Exploring the Role of Strategic Management Accounting in Enhancing Organizational Performance: A Comprehensive Literature Review

Abstract

This dissertation explores the role of Strategic Management Accounting (SMA) in enhancing organizational performance through a comprehensive review of existing literature. SMA, which integrates financial and non-financial information with long-term strategic goals, is positioned as a critical tool for improving decision-making and maintaining competitive advantage. Key techniques such as Activity-Based Costing (ABC), the Balanced Scorecard (BSC), Target Costing, and Benchmarking are examined for their contributions to aligning management accounting with broader business strategies. The study identifies SMA’s potential to improve resource allocation, cost control, and performance measurement by linking accounting practices with strategic objectives. However, the successful implementation of SMA is challenged by factors such as complexity, high implementation costs, and resistance to cultural change within organizations. These barriers, especially prevalent in small and medium-sized enterprises (SMEs), underscore the importance of tailoring SMA techniques to specific organizational needs and fostering cross-functional collaboration. The dissertation also highlights gaps in the literature, particularly the under-exploration of SMA in service industries and its integration with emerging business trends such as sustainability and digital transformation. Recommendations are provided for practitioners on how to overcome implementation barriers, invest in data infrastructure, and integrate SMA into strategic planning processes. In conclusion, while SMA offers significant benefits for improving long-term competitiveness and decision-making, its effectiveness depends on the organization's ability to align SMA practices with strategic goals, adapt to evolving market conditions, and overcome operational and cultural challenges. The study suggests areas for further research, including the application of SMA in non- manufacturing industries and its role in supporting sustainability initiatives