The thesis focuses on the MAPs system, factors affecting the use of MAPs in manufacturing enterprises in Vietnam and impact on using MAPs on effective performance in manufacturing enterprises in Vietnam.
1 ABSTRACT Vietnam is integrating in the trend of globalization, creating a new era for enterprises to participate in a huge integration but there are many difficulties and challenges in competition not only takes place in Vietnam but also occurs among countries in the region and in the world In this context, the economic relations which appear in the business performing process of enterprises become more and more diverse and complex In order to solve the economic relations effectively, each company is necessarily equipped with modern management knowledge along with the effective support of many management tools to make the right decision in short -term as well as long-term to achieve success in the competitive conditions at the global level One of the most effective management tools today is the management accounting system Management accounting system supplies useful information, so that choosing to use management accounting practices (MAPs) to appropriate to the characteristics of each manufacturing enterprise, to ensure economic efficiency is highly essential issue, assisting administrators in performing their tasks to help businesses achieve strategic objectives MAPs in each country, each enterprise is very diverse, affected by many factors such as from the level of economic development, production technology, the role of professional organizations to cultural Businesses factors allow businesses to reach their main goals in order to improve business performance The international management accounting in general and MAPs in particular have been studied for a long time However, in Vietnam, research on MAPs in manufacturing enterprises is currently a controversial issue The research topic shows clearly the use of MAPs in manufacturing enterprises in Vietnam and is influenced by internal and external factors, determining the relationship of using MAPs with operational efficiency in the enterprises Since then, it is recommended for modern equipment manufacturing investment enterprises, improving revenue and total assets to be able to apply modern MAPs to improve operational efficiency in enterprises INTRODUCTION Importance of the study Vietnamese enterprises in general and manufacturing enterprises in particular have contributed to the development and growth of GDP of the country in the recent years Especially, the manufacturing industry has experienced strong growth with the highest growth rate in the last few years which creates the motivation for industrialization and modernization It contributes a great role to the growth and increase in GDP According to the General Statistics Office (Ministry of Planning and Investment) in 2017, Vietnam’s GDP growth reached 6.81%, in which manufacturing and construction sectors (contributing 33.34%) were important elements contribute to the improvement in growth rate The index of industrial production has increased by 7.85%, of which the important contribution of manufacturing and processing industry has achieved growth rate of 14.5% (compared to 11.9% in 2016) Based on the master plan of Vietnam's industrial development to 2020, vision to 2030, Vietnam's industry continues to be an important field However, due to the influence of the world economy has not really recovered strongly after the crisis, manufacturing enterprises are facing many difficulties and challenges on the way of development such as competitiveness, improper use of resources, limited supply of raw materials In order to achieve efficiency in business operations - an important indicator reflecting the quality of business operations, reflecting the ability to use resources, managers need to make optimal decisions, limited possible risks Among the information system servin for optimal business decisions, it is necessary to mention information provided by the managerial accounting, which plays an important role in helping enterprises to enhance the sustainable development of production and business, reducing costs, lowering prices and improving product quality to contribute to an instable environment Recognizing the importance of MAPs in manufacturing enterprises in Vietnam, the author has selected the research topic: " Research (4) What are the recommended solutions to encourage the appropriate use of MAPs in manufacturing enterprises in Vietnam? Subjects and scope of research - Research subjects: the thesis focuses on the MAPs system, factors affecting the use of MAPs in manufacturing enterprises in Vietnam and the impact of using MAPs on effective performance in manufacturing enterprises in Vietnam - Research scope: The content: The author systematized the content of MAPs which was classified by functional groups, focused on analyzing factors as well as competition level, production technology, corporate culture and structure enterprise affecting the use MAPs in manufacturing enterprises in Vietnam, assess the impact of MAPs use on the effective performance The space: Medium and large sized manufacturing enterprises in Vietnam in processing and manufacturing industries focus mainly on three provinces in Hanoi, Quang Nam, Ho Chi Minh City (in addition to 13 provinces nearby Hanoi and Ho Chi Minh City), 100% Vietnamese capital The time: The study used the data in the period from 2015 to 2017 Methodology of the thesis To answer the research questions, the thesis was carried out in a throughout process and applied the combination of two qualitative and quantitative research methods Contributions of the thesis The thesis uses a combination of qualitative and quantitative research methods to answer the research questions, research has both theoretical and practical significance The new contributions on learning, reasoning: - Firstly, the thesis has studied the management accounting practices (MAPs) content based on the bisis of chassification by using on management accounting practices manufacturing Enterprises in Vietnam" to make a thesis in Research objectives The study was conducted with the general objective of studying the use of MAPs in manufacturing enterprises in Vietnamese To accomplish this goal, the author identified specific objectives as follows: (1) Assess the current status of MAPs use in managing and providing management accounting information in manufacturing enterprises in Vietnam (2) Develop a research model of factors affecting the use of MAPs and test the impact of each factor on using MAPs in manufacturing enterprises in Vietnam 3) Determine the affect the use of MAPs on the effecttive performance of manufacturing enterprises in Vietnam (4) Determine some solutions to use MAPs appropriately in manufacturing enterprises in Vietnam To achieve the research objectives, the author built the following questions: (1) How is the MAPs used in manufacturing enterprises in Vietnam? (2) What are the factors which affect to the use of MAPs in manufacturing enterprises in Vietnam? What is the direction and degree of the effect of each factor? (3) Does the use of MAPs have an impact on the effective performance in manufacturing enterprises in Vietnam? functional groups and indicated the application of MAPs in manufacturing enterprises including groups: Costing practice, Budgeting practice, decision support practice, performance evaluation practice and strategic analysis practice - Secondly, the thesis has studied the theoretical basis and established a research model of the factors affecting the use of MAPs in manufacturing enterprises such as competitiveness level, production technology, corporate culture, structure enterprise based on contingency theory, sociological theory - Thirdly, the thesis detemined the positive and significant relationship between the use of MAPs and the effective performance in manufacturing enterprises New contributions in terms of practice: - Firstly, the thesis provided information on the reality of using MAPs in manufacturing enterprises in Vietnam, as well the thesis used the method of analyzing linear structural equation modeling SEM in studying the relationship between the use of MAPs and the effective performance in the enterprises - Secondly, the thesis analyzed and assessed the level of positive influence of factors such as: competitiveness level, production technology, corporate culture, structure enterprise on the use of MAPs in manufacturing enterprises in Vietnam to improve the efficiency of production and business activities of Vietnamese manufacturing enterprises - Thirdly, the thesis proposes recommendation for state management agencies in creating legal corridors and operational mechanisms for enterprise in the management accounting fields, creating a motivation for reforminh corporate management Recommendation for manufacturing enterprises how to invest in modern equipment, improving revenue, total assets, raising awareness for business managers about the diversity as well as the usefulness of MAPs The thesis structure The thesis is based on research objectives to answer research questions, is structured into chapters as follows: Chapter 1: Overview of the research related to the thesis Chapter 2:Theoretical basis of the management accounting practices system in manufacturing enterprises Chapter 3: Research design and research methods Chapter 4: Research results Chapter 5: Discussion of the research results and recommending solutions to apply appropriately management accounting practices in manufacturing enterprises in Vietnam 7 CHAPTER 1: OVERVIEW OF THE RESEARCH RELATED TO THE THESIS 1.1 Overview of foreign researches Up to now, there have been many foreign researches related to management accounting in general, MAPs in particular both in terms of theory and practice as well Each study is in a different perspective to achieve the purpose of the study, below is an overview of some typical researches related to the research thesis: 1.1.1 The researches work on the use of management accounting practices 1.1.2 The studies of factors which influence the use of management accounting practices CHAPTER 2: THEORETICAL BASIS OF THE MANAGEMENT ACCOUNTING PRACTICES SYSTEM IN MANUFACTURING ENTERPRISES 2.1 Management accounting and management accounting practises system 2.1.1 General overview of management accounting 2.1.1.1 Development process of management accounting Management Accounting has been established and developed for a long time, according to the International Federation of Accountants (IFAC, 1998), management accounting in general and MAPs in particular has been developed in four stages 2.1.1.2 The management accounting concept In general, all the concepts which were given over time have changed from a narrow perspective of traditional management into high-level management activities including creating value Due to that change the author considered that management accounting is the process of defining, measuring, analyzing, interpreting and communicating information to provide financial information and information related to external factors as well as information nonfinancial and information created internally and promptly for managers, in order to make short-term and long-term decisions, allowing businesses to pursue the goal of creating added value 2.1.2 Management accounting practices system On the Chenhall and Langfield-Smith’s studies (1998); AbdelKader and Luther’s (2006); Ahmad’s (2012), the author summarized the MAPs by the five groups of practices: Costing system; Budgeting system; Decision Support system; performance valuation system and strategic analysis Specifically: 2.1.2.1 Costing practices group Cost classification is a tool to arrange different types of costs in the cost system into each group according to certain characteristics; to determine the costs of appropriate products, services or activities 1.1.3 The researches studied the relationship between the use of management accounting practices and business performance 1.2 Overview of domestic researches In Vietnam, management accounting has been really interested and used in recent years, so there are very few research materials which fully studied on the MAPs, this is a very new field for not only researchers but also Vietnamese enterprises as well, especially manufacturing enterprises in Vietnam, below are an overview of some typical researches related to research topics: 1.2.1 The researches work on the use of management accounting practices 1.2.2 The studies of factors which influence the use of management accounting practices 1.2.3 The researches studied the relationship between the use of management accounting practices and business performance 1.3 Conclusion drawn from an overview of researches related to the thesis 10 Include the following practices: job costing; process costing; Absorption costing; Variable costing; Activity based costing 2.1.2.2 Budgeting practices group According to Emmanuel, et al.,(1990), estimation is the most obvious use in providing information for controlling management; By setting performance standards and providing internal feedback on adjustment reports, accountants provide much of the basic information needed to master planning and overall control Budgeting system includes: Sale budgeting; Profit budgeting; Budgeting for controlling cost; Production budgeting; Cash budgeting; Budgeting for planning financial position; Annual budgeting; Flexible budgeting 2.1.2.3 Decision Support practices group Support decision practices is a tool that provides information to support business or organizational decision-making activities; Serving an organization's management, operation and planning and helping managers make decisions about issues that can change quickly and are not easily determined The system of decision support pracetices system emphasizes flexibility and adaptability to match changes in the environment and user decision-making approach Including: CVP analysis; Product profit analysis; NPV; IRR; TQM 2.1.2.4 Performance valuation practices group In the study of the author Emmanuel et al., (1990), performance valuation is a very important function in management accounting Performance valuation provides information to managers to support the organization's strategic goals (Jusoh and Parnell, 2008) The selection of measures to guide and evaluate the businesses performance is one of the most important challenges faced by organizations In general, both financial and non-financial measures are used to measure the effectiveness Including: Economic value added; ROI; Variance Analysis; Standard costs & variance anlysis; Return on investment; cash flow; Survey of customer satisfaction; Employee attitude 2.1.2.5 Strategic analysis practices group The last group of MAPs is strategic analysis Strategic analysis method is to use tools to provide, analyze financial information about the market of manufacturing enterprises and the cost of competitors, to use in development and monitoring strategic business of enterprises, especially the relative level of price, actual cost, volume, market share, cash flow and the required rate of the overall resources in the enterprise This method provides the financial information needed to monitor the current strategy or assist in developing strategies or in other words to support the successful construction of a competitive advantage for businesses Including the following methods: Target costing; Product life cycle analysis; Value chain analysis; Balanced score card; Just in time system 2.2 Factors affecting the use of accounting management practices 2.2.1 External factors The competition level The competition level in the market is defined as an organization competing with other organizations for products, services and prices in the external environment (Cadez and Guilding, 2008) Organizations often compete for resources such as competition for materials, sales and distribution channels, product quality and diversity, product prices (Gordon and Narayanan, 1984) 2.2.2 Businesses’ factors 2.2.2.1 Production technology According to Kennedy (2006), defined the manufacturing technology is a group of integrated hardware and software technologies, which are implemented, monitored and evaluated, which will help improve efficiency and productivity or supply a product, or provide service 11 12 According to the author, production technology is defined in a wide range of automated production systems of people, machines and tools are used to plan and control the production process including the purchase of raw materials and components and delivery / service / finished products Including computer-aided design (CAD) and technical systems, material resource planning systems, automated material handling systems, robots, flexible computer control systems, JIT, electronic data exchange and computer integrated production system 2.2.2.2 Corporate culture Corporate culture is an important concept in management Culture is defined as a characteristic set of souls and knowledge, which is the difference of membership of one group with another (Hofstede, 1980; Choe, 2004) Corporate culture is used to refer to "the values, beliefs, action methods widely shared" by the members of the organization and allow the creation of specific features of this organization, compared to other organizations 2.2.2.3 Enterprise structure Enterprise structure is defined in different ways in studies According to Macy and Arunachalam (1995, p 69): “The structure of the enterprise represents models and relationships that exist between the units of work and organization”; "Enterprise structure is a product that not only imposes a need for integration by complex technology but also applies the rationalization of applying appropriate structural models." 2.3 Efficiency of business performance and the impact of using accounting management practices on performance 2.3.1 Business’ Effective Performance Effective Performance of the organization is an important economic category in business activities of enterprises, understood in many different angles Based on the author's point of view, efficiency of performance is an economic category reflects the level of choice of using resources in the enterprise to achieve the target To measure the enterprises performance, it should be measured both financially and nonfinancially Referred to the assessment of financial performance, it is measured according to the following criteria: ROI, Gross profit, Revenue growth, Consumption revenue, Profit rate on revenue, Profit rate on total assets, Profit rate return on equity Based on the evaluation of non-financial performance, it is measured according to criteria such as: Quality of goods / services, Labor productivity, Customer satisfaction, Market share, develop new products / services, compare with competitors 2.3.2 Impact on the use of management accounting practices to effective performance According to the author, the evaluation of effective performance in enterprises is considered one of the most important and difficult tasks for most enterprises Therefore, using MAPs as a tool to provide accurate, timely information about the results of business operations, inspection, evaluation and service of management decisions of internal managers treatment in enterprises Administrators will be provided with complete information about the costs incurred and if exceeded, the administrator will find the cause and the necessary solutions Administrators who are personally responsible for the operation of departments and organizations to achieve the organization's goal in order to reduce costs, increase revenue, increase capital efficiency and will improve the enterprises performance 2.4 Some fundamental theories are related to thesis 2.4.1 Contingency theory 2.4.1.1 Content theory 2.4.1.2 Apply Contingency theory to research issues 2.4.2 Sociological theory 2.4.2.1 Content theory 2.4.2.2 Applying sociological theory to research issues 13 14 CHAPTER 3: RESEARCH DESIGN AND RESEARCH METHODS 3.1 Research design 3.2 Research model 3.3 Qualitative research methods In order to conduct qualitative research, the author conducted indepth interviews (Face to Face) on a narrow scale with experts (chief accountant, general accountant, director of the enterprise; Art) are those who have experience in choosing to use MAPs in some manufacturing enterprises To find more about the factors affecting MAPs use in Vietnamese manufacturing enterprises in Vietnamese, the author stratified is random sampling to ensure that all classes have an appropriate representation (Ghauri et al., 1995) through the stratification process This method allows results from small groups to be compared to ensure whether or not sample size differences affect the use of MAPs 3.4.1.3 Sample scale According to Hair et al., (1990), to conduct multivariate regression, the sample size must ensure the formula n≥8m + 50 (where n is the sample size, m is the number of independent variables in the research model) In this study, there are 10 independent variables, so the minimum sample size used for analysis is 130 To ensure sufficient observations are used in regression used the question: "According to your perspective, which factors are affected to the use MAPs in your enterprise? Why?" To study more about the impact of using MAPs on the performance of manufacturing enterprises in Vietnam, the author uses the question: " According to your perspective, you think there is any impact on the performance of your business when using MAPs in enterprises? How does it affect? Why" 3.4 Quantitative research methods 3.4.1 Data selection 3.4.1.1 Overall goal The overall goal identify information gathering to answer these research questions in the secondary industry of the processing and manufacturing industries 3.4.1.2 Sampling method To control the relative size of each sample, stratified sampling procedures will be used, since each sample of the different production sectors is considered to be heterogeneous The idea of analysis and represent the whole, according to calculations from the yearbook The 2017 statistic will conduct the survey on a scale of 750 enterprises (50% overall) in detail according to the industry code (Table 3.3) 3.4.2 Data collection This study conducted surveys to collect data from sending questionnaires (directly; via post; combining sending e-mails to enterprises with e-mail addresses) Questionnaires were built directly at the company (based on familiar relationships) or by post and combined questionnaires via Google form tool (for enterprises sending email by link: https://docs.google.com/forms/d/e/1FAIpQLSdeszfXmJdKp83vgesinrFpcXUVl2p8Urg6oYHyLLj59jXtw/viewform is a popular tool used in experimental accounting research 3.4.3 Building scale 3.4.3.1 Management Accounting practices 3.4.3.2 Factors affecting the use of MAPs 15 16 3.4.3.3 Effective performance of enterprises 3.4.4 Data analysis methods The structural model (SEM) is used as the main statistical technique for testing hypothetical models developed in this study (H1-H5) In addition, multi-group structure analysis techniques are used to test H6-H8 hypothesis 3.4.4.1 SEM structure model The SEM approach is chosen to answer question 2.3 (There are factors that affect the use of MAPs and the impact of using MAPs on business performance) and to test hypotheses from H1-H8 SEM is "a set of statistical techniques that allow the establishment of relationships between one or more independent, continuous or CHAPTER 4: RESEARCH RESULTS 4.1 Results of experimental research 4.1.1 Sample procedures and data collection 4.1.2 Data analysis 4.1.3 Discuss experimental research results 4.1.3.1 Management Accounting practices 4.1.3.2 The competition level 4.1.3.3 Production technology 4.1.3.4 Corporate culture 4.1.3.5 Business structure 4.1.3.6 Effective Performance 4.1.4 Conclusion and meaning for formal research discrete variables and one or more dependent or continuous or discrete variables examined" ( According to Tabachnick and Fidell, 2007 cited in Doan, 2012, p.89) 3.4.4.2 Data distribution and estimation techniques Before developing the SEM model, a number of tests need to be carried out with SEM assumptions -Test of reliability (Test for Reliability) of scale with Cronbach’Alpha coefficient: - Exploratory factor analysis - EFA: - Confirmatory factor analysis - CFA: 3.4.4.3 Multi-group structure analysis Multi-group structural analysis was selected to compare the research model by group of qualitative variables (such as the size of medium and large enterprises, the group of new and old operating periods, the group of materials production sectors and consumer goods ) 4.2 Official research results 4.2.1 Feedback results As shown in Table 4.8 (from Appendix 3), the majority of respondents are in textile and footwear production (32.5%); then in areas such as cement, construction materials (15.8%); Furniture (11.8%); Manufacturing food and beverages (9.6%); Pharmaceuticals and chemicals (6.6%); Manufacturing products from rubber and plasstic (6.1%); other manufacturing sectors (5.3%); Paper and printing production (4.8%); Electrical-electronic equipment products (4.4%); Machinery and engines (3.1%) 4.2.2 The result of using management accounting practices in manufacturing enterprises in Vietnam Table 4.10 summarizes the survey results on MAPs application rates in manufacturing enterprises in Vietnam In this table, the methods are listed in order of priority, from enterprises with the highest MAPs application rates to those with the lowest application 17 18 rates Overall, the average rate of applying MAPs in all surveyed enterprises and for all surveyed manufacturing sectors was 68.77% 4.2.3 Results of scale test 4.2.3.1 Results of verification of reliability of Cronbach’Alpha scales Through testing of scales on MAPs, the influencing factors and operational efficiency of enterprises show that all scales are suitable and reliable with statistical significance to use analysis in manufacturing enterprises in Vietnam 4.2.3.2 Scale test results by exploratory factor analysis (EFA) The results of the load coefficients of the factors, AVE and Crongbach’alpha All indicators are good (> 0.5) and the values of business scales is not different, so we use Sig value Equal Variances Assumed gives T-test sig value = 0.884>0.05 so there is no statistically significant difference in the use of MAPs by different sized enterprises - Operation time: According to the data presented in Appendix 5b, Sig = 0.657> 0, 05, the variance between the two operating time intervals is not different, so we use the value of sig.T- Test Equal Variances Assumed for T-test sig values = 0, 573> 0.05, so there is no statistically significant difference in MAPs use by enterprises with new and long-term operating times - Operation: According to the data presented in Appendix 5c, showing Sig = 0.710> 0.05, the variance between the two operating the observed variables are reliable and AVE is at the allowable threshold (Crongbach’alpha> 0.7; AVE> 0.5) 4.2.3.3 Scale test results by confirmatory factor analysis (CFA) a- Results of CFA test for MAPs The obtained CFA results have Chi-square / df = 2,259 values; GFI = 0.903; TLI = 0.952; CFI = 0,966; RMSEA = 0.075 These values showed that the scale of the MAP intermediate variable was basically consistent with market data b- Results of CFA test of scale for independent factors The obtained CFA results have Chi-square / df = 1,549 values; GFI = 0.906; TLI = 0.952; CFI = 0.959; RMSEA = 0.049 These values demonstrated the scale of competitive environmental factors, production technology, corporate culture and enterprise structure in line with market data c Impact of qualitative variables on the use of MAPs - Scale of business: According to the data presented in Appendix 5a, it shows that Sig = 0.844> 0.05, the variance between the two groups (production of raw materials supply and consumer goods) is not So we use the Sig value -test in Equal Variances Assumed for the T-test sig value = 0.137> 0.05 so there is no statistically significant difference in MAPs use by businesses different production In other words, it is not enough to confirm that there are differences between groups for dependent variables d- Results of CFA test of critical measurement model The critical model is a model in which potential variables are freely related to each other To test the differentiation of all potential variables, the author will use a Saturated model as shown in Figure 4.4, showing values like Chi-square / df = 1,376; GFI = 0.902; TLI = 0,922; CFI = 0,927; RMSEA = 0.041 These values show that the scale of critical theory is consistent with market data Thus, after the CFA test, the obtained results set the standard scale as a basis to conduct testing models and research hypotheses 4.2.3.4 Results of testing models and research hypotheses a- Results of testing the research model 19 20 Research model is used to determine the load factors of each potential variable Each potential variable is not directly observed, it is measured based on the number of scales (observed variables) obtained from the survey or other sources Six potential variables are built according to the proposed model: - The level of competition - Production technology - Corporate culture - Enterprise structure - MAPs - Performance The results showed that the values of Chi-square / df = 1,378; - According to the results presented in Table 4.26, the relationship between production technology and the use of MAPs is positive (standard regression weight β = 0.24; p