Tóm tắt Luận án Factors impact to the implementing of management accounting in small and medium enterprises in Vietnam

1 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  TRAN NGOC HUNG FACTORS IMPACT TO THE IMPLEMENTING OF MANAGEMENT ACCOUNTING IN SMALL AND MEDIUM ENTERPRISES IN VIETNAM Major: Accounting Code: 62.34.03.01 SUMMARY OF DOCTORAL THESIS HO CHI MINH CITY, 2016 2 Thesis research was done at: University of Economics Ho Chi Minh City Professional advisor: 1. Dr. TRAN VAN THAO 2. Dr. DOAN NGOC QUE Critic 1: ................................................................................................................. Critic 2: ................................................................................................................. Critic 3: ................................................................................................................. This thesis will be presented to the Thesis Committee at University of Economics Ho Chi Minh City at , the day.. month . year 2016 Thesis is available at the library of the University of Economics Ho Chi Minh City 3 INTRODUCTION 1. Research problem During the global process of integration into “flat world” the traditional business environment have changed fast, become unpredictable with the participating of more and more powerful competitors (Friedman, 2005). However, the change not only brings the threats but also the chances for enterprises and economies. They have two choices: being eliminated or be changed to catch up the development. Changing in their structures, their business strategies, their management philosophy etc. make the enterprises adapt better with higher need from customers (Langfied-Smith et al., 2009). At the first stage of integration, Vietnamese enterprises, especially SMEs, had to face with new challenges and new opportunities. However, with some disadvantages such as small, being impossible to borrow from the support capital resources, hiring the low qualification labor force etc. the Vietnamese SMEs seem to have some disadvantages when competing with powerful competitors in the world such as multi-national groups. In addition, the Vietnamese enterprises are also not familiar with modern management techniques such as management accounting techniques. As the general terms when participating in WTO, ASEAN or recently signed the European Union – Vietnam FTA (EVFTA), there presents exciting opportunities in a multilateral trading partnership. But not only agreements slashed tariffs on nearly 99 percent of all Vietnamese exports to the EU, it also means measures have also been taken to ensure that the FTA stays updated in the face of future agreements on both sides, and take off almost tariff barriers. It makes the commercial exchanges become easier and more convenient, but it also means that the competition becomes more drastic. When business environment has been changed to catch up the global development, Vietnamese management should implement new management techniques such as management accounting techniques in order to increase their competitive advantages. But with the history of late conversion toward market economy, the management accounting subject just has been taught in Vietnam since beginning of 90 of 20 th century. So that almost of Vietnamese enterprises, especially SMEs, seems far from familiar with the use of management accounting. Through some recent preliminary surveys, we see that the use of management accounting in Vietnamese SMEs still have a lot of obstacles. And it leads to the result that when being interviewed, almost manages admitted that they feel reluctant in implementing management accounting techniques in their business management. Besides, the implementing of management accounting in Vietnamese SMEs are impacted by some factors such as size, culture, cost etc. So the study about which factors impact to the use of management accounting in Vietnamese SMEs will contribute greatly not only academic filed but also practical application among business communities. So that is the reason we chooses the subject as “Factors impact to the implementing of management accounting in small and medium enterprises in Vietnam”. 2. Research objectives and research questions 4 Thesis aims to identify and measure factors, which impact to the use of management accounting techniques in Vietnamese SMEs. The findings will be discussed to suggest some solutions in order to enhance the possibility of implementing management accounting techniques in Vietnamese SMEs. It will help Vietnamese SMEs improve their competitive capability in the flat world as the trend of globalization. To achieve the objectives, there are two questions being raised as below: Question No.1: The current implementing of management accounting in Vietnamese SMEs? Question No. 2: Which factors impact to the implementing of management accounting in Vietnamese SMEs? How measurement is their impacts? 3. Research objects The thesis researches the Vietnamese SMEs who had implemented, had been implementing or intend to implement management accounting techniques. Throughout these subjects, we will identify and measure factors, which impact the implementing of management accounting in Vietnamese SMEs. 4. Scope of research Even there are so many factors, which can impact to the use of management accounting techniques in SMEs in the world, but we focuses on some specific factors, which seem appropriate with Vietnamese economy characteristics. In addition, due to the limitation of time and recourses, we just focus the locals including Hochiminh City, Hanoi and other provinces nearby, some small provinces in Middle etc. This sample will help to diversify the different corporate cultures, size, qualification of labor force etc. The time to conduct the surveys is from January to December of 2015. 5. Research methodology Thesis concurrently uses qualitative and quantitative research. Content of the methodology shall be presented in more detail in chapter 3 of this summary. 6. Contribution of the thesis The research results of the thesis have contributed at a certain level to theoretical and practical aspects of public sector accounting include: (1) Academic contribution: By summarizing cases of the implementing of management accounting in small and medium enterprises in the world and in Asian area, and from these cases there are some lessons will be learned for the use of management accounting in Vietnam. Based on some research models in the prior researches, we have collected some factors, which are considered to be appropriate with Vietnamese SMEs characteristics. After discussion with experts through deep interviews, there are some new factors are added and measured with the results showing that these factors having significant impact on the use of management accounting in Vietnamese SMEs. And this result should be a reliable source of reference for related researches in coming future. 5 (2) Practical contribution: By using quantitative methodology, we have identified and measured factors, which impact to the use of management accounting in small and medium enterprises in Vietnam. Through the findings, results have been discussed and recommendations have been suggested to contribute some comprehensive solutions to increase the possibility of the use of management accounting in small and medium enterprises in Vietnam. 7. Structure of thesis The thesis includes 5 chapters in addition to introduction and appendix:  Chapter 1: Overview of the use management accounting and issues related to  Chapter 2: Theoretical foundations of management accounting and factors impact to the use of management accounting  Chapter 3: Research methodology  Chapter 4: Findings and discussion  Chapter 5: Conclusions and recommendations CHAPTER 1- LITERATURE REVIEW AND KEY RESEARCH AREA 1.1. OVERSEA KEY RESEARCHES 1.1.1. Overview Small and medium-sized enterprises (SMEs) play the vital role of the business population in most countries in the world therefore they constitute a vital force in modern information-based economies. Anyway, it was considered that there was a lack of study about management accounting practice in SMEs (Marriott & Marriott, 2000; Mitchell & Reid, 2000). These key researches concerning to this issue can be summarized as below: - The first one, there were researches about the changes and the cause leading to changes of management accounting throughout the development stages. - The second one, there were researches about the use of management accounting practices in SMEs. - The third one, there were researches about the factor which can impact to the use of management accounting practices in SMEs. 1.1.2. Consideration By summarizing the prior related researches in the world, we has summarized the trend and the process of management accounting from beginning to now: implementing traditional simple management accounting techniques at beginning stage to the complicated system nowadays; the change of management accounting in order to meet the diversified requirement of enterprises; the reasons leading to the change of management accounting. Besides, at early stage researches had not paid much attention on implementing management accounting in SMEs, but nowadays they begin to focus on researching the use of management accounting on SMEs in both of developed and 6 developing countries, because of strong globalization, increasing global competition and flatting- world process. The prior researches, by both of qualitative and quantitative methods, have shown how complicated the management accounting systems were, which kind of management accounting techniques, which factors impact to the use of management accounting in enterprises. 1.2. 1.1. KEY RESEARCHES IN VIETNAM 1.2.1. Overview Almost researches about the use of management accounting in Vietnamese enterprises, including SMEs, in the stage of 1997 to 2010 concluded that Vietnamese enterprises had not paid enough attention on implementing management accounting techniques. And in some cases, they really do not have a concept about management accounting practices, and almost of them had not had an independent management accounting segment (Pham Van Dưoc, 1997; Tran Anh Hoa, 2003; Pham Ngoc Toan, 2010). 1.2.2. Consideration In Vietnam, the management accounting had been taught since 90s of 20 th century and there have been some prior researches such as: + Research about the direction about implementation and building the management accounting in Vietnamese enterprises. + Analyzed and suggested the model of management accounting for different kind of Vietnamese enterprises such as manufacturing enterprises, commercial enterprises, for different size etc. Anyway, until now in Vietnam there had been lack of researches about the use of management accounting in SMEs but only in medium and large enterprises. On other hand, almost of researches concerning about the use of management accounting in Vietnamese SMEs had tended to use the qualitative method, so the recommendations still have some limitation due to the practical implication. 1.3. GAP RESEARCH AND THE AIM OF STUDY 1.3.1. Determining the gap research By synthesizing and considering prior researches in Vietnam and in the world, we have considered that the implementing management accounting in Vietnamese SMEs plays a vital role in the successful management. It should contribute to enhance the capable management in Vietnamese SMEs, but in fact the rate of practical use of management accounting in Vietnamese SMEs is still very low, especially for small and very small enterprises. Nowadays in Vietnam there had been some researches about the use of management accounting in SMEs but not use the quantitative and objective methods, so the recommendations still have some limitation due to subjective thinking basing on viewpoint and experiences of researchers. 1.3.2. The aim of study By determining the gap research above, we inherit and conduct the research about the factors impact to the use of management accounting in Vietnamese SMEs. In addition, the study will measure by 7 reliable methods about the level of impact of each factor. The study will be conducted with steps as below: 1 st step: conducting research about current situation of the use of management accounting in Vietnamese SMEs. 2 nd step: surveying and synthesizing factors impact to the use of management accounting in Vietnamese SMEs. 3 rd step: measuring the level of impact of factors mentioned above. 4 th step: recommendations and suggestions will be made to enhance the possibility of the use of management accounting in Vietnamese SMEs. CONCLUSION OF CHAPTER 1  CHAPTER 2 - THEORETICAL FOUNDATIONS ABOUT MANAGEMENT ACCOUNTING AND FACTORS IMPACT TO THE USE OF MANAGEMENT ACCOUNTING IN SMEs 2.1. MANAGEMENT ACCOUNTING OVERVIEW 2.1.1. Management accounting concepts The evolution of management accounting will now be explored in terms of the changing definitions from three major accounting bodies: The Institute of Management Accountants (IMA); the Chartered Institute of Management Accounting (CIMA); and the International Federation of Accountants (IFAC). In 1981, the Institute of Management Accountants (IMA) has provided his initial definitions of management accounting that reflect changing demands by businesses for accounting information; but more recently, IMA has redefined management accounting as “ a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy” (Anthony A.Atkinson et al., 2012). The new definitions had reflected the change in the role of management accountants evolving from a transaction and compliance orientation (as reflected in the prior definition) to one of a strategic business partner that helps the organizations incorporate performance management, planning and budgeting; corporate governance processes, risk management, internal control, and financial reporting at a time of great change; and experts in cost management methods (IMA, 2008). In 1986, the Chartered Institute of Management Accounting (CIMA) had just declared his definition of management accounting as the provision of information required by management for such purposes as: the formulation of policies; planning and controlling activities of the enterprise; decision taking on alternative courses of action; disclosure to those external to the entity (shareholders and others); disclosure to employees; and safeguarding assets (CIMA, 1986). Later, in process of CIMA’s revised version of management accounting terminology, the role of management accounting had moved 8 forward to a broader one. CIMA had redefined management accounting as the application of the principles of accounting and financial management to create, protect, preserve and increase value for the stakeholders of for- profit and non-profit enterprises in the public and private sectors. CIMA (2005) further elaborated the definition of management accounting to emphasize that management accounting is an integral part of management, which requires the identification, generation, presentation, interpretation and use of relevant information. CIMA’s changed definitions show that management accounting has moved closer to senior management concerns with a focus on efficiency, strategic planning and value creation. And now since 2015, the new definition about management account of CIMA is only simple as “Management accounting combines accounting, finance and management with the leading edge techniques needed to drive successful businesses” (CIMA, 2015). In 1989, IFAC defined management accounting as “ the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of information (both financial and operating) used by management to plan, evaluate, and control within an organization and to assure use of and accountability for its resources ” (IFAC, 1989). This definition was similar to the one defined by IMA. However, only nine years later the scope had widened considerably in new definition, in which management accounting was viewed as an activity that is interwoven in the management processes of all organizations. Management accounting refers to that part of the management process, which is focused on adding value to organizations by attaining the effective use of resources by people, in dynamic and competitive contexts. And till to 2002, management accounting was redefined as “refers to the process and techniques that focus on effective and efficient use of organizational resources, to support managers in their task of enhancing both customer value and shareholder value” (Langfield-Smith et al., 2009, 6). According to Vietnamese Accounting Law issued in 2003, management accounting is defined as “collecting, handling, analyzing and providing information about economic, finance according to required management/making decision within internal enterprises” (Vietnamese Accounting Law issued, 2003). 2.1.2. The role and function of management accounting Nowadays, management accounting plays a vital role in management. According to IFAC, the role of management accounting plays as a part, which is impossible to take part from process of management. It provides essential information to control enterprise’s present activities, defines strategy and tactical plans, maximizes the use of resources, measures and evaluate performances etc. (IFAC, 1999). Almost theories of management accounting mentioned about planning, controlling, and performance evaluating, improving and deploying competitive strategy, making decision etc. were major role of management accounting in order to obtain the enterprise’s objectives (Scapens, 1991; Weetman, 1999; Upchurch, 1998; Atkinson &ctg., 2001). And according to Ernst & Young and IMA management accountants were considered to become business partners, not as bookkeepers anymore 9 like before, and they focused to more and more about main strategy, reaching out of financial accounting (Ernst & Young and IMA, 2003). Recently, in their research about modern management accounting, Valančienė and Gimžauskienė (2007) studied the changes in the role of management accounting. Their conclusion indicated that the role of modern management accounting has extended from data accumulation to providing information as to the progress of strategy implementation. And as a result, the role of management accounting has changed focus from being just directed toward shareholders to delivering customer- employee-shareholder integrated solutions. Those solutions are focused on permanent monitoring, measurement and management of strategic advantages and future outcomes (translation of strategy into appropriate set of goals and measures, strategy mapping). 2.1.3. Content of management accounting Management accounting system is information system, which provides information to enhance making decisions for creating value and controlling resources. It helps to make a comprehensive information system including regular information and special information for evaluating, measuring, planning and controlling one or more specific product or service. So management accounting system is impossible to provide all kind of information management, instead of, some kinds of information must be gone seeking advisory from out