.2 Previous studies in Vietnam

In Vietnam, there are only a small number of studies on the applications of environmental management accounting in companies (Pham Thi Bich Chi et al., 2016) These studies mainly focus

on accounting treatment for environmental costs in companies operating in a specific field Some typical studies in this group are: Nguyen Thi Anh Tuyet and Nguyen Chi Quang (2006); Bui Thi Thu Thuy (2010); Pham Hoai Nam (2016); Hoang Thi Bich Ngoc (2017)

1.2 STUDIES ON FACTORS AFFECTING ENVIRONMENTAL MANAGEMENT ACCOUNTING IMPLEMENTATION

At present, there have been some in-depth studies on factors that influence the implementation of environmental management accounting in companies Some studies on factors affecting environmental management accounting implementation are: Ferreira et al (2010);Chang and Deegan (2010); Qian et al (2011); Jalaludin et al (2011); Christ and Burritt (2013); Alkisher (2013); Jamil et

al (2015); Mokhtar et al (2016); Pham Thi Bich Chi et al (2016); Nguyen Thi Nga (2016); Nguyen Thi Hang Nga (2018a); Nguyen Thi Hang Nga (2018b); etc These studies will provide evidence and

a more complete understanding to policy makers and advocates of implementing environmental management accounting

Previous studies have mainly employed contingency theory and institutional theory to explain the implementation of environmental management accounting Among the factors influencing

environmental management accounting implementation which are taken from the previous studies, there are six common factors supported by many authors: Coercive pressure, Normative pressure, Mimetic pressure, Awareness of business environmental uncertainty, Environmental Strategy, and Task complexity As proposed by Al Kisher (2013), it is possible to classify these factors into two groups, namely, the group of factors which belong to the contingency theory (organizational context) and the group of factors which are associated with the institutional theory (institutional context)

1.2.1 Factors related to institutional context

Based on previous research using institutional theory to analyze the level of impact of external pressure on organizations while implementing environmental management accounting, there are three main elements of the institutional context chosen for analysis These factors consist of coercive pressure, normative pressure and mimetic pressure

1.2.1.1 Coercive pressure

Coercive pressure is an impportant factor of the institutional theory, which is used to explain innovation in an organization (DiMaggio and Powell, 1983; Delmas and Toffel, 2004b) Some researchers has found the influence of coercive pressure on environmental management accounting implementation, such as: Ambe (2007); Chang and Deegan (2010); Qian et al (2011); Alkisher (2013); Jamil et al (2015); Nguyen Thi Nga (2016); Pham Thi Bich Chi et al (2016); Nguyen Thi Hang Nga (2018a)

1.2.1.2 Normative pressure

The normative pressure of professional association is a factor which relates to institutional context, and it is a crucial factor in previous studies (DiMaggio and Powell, 1983; Chang and Deegan, 2010) Ambe (2007); Qian et al (2011); Jalaludin et al (2011); Alkisher (2013); Pham Thi Bich Chi et al (2016); Nguyen Thi Hang Nga (2018a) realize that the degree of implementing environmental management accounting is affected significantly by normative pressure

1.2.1.3 Mimetic pressure

Mimetic pressure is one of the factors of institutional theory, some researchers such as Qian et al (2011); Jalaludin et al (2011); Jamil et al (2015); Pham Thi Bich Chi et al (2016) examined the influence of this factor on environmental management accounting implementation

1.2.2 Factors related to organizational context

Ferreira et al (2010); Chang and Deegan (2010); Qian et al (2011); Alkisher (2013); Christ and Burritt (2013); Mokhtar et al (2016) studied a large number of factors of organizational context that affect the technical and administrative improvements of companies

Based on documents related to environmental management accounting implementation, three main variables referred to institutional context were selected for the analysis of environmental management accounting implementation in manufacturing companies in the southern provinces, namely: environmental strategy, awareness of business environmental uncertainty and task complexity These variables are chosen due to their importance in previous studies or their significant impact on environmental management accounting implementation

1.2.2.1 Awareness of business environmental uncertainty

Business environment is a factor referred to organizational context in studies applying contingency theory (Chenhall, 2003) If an organization experiences considerable changes in business environment, it may need to reform the accounting system so as to provide more information for decision-making in order to minimize the impact of the business environment and manage related costs (Gul and Chia, 1994) Awareness of the business environmental uncertainty is found to be a great explanatory variable for implementing environmental management accounting in a number of studies like Chenhall (2003); Qian et al (2011); Nguyen Thi Hang Nga (2018b)

1.2.2.2 Environmental strategy

With respect to environmental management accounting, Parker (1997) reveals that the implementation

of environmental management accounting may depend on the organization’s environmental strategy This result is also confirmed in the study of Ferreira et al (2010); Qian et al (2011); Cadez and Guilding (2012); Christ and Burritt (2013); Alkisher (2013) Recently, Pham Thi Bich Chi et al (2016); Nguyen Thi Hang Nga (2018b) has found evidence of the effect of environmental strategy on environmental cost management accounting implementation in manufacturing companies in Vietnam

1.2.2.3 Task complexity

The work of an organization (often referred to as organizational task) relates to the type of work done

by an organization (Daft and Macintosh, 1978) The task comprises the complexity of the task execution process, the amount of time needed to think about solutions to problems related to the work, and the knowledge required to perform tasks (Perrow, 1967) As regards environmental management accounting, the findings of Woodward (1965); Chang and Deegan (2010); Qian et al (2011) indicate that environmental management accounting implementation has a strong relationship with task complexity

1.3 SOME COMMENTS ON PREVIOUS STUDIES

1.3.1 Respondents of previous studies

Studies related to the application and implementation of environmental management accounting have given the views of managers more attention than others’ views Focusing solely on the managers’ views is not appropriate enough to explain the factors that may influence the application and implementation of environmental management accounting, thus there need to be additional research based on the views of other respondents

1.3.2 Results of previous studies

1.3.2.1 Coercive pressure

There are some differences between previous studies on coercive pressures in motivating companies

to adopt and implement environmental management accounting Ambe (2007); Chang and Deegan (2010); Alkisher (2013); Jamil et al (2015); Nguyen Thi Nga (2016); Pham Thi Bich Chi et al (2016); Nguyen Thi Hang Nga (2018a), found that coercive pressure is one of the most important factors affecting the implementation of environmental management accounting However, the study of Jalaludin et al (2011) suggests that coercive pressure does not have a strong influence on the application of environmental environmental management accounting

1.3.2.2 Normative pressure

Contrary to expectations, the study of Chang and Deegan (2010); Jamil et al (2015) presents that the pressure of professional and formal education associations (normative pressure) does not have a signifcant impact on the application of environmental management accounting Meanwhile, Ambe (2007); Qian et al (2011); Jalaludin et al (2011); Alkisher (2013); Pham Thi Bich Chi et al (2016); Nguyen Thi Hang Nga (2018a) found that normative pressure is the most important factors affecting environmental management accounting implementation Therefore, the conclusions of the effect of normative pressure still vary between previous studies

1.3.2.3 Mimetic pressure

Studies conducted by Qian et al (2011); Alkisher (2013); Nguyen Thi Hang Nga (2018a) indicate a positive effect of mimetic pressure on environmental management accounting implementation in Vietnamese manufacturing companies Nevertheless, the results of Chang and Deegan (2010); Jalaludin et al (2011); Jamil et al (2015); Pham Thi Bich Chi et al (2016) report that mimetic pressure does not have a considerable influence on the application of environmental management accounting

1.3.2.4 Awareness of business environmental uncertainty

While awareness of business environmental uncertainty is found to be a major explanatory factor for the implementation of environmental management accounting (Chenhall, 2003; Qian et al., 2011; Nguyen Thi Hang Nga, 2018b), Osborn (2005) argues that the effect of awareness of business environmental uncertainty on environmental management accounting implementation is not as significant as the impact of other random variables Similarly, Chang and Deegan (2010); Pham Thi Bich Chi et al (2016) also found no evidence of the effect of awareness of business environmental uncertainty on the implementation of environmental management accounting

1.3.2.5 Environmental strategy

The findings of Chang (2007) suggest that the environmental strategy does not significantly affect the application of environmental management accounting This conclusion is not consistent with the findings and expectations of Kokubu and Nashioka (2006); Qian et al (2011); Christ and Burritt, 2013; Alkisher, 2013; Pham Thi Bich Chi et al (2016); Nguyen Thi Hang Nga (2018b), who say that corporate strategies are one of the most crucial factors influencing the implementation of innovation

in organizations

1.3.3 The number of previous studies

Despite a wide range of studies on the application of environmental management accounting in different countries around the globe, only a few number of studies focus on environmental management accounting in developing countries In Vietnam, recently this subject has attracted attention from several authors, for instance, Hoang Thi Bich Ngoc (2016); Pham Thi Bich Chi et al (2016); Nguyen Thi Nga (2016) Nonetheless, these authors only consider one aspect of environmental management accounting, which is environmental cost management accounting Besides, the scopes of their studies are limited in a specific business sector

1.4 Gaps of the research and Orientation to the research

1.4.1 Gaps of the research

In Vietnam, environmental management accounting is not yet popular in companies and only a few number of studies into environmental management accounting were carried out (Pham Thi Bich Chi

et al., 2016) The results of some studies in foreign countries have revealed factors that affect the implementation of environmental management accounting in organizations However, most of these studies did not comprehensively examine all factors and they also ignored the indirect effect which factors may have on environmental management accounting implementation

Furthermore, there are differences between the findings in previous studies The results of some studies do not meet the theoretical expectations, or contradictory to the arguments and findings reported in the research on factors affecting the implementation of environmental management accounting

1.4.2 Orientation to the research

Firstly, this research inherits information from previous study on factors affecting the implementation

of environmental management accounting, while examining the indirect effect of factors on environmental management accounting implementation

Secondly, this study is one of the few studies which analyze how factors from two different contexts (organizational context with factors developed from contingency theory and institutional context with factors developed from institutional theory) affect the implementation of environmental management accounting by investigating the impact of awareness of business environmental uncertainty on mimetic pressure during the implementation of environmental management accounting

1.5 SUMMARY OF CHAPTER 1

The chapter 1 provided an overview of previous studies in the world which examine factors affecting the implementation of environmental management accounting By reviewing these previous studies, the author has found the gaps of the study and hence, determining the research orientation to the thesis

CHAPTER 2: THEORETICAL BACKGROUND 2.1 AN OVERVIEW OF ENVIRONMENTAL MANAGEMENT ACCOUNTING

2.1.1 History of formation and development

2.1.2 Definitions and classification of Environmental accounting

2.1.3 Definitions of Environmental management accounting

The definitions of environmental management accounting are widely diverse (for example: Bennett and James, 1998; Bartolomeo et al., 2000; UNDSD, 2001; Jasch, 2003; Bouma and Correlje, 2003; IFAC, 2005; Staniskis and Stasiskiene, 2006) Although there are some differences in definitions of

mannagement accounting in terms of scope of application, most definitions explain that environmental management accounting is an additional information system for management accounting It is not a separate system, but it helps to improve the management accounting system The definition provided by Bennett and James (1998) is chosen for the objectives of this research Accordingly, “Environmental management accounting is an information system which provides monetary and non-monetary information to improve and evaluate economic and environmental efficiency of a company” This definition highlights the importance of information generated by environmental management accounting in order to enhance the financial and environmental efficiency

of an organization

2.1.4 Subject of Environmental management accounting

According to IFAC (2005), subjects of environmental management accounting include:

- Accounting for environmental cost

- Accounting for environmental revenues and incomes

- Accounting for resource efficiency assessment

2.1.5 Types of Environmental management accounting information

The implementation and application of environmental management accounting in an organization must include accounting measured in terms of money (financial information or monetary information) and accounting measured in terms of other units (non-monetary information) about using materials, labor hours as well as other cost control

2.1.6 Content of Environmental management accounting

The contents of environmental management accounting in companies are approached from different angles

- As regards the work cycle, environmental management accounting comprises the following contents:

+ Organizing the collection of initial information (determining environmental costs and incomes) + Organizing the systematization and processing of environmental information (synthesizing and distributing information about environmental costs and incomes, Life Cycle Cost, Material Flow Cost Accounting, Input Output Analysis)

+ Organizing the analysis of environmental performance

+ Organizing the supply of environmental information (environmental management accounting report)

To conclude, environmental management accounting implementation consists of organizing the

collection of information, processing, analyzing and providing environmental information

2.2 RELATED FOUNDATION THEORY

2.2.1 Institutional theory

2.2.1.1 The concept of institutional theory

Institutional theory mentions changes in organizational behavior (changes in models, strategies, processes, methods, techniques, etc.) due to pressure from stakeholders and the ways that organizations may do to survive and develop legally (Ninh Thi Kim Thoa, 2015)

2.2.1.2 Basic elements of institutional theory

Scott (1995) classified the three elements of institutional theory into: Coercive pressure, normative pressure and mimetic pressure

- Coercive pressure is the state that organizations are subjected to the official or unofficial pressure

exerted by external authorities (government, regulators, customers, suppliers), which causes them to change the system and procedures so as to comply with the regulations

- Normative pressure, which requires organizations to adhere to professional standards, rules,

principles and professional ethics, this pressure is applied to organizations by education and professional associations

- Mimetic pressure presents the pressure which organizations need to seek for patterns of successful

organizations to learn their activities, models, processes, methods and techniques

2.2.1.3 The effect of institutional elements on environmental management accounting implementation

The effect of institutional elements on implementing environmental management accounting is explained in figure 2.2 below

Source: Summary of author

Figure 2.2: The effect of institutional elements on environmental management accounting

implementation

2.2.1.4 The application of institutional theory to the research

In addition to the three main pillars of institutional theory that affect the implementation of environmental management accounting as explained in Figure 2.2, Delmas and Toffel (2004b) suggest that there may be interaction between institutional elements For example, under coercive pressure from the authorities, organizations and professional associations may have to develop more stringent standards, and professional bodies as well as professional associations have encouraged companies operating in the same business network to imitate the behavior of other organizations For the above arguments, the institutional theory employed in this study is presented in figure 2.3 below

Source: Summary of author

Figure 2.3: The application of institutional theory to the research 2.2.2 Contingency theory

2.2.2.1 The concept of contingency theory

Contingency theory suggests that there is no general accounting system suitable for all organizations

in all circumstances, organizations must continually assess and improve their management accounting systems in order to withstand the challenges of a constantly changing environment and an ever-changing organization (Hutaibat, 2005)

2.2.2.2 Basic elements of contingency theory

In previous studies, a large number of random factors were found to have impact on designing the accounting system In particular, random factors having effect on the design of management accounting system which were examined in most studies are: environment, strategy and organizational tasks (Chenhall, 2003)

- Awareness of business environmental uncertainty is considered to be awareness of the inability to

control or accurately forecast the future status of the business environment

- Environmental strategy is a comprehensive plan related to the environmental performance of a

company, with the purpose of deploying resources to establish a favorable environment for the company, including: complying with environmental regulations, producing environmental protection solutions, aiming at providing environmentally friendly products and achieving environmental certification

Coercive pressure

Normative pressure

Mimetic pressure

Environmental management accounting implementation

Coercive pressure

Normative pressure

Mimetic pressure

Environmental management accounting implementation

- Task complexity is perceived as the level of difficulty in the process of implementing

environmental management accounting (in terms of cost, time, effort, the complexity to solve problems related to the task), and the requirements of knowledge needed to perform the task

2.2.2.3 The effect of contingency elements on environmental management accounting implementation

Figure 2.5 below illustrates how the elements of contingency theory affect the implementation of environmental management accounting

Source: Summary of author

Figure 2.5: The effect of contingency elements on environmental management accounting

implementation

2.2.2.4 The application of contingency theory to the research

Apart from the three main elements of contingency theory that affect the implementation of environmental management accounting as presented in figure 2.5, as per the theoretical framework of Gordon and Miller (1976) about the impact of random variables on organizational behavior, random factors not only have direct effect but also produce indirect effect on the accounting information system of an organization through the influence of business environment on attributes of the organization By developing the research framework of Gordon and Miller (1976), Gupta and

Govindarajan (1984) argues that an organization can choose different strategies to tackle business environmental uncertainty This implies that awareness of business environmental uncertainty will affect a company’s environmental strategy which, in turn, will affect the implementation of environmental management accounting Hence, the contingency theory applied to this study is presented in figure 2.6 below

Source: Summary of author

Figure 2.6: The application of contingency theory to the research

Awareness of business environmental uncertainty

Environmental management accounting implementation Environmental strategy

Task complexity

Awareness of business environmental uncertainty

Environmental management accounting implementation Environmental strategy

Task complexity

2.3 FACTORS AFFECTING ENVIRONMENTAL MANAGEMENT ACCOUNTING IMPLEMENTATION FROM THE THEORETICAL BACKGROUND

2.3.1 Implementing environmental management accounting

2.3.2 Factors affecting the implementation of environmental management accounting

2.4 DEVELOPING THE RESEARCH HYPOTHESES

Based on the literature review and results of related studies, the author has formulated the following

environmental management accounting implementation

accounting implementation, through the mediating role of Normative

pressure

+

accounting implementation, through the mediating role of Mimetic

environmental management accounting implementation, through the

mediating role of Mimetic pressure

+

Environmental strategy

+

H10A Awareness of business environmental uncertainty has indirect effect on

environmental management accounting implementation, through the

mediating role of Environmental strategy

+

Source: Proposed by the author