Analysis of Management Accounting Function in Entrepreneurial Orientation Culture in Private Manufacturing Firms in Kenya

Rose Kerubo Nyanchama Mayianda


The researcher analysed the management accounting function and the entrepreneurial orientation culture in Kenya focusing on the private manufacturing sector firms in several part across the country. Entrepreneurship and the entrepreneurial culture are two inseparable terms and cannot be handled in isolation. It appears as if entrepreneurship has an important role to play in today’s society as globalization as well as environmental changes is increasing (Landstrom, 2009; Lovstal, 2011). Organizations confronted with fierce global complexity tend to regard entrepreneurship as a way of staying competitive and alert (Lovstal, 2011).  However most often researchers avoid the deeper side of this aspect due to its complexity and continuous growth and development which mark this sector of economy which is ever changing. Most entrepreneur businesses fail within the first three years and the others by the fifth year they are no more. Series of research has been done around this area but very few have been done in line with this area. Thus the objective of the study was to have an in-depth analysis of the impact of management accounting function on entrepreneurial orientation culture (performance) in Kenya specifically targeting private manufacturing firms. The study employed a pilot study alongside a longitudinal and cross sectional research design.  This design was considered appropriate as it enabled the researcher carry and an in-depth analysis of the variables which had not been realized, in spite of using a lot of resources in formulating them and this is because of the research designs and data types used. The sample was drawn from several manufacturing firms in Kenya. The method of sampling used was stratified random sampling and purposeful sampling to achieve desired representation from the selected organizations. The study used Secondary data and utilized inferential analysis using the E-views software of statistical analysis version 7. The study found out that strategic variance analysis which had an increase of 0.000231 for every one million units and communication technology with an increase of 0.000152 for every one million units affect entrepreneurial orientation culture positively as expected and confirms the previous studies, while investment which had a decrease of 0.000136 for every one million units and pricing decisions with an increase of 0.000203 for every one million units  give  mixed results on the same. The study findings on the mixed results was the variables depended on how firms treated these functions in their day to day running of the entities. The study concludes that management accounting plays a very important role in entrepreneurial culture and business growth though a number of enterprises do not practice this function or do not consider their components like pricing decisions and investment hence giving mixed results in their operations. Firms which take these variables (functions) into consideration in their operations more than often realize consistent growth path and are able to track their growth from period to period. The study recommends that firms from small and micro enterprises and corporate entities should embrace management accounting and its functions as an important tool of business growth rather than a terminology or a practice in corporate entities as a public relation instrument which SMEs shy away from.  The study recommends further research in public sector enterprises and non-manufacturing firms to establish the effect of these variables on entrepreneurial culture and other factors which this study may not have captured and could be key in explaining this relationship.

Keywords: Management Accounting function, Entrepreneurial Orientation Culture, Private Manufacturing Firms in Kenya.


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