Role Ambiguity as a Mediator of the Effect of Integrative Management Information on Managerial Performance: An Empirical Study in Australia

Given the increasing complexity and interdependence of managerial tasks in organizations in recent years, the role of integrative management accounting information (MAI) becomes very important for managerial performance. Integrative MAI provides managers with the information required for the effective coordination of interdependent sub-units within complex organizations. Very few studies, however, have examined the role of integrative MAI, particularly how it influences managerial performance. We hypothesized a direct effect based on information processing theory and an indirect effect with role ambiguity as a mediator, drawing on role theory. These hypotheses were tested using a sample of 108 managers from Australian manufacturing organizations who completed a mailed questionnaire containing measures of each of the variables in the study. Adopting a regression-based path analysis, as hypothesized we found a positive and direct link between integrative MAI and managerial performance and an indirect link between these two variables through role ambiguity. Implications arising from the study's results are addressed in addition to methodological issues relating to the measurement of MAI and managerial performance.IntroductionContemporary work environments, characterized by hyper-competition, change and technological complexity, and concomitant cross-functional interdependent work arrangements, have created the need for new forms of management accounting information to assist managers in decision making. It has been acknowledged for some time that traditional financial information internal to the organization with a past orientation can no longer suffice within this context (King et al., 199 1 ; Mia and Chenhall, 1994; Pierce and O'Dea, 2003). Responding to this challenge, researchers in the field of management accounting have explored the augmentation of management accounting systems (MAS) to include primarily external, non-financial, future oriented information (referred to as broad scope information), and to a lesser extent, aggregated, timely and integrated information (e.g., Bouwens and Abernethy, 2000; Chenhall and Morris, 1986; Chong and Eggleton, 2003; Gul and Chia, 1994; Mia and Chenhall, 1994; Sharma et al., 2006). A substantial part of this research has focussed on understanding contextual conditions where sophisticated MAS information is useful (Abernethy and Guthrie, 1 994; Bouwens and Abernethy, 2000; Chenhall and Morris, 1986; Fisher, 1996; Mangaliso, 1995; Mia and Goyal, 1991). Essentially, this research demonstrates that managers experiencing uncertainty and/or interdependencies use (or find useful) more sophisticated management accounting information, such as broad scope information. While earlier studies focussed solely on contextual conditions for management accounting information (e.g., Chenhall and Morris, 1986), more recent studies have explored the interactive influence of contextual conditions and MAI on performance (Abernethy and Guthrie, 1994; Agbejule, 2005; Chia, 1995; Chong, 1996; Chong 1998; Gul andChia, 1994; Mia and Chenhall, 1994; Tsui, 2001). While we are approaching an understanding of the contextual conditions appropriate for the implementation of sophisticated MAS, very few studies (e.g., Chong and Chong, 1997; Gerdin, 2005b; Mia, 1993) however, have attempted to understand how management accounting information leads to favourable performance outcomes.Against this background, our objective is to empirically examine the direct effect of the provision of integrative MAI on managerial performance, and consider possible indirect effects between integrative MAI and performance via role ambiguity. Integrative MAI was specifically selected for inclusion in the research model because firstly, it has received comparatively less attention than broad scope information and secondly, integrative MAI offers specific co-ordinating qualities likely to be particularly beneficial in the interdependent, uncertain work environments of today, as suggested above. …