structure, formality and the importance of financial and non-financial information in strategy...

Structure, formality and the importance of financial and non-financial information in strategy
development and implementation
Alnoor Bhimani a,∗, Kim Langfield-Smith b
a London School of Economics and Political Science, London, United Kingdom b Department of Accounting and Finance, Monash University, Vic. 3800, Australia
Abstract
The strategic management literature indicates that there is high variety in the form and nature of strategic pro-
cesses within organizations. By contrast, writers on strategic accounting tend focus on the structure and formality
of strategic activities and call for a balance of financial and non-financial information to support strategic processes.
This study explores the conceptual basis for this perspective and also investigates empirically whether such char-
acterisations hold in practice. The empirical part of the study draws on questionnaire responses by senior corporate
accountants and interviews held with a subset of respondents from this group. The results indicate that strategy
development and implementation activities tend to be structured and formal, and while greater emphasis is placed
on financial information in strategy implementation, in strategy development both financial and non-financial infor-
mation are used. Differences however prevail across firms as to what is considered to be strategic and the role
played by financial and non-financial information varies across companies. A high degree of organization speci-
ficity also exists in the uses of strategic accounting information. The study found support for normative ideals within
the firms investigated but high organizational particularity also pervades the deployment of strategic accounting
information.
implementation
∗ Corresponding author. Tel.: +44 20 7955 7329; fax: +44 20 7955 7420. E-mail address: [email protected] (A. Bhimani).
1044-5005/$ – see front matter © 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.mar.2006.06.005

4 A. Bhimani, K. Langfield-Smith / Management Accounting Research 18 (2007) 3–31
1. Introduction
While different characterisations of strategy and strategic processes have been proposed by strategy researchers (Andrews, 1987; Hart, 1992; Hitt and Tyler, 1991; Johnson and Scholes, 1999; Mintzberg, 1987; Whittington, 1993), it seems that management accounting researchers have appealed to only a sub-
set of this strategic management research knowledge base to explore issues relating to the management accounting system and strategy interface. Normative and empirical management accounting research has
largely adopted a rational perspective, often assuming that strategy development and strategy implementation are formal structured processes, relying on a mix of financial and non-financial information to support strategic action (Bromwich, 1990; Kaplan and Norton, 2001; McNair et al., 1990; Nyamori et al.,
2001; Palmer, 1992; Wilson, 1995). The aim of this paper is to investigate whether strategy development and implementation activities used in practice are formal structured processes, and whether financial and non-financial information are of equal importance across strategy development and implementation activ-
ities. This will be undertaken through a literature review that explores the partial integration of strategic management accounting into empirical management accounting research followed by a questionnaire and interviews with senior corporate accountants of large UK-based companies.
Many academic studies concerned with the use and the structuring of financial and non-financial information have focused largely on identifying dimensions of performance measurement (CIMA, 1993;
Chenhall, 1997; Coates et al., 1996; Govindarajan and Gupta, 1984, 1985; Ittner and Larcker, 1995, 1997; Ittner et al., 1997; Perera et al., 1997). A number of studies have specifically considered the extent to which non-financial measures are strategically linked and how they connect to performance targets
(Banker et al., 1993, 2004; Ittner and Larcker, 1998) and others have focussed on how measures that are strategy linked versus those that are common across business units affect performance evaluation (Banker et al., 2004; Lipe and Salterio, 2000). The intent of the present investigation departs from these
prior studies by focusing on the associations between information type (financial and non-financial) and strategy development and implementation. Such research is scant. Yet, it raises important issues. The
suggestion has been made that a strategic dialogue can be relevant to the formulation of strategy and strategic control (Boyd, 1991; Norreklit, 2001; Picken and Dess, 1997). Evidence exists that information in different forms can influence strategy development and implementation activities, just as it can aid
in the evaluation of strategic action (Kershaw, 2001; Lorange and Scott Morton, 1974; Lorange et al., 1986). The role of financial and non-financial information in particular can extend to both interactive and diagnostic processes (Simons, 1995, p. 200). Some investigations are strongly indicative of information
type having a bearing not only on strategy implementation and control activities but also on strategy development (Chenhall and Langfield-Smith, 1998; Coates et al., 1992; Euske et al., 1993; Ittner et al.,
2003; Vaivio, 1999; de Haas and Kleingold, 1999; Preble, 1992). Assessing the appropriate information mix to monitor the achievement of strategic intent is a relevant line of inquiry, but it is also important to understand the associations between information type and the development and implementation of
strategy. The motivation for the study derives from the schism between normative claims about the potential
of strategic analysis and descriptive narratives of organizational strategic processes. Normative models
tend to presume strategy development and implementation as rational technical endeavours entailing the formulation of structured and formal statements of intent and the application of predefined instrumental

A. Bhimani, K. Langfield-Smith / Management Accounting Research 18 (2007) 3–31 5
and linear structuring, whereby choice making between alternatives and control processes can be aided
through properly constructed accounting information. In contrast, some accounting scholars have called for caution to be exercised in the search for ways in which relationships can be forged between strategy and accounting in attempts to make accounting more strategically oriented.
The managerial bias adhered to within much of the prescriptive management accounting research in this area rests on the assumption that organizations are purposeful rational systems that are internally
consistent. However, this has been met with scepticism by some scholars who see strategic management concerns as highly complex and relatively unstructured (Archer and Otley, 1991; Coad, 1996). The interplay between strategic pursuits and accounting information production and use is viewed as being
influenced by a diversity of contextual, organizational, political and environmental factors (Dent, 1991; Ezzamel et al., 1997; Mouritsen, 1999; Puolamaki, 2004). Conscious strategising is seen to enhance interactions between different functional managers leading to more rather than less diffusiveness in
strategy formation (Andrews, 1987; Hickson, 1987; Jonsson and Gronlund, 1988). Notions of the partially conscious, multi-level and poly-rational nature of strategy formation based on empirical descriptive
studies have generally been antithetical to ideals espoused within prescriptive strategy related accounting writings. Warnings have been sounded against the normative view that suggests strategic management decision processes and choice are sequential and rational in nature, and relatively unproblematic and
linearly structured (Coad, 1996; Hoque and Alam, 1999; Langfield-Smith, 1997; Lord, 1996). Empirical investigations of strategic processes point to diffuse and inchoate relationships between
accounting and strategy (Roslender and Hart, 2003). They emphasise the relevance of considering certain
contextual elements of organizational processes and the contingencies at play which shape strategic organizational action and accounting practices (Jonsson and Gronlund, 1988). The proactive and sequential
logic assumed of prescriptive strategic orientations to management accounting is viewed by these writers as being simplistic and inadequate given the dynamic flux constituting organizational life. Dent (1990) considers descriptive writings on strategy from the longer established strategic management literature as
usefully extending our appreciation of strategic decision-making beyond the partiality of the mechanis- tic imagery of strategic activities portrayed in the prescriptive strategic accounting literature. He warns that “we should be cautious and selective in our use of strategic theory to inform accounting research”
(Dent, 1990, p. 21). But the argument has also been made that interrelationships between functionalist and interpretive perspectives on accounting generally need to be more deeply understood so as not to
uphold a polarised perspective in guiding one’s research enterprise (Ahrens and Chapman, 2005). In the context of the above noted normative-descriptive schism, the present investigation finds moti-
vation in exploring the possible existence of a similar dichotomy between what is advocated in the
prescriptive strategic accounting literature and what is prioritised in practice. If conceptions of strategy processes condition calls for strategy-based accounting information, then the basis for this literature and the issue of whether such information conforms to corporate perceptions of strategic processes in practice
is worthy of investigation. In this light, the paper seeks to make two distinct but interdependent contributions. First, it explores
the partial integration into strategy-focused accounting writings of models drawn from the strategic
management literature. The paper develops arguments about what is surmised within advocated strategic accounting ideals as to formality and structure of strategic processes and the importance of financial

and interviews held with senior accounting managers. This second part of the study also explores the
desirability for balance in the use of financial and non-financial information in strategy development and implementation in these firms.
The paper is structured as follows. In the next section, the strategic management literature is discussed
prior to considering assumptions made within strategic management accounting writings about strategy development and implementation. In the subsequent part of the paper, the methodology for the empirical
portion of the study is outlined. Section5 discusses the questionnaire and interview results.The concluding section of the paper considers the study’s broader implications and points to further potentially useful research which may be carried out in the area.
2. The strategic management literature
To assess the perspective adopted in the accounting literature concerning the role of information in firms’ strategic activities, it is essential to consider the distinction between prescriptive and descriptive
notions of strategy as found in the strategic management literature. The prescriptive strategy literature considers strategy as a formalised statement of intent or plan which
identifies objectives and intended actions. Organizations are assumed to engage in strategic choice making in an economically rational manner within the constraints of limited information, cognitive biases and causal ambiguity (Amit and Schoemaker, 1993; Barney, 1992; Ginsberg, 1994; Peteraf, 1993; Phelan
and Lewin, 2000; Reed and De Fillippi, 1990). Strategy is seen as consciously identified, proactive and formulated prior to decisions and actions.
This prescriptive view of strategy finds early expression in the writings of Ansoff (1965), Penrose
(1959) and Steiner (1969) and has continued to be developed and refined in the works of more recent strategy theorists. Porter (1980, 1985), for example, views strategy as the positioning of the firm within its competitive environment, and prioritises building sustainable competitive advantage as a way of shielding
the enterprise against competitive forces. He develops several tools for analysing and determining a firm’s position in competitive markets including the diamond of industry attractiveness, generic strategies and
value chain analysis (Porter, 1996). Porter argues thatfirms should build sustainable competitive advantage by consciously choosing a specific strategic position, developing unique activities and determining how they fit within a “chain” of value-adding activities (Porter, 1996, 2001). He delineates these strategic
positions using a generic typological framework. Porter’s framework has been extended by Grant (1996), for example, who links Porter’s concepts
of industry forces and competitive advantage to different facets of firms. Others describe how a firm’s
competitive advantage is based on its non-marketable strategic resources, assets and capabilities (Cool and Dierickx, 1994). Rather than focusing on the competitive product markets, imperfections in markets
have also been viewed as leading to sustainable competitive advantage where a firm’s strategy focuses on developing dynamic capabilities to ensure future competitiveness (Barney, 1986; Peteraf, 1993; Peteraf and Salancik, 1978; Prahalad and Hamel, 1990). Strategic thinking underpins rational economic propen-
sities concerning resource distribution decisions and organizational conduct and outcomes (Oliver, 1997; Sabherwal and King, 1992; Teece and Pisano, 1994).
Prescriptive conceptions of strategy presuppose the deployment of formal management information

tion that is purposively and formally prepared. As such, prescriptive conceptions of strategic processes
assume a largely predictable and determinate environment in which organizations can identify internal and external strategic opportunities and threats proactively without negating the possibility of strategic innovation (Barney, 1986; Mahoney and Pandian, 1992; Schoemaker and Amit, 1994). They assume that
managers formally analyse competitive forces and purposively assess resource allocations and utilisation as part of strategy development. Formal information systems would enable such analysis. The imple-
mentation of strategies would likewise entail extensive analysis of economic, quantitative and qualitative information. Ultimately, seeking to achieve sustainable competitive advantage is seen as an outcome of discretionary managerial choices and strategic resource accumulation and use, which is dependent on the
output and deployment of effectively designed management information systems (Conner, 1991; Grant, 1996).
Prescriptive views within strategy writings exist alongside descriptive and explanatory expositions
of firm structures and activities. Descriptive views of strategy see a role for interactions between management, employees and the environment where strategic processes are considered to be complex and
to exist in a state of flux with consequences that sometimes depart from those that may have been ini- tially planned. Strategy is regarded as organizationally grounded and decision-making processes and implementation are considered to be complex, dynamic and multi-faceted (Smircich and Stubbart, 1985).
Organizational activities are taken to be shaped by diverse interests including enterprise specific forces as well as institutional pressures (Quinn, 1978, 1980). Strategies are not necessarily viewed as being developed top down and new patterns of action are considered to emerge in a diffused manner partly
through grass root decision-making (Mintzberg and McHugh, 1995). The task for managers within this perspective is to create a context for strategy formation and to detect patterns that emerge and help them
take shape (Mintzberg, 1979). A balance is sought between thought and action, control and learning, and stability and change. Information sources are diverse and not necessarily derived from formalised systems. Communication of information affecting strategic processes is non-uniform and information
form and exchange can be highly unstructured (Goold and Quinn, 1990). Mintzberg (1987) presents a view of different interrelated and complementary definitions of strategy
which are organization-specific (Andrews, 1987; Mintzberg and Quinn, 1991). Mintzberg (1979, 1982,
1987, 1994) distinguishes between deliberate strategies which arise from defined intentions of organizational actors and culminate in planned results, while emergent strategies are devoid of express intentions
by the enterprise. However, in many organizations strategies may fall between these two extremes (Lord, 1996).
While the strategic management literature evidences different degrees of the problematisation of strate-
gic activities within the enterprise (Miller, 1992), writings on strategic aspects of accounting have tended to adopt a more one-sided view. This is discussed below.
3. Strategy and management accounting
The literature addressing the links between strategy and management accounting systems is relatively recent, emerging only since the 1980s (Langfield-Smith, 2005). While reviews of the accounting-strategy literature have been presented elsewhere (see Chenhall, 2005; Langfield-Smith, 2005; Nyamori et al.,

Some accounting commentators have noted that the interplay between strategic action and accounting
practice needs to be understood in terms that are reflective of the complexity of organizational uncertain- ties and social processes which condition their relationships (Archer and Otley, 1991; Burns and Vaivio, 2001; Granlund, 2001; Hoque and Alam, 1999; Hopwood, 2000; Lord, 1996; Mouritsen, 1999; Roberts,
1990; Roslender, 1995; Tomlinson, 1990). Here decision-making activities and managerial action are seen as dynamic, multi-level and context-specific rather than planned, structured and sequential. How-
ever, generally, management accounting writings have tended to adopt a less problematic and largely normative view of strategy. Many practitioner-oriented and educational writings on strategic aspects of accounting (Kaplan and Norton, 2004; Ward, 1993; Wilson, 1995, 1999) regard strategy in deterministic
and rationalistic terms and present accounting prescriptions designed to support corporate strategic pursuits. A key focus is on information deployment (Brouthers and Roozen, 1999; Dixon and Smith, 1993) and there is a presumption that non-financial information is needed to capture the decision relevance of
strategic options alongside established financial information analyses. The term strategic management accounting (SMA) first appeared in the prescriptive accounting lit-
erature two decades ago (Simmonds, 1981). The literature concerning SMA has been slow to evolve. According to Tomkins and Carr (1996, p. 165): “there are no more than about 20 key articles on the subject in mainstream academic journals”, and more recently, Roslender and Hart (2003, p. 255) noted that
“there is still little or no agreement about what constitutes strategic management accounting”. Whereas scholarly interest in SMA has been muted, there are studies which indicate that senior accounting officers within organizations play a growing role in the provision of information for strategic decision-making
(Bhimani and Keshtvarz, 1999) and that they are increasingly engaged in strategic corporate activities (Guilding et al., 2000; Guilding and McManus, 2002). Otley (2001, p. 245) has also remarked that strategic
management accounting has had “a major impact on the thinking of practicing management accountants”. Within the SMA literature, strategy development and implementation are viewed as formal endeavours
to which strategically oriented management accounting practices can contribute. Palmer (1992) suggests
that the task of integrating the SMA system into organizational strategic management processes places the onus upon management accountants to identify the organization’s strategic orientation and to prepare the necessary supportive decision-making information.Simmonds (1981, 1982) supports this view suggesting
that SMA should seek to promote management accounting information which relates to such factors as competitive position, pricing, costs and volume. Knowledge about competitors is considered to enable
managerial decisions which take account of possible competitor responses. In making a case for SMA, Bromwich (1990, p. 28) defined the field as:
The provision and analysis of financial information on the firm’s product markets and competitors’
costs and cost structures and the monitoring of the enterprises strategies and those of its competitors in these markets over a number of periods.
Bromwich situates SMA explicitly within Porter’s (1980) model of competitive positioning by considering the benefits which products offer customers and how these contribute to building and sustaining competitive advantage. Such information becomes an input into the formulation and operationalisation
of strategy. He places particular significance on the relevance of financial information in developing long-term forward looking competitive knowledge and balancing this with non-financial information concerning an enterprise’s strategic endeavours.

petitive advantage. Under their “strategic cost management” approach, value chain analysis, cost driver
analysis and competitive advantage analysis using accounting information inputs is recommended as supporting more strategically appropriate decisions compared to more conventional management accounting approaches. Shank (1996) f urther demonstrates the manner in which aspects of strategic cost manage-
ment need inter-linking financial and non-financial information to enable a comprehensive and balanced assessment of strategic issues of import.
Other management accounting perspectives which appeal to a prescriptive strategic frame of ref- erence developed by strategy theorists include life-cycle based strategic accounting (Wilson, 1995), target and kaizen costing (Cooper and Slagmulder, 1997; Tanaka, 1993; Yoshikawa et al., 1995),
interactive management controls (Simons, 1995), the balanced scorecard (Kaplan and Norton, 1992, 1996, 2001), activity-based management systems (Kaplan and Cooper, 1998), quality costing (Tayles et al., 1996), inter-organizational cost management (Cooper and Slagmulder, 2004) and customer and
competitor focused analysis (Donelan and Kaplan, 1998; Foster and Gupta, 1994; Moon and Bates, 1993; Rickwood et al., 1990). A theme common to these accounting approaches and other related
SMA writings (Bruggeman and Slagmulder, 1995; Drury and Tayles, 1995; Drury and McWatters, 1998; Emore and Ness, 1991; Innes, 1999; Kawada and Johnson, 1993; Libby and Waterhouse, 1996; MacArthur, 1996; Nanni et al., 1992) is that they rely on the examination of structured data relating
to competitive advantage and changes in the firm’s external environment and uphold balance between financial and non-financial measures in the formulation of strategy and the control of corporate strategic activities.
In summary, the prescriptive SMA literature has presumed strategic activities to be largely formal and structured and has advocated the balanced deployment of financial and non-financial information
in the development and implementation of strategy. The scholarly conceptions of strategic management that view strategy development and implementation as emergent, unstructured and in continual flux have only selectively been integrated within the SMA literature. A question for this investi-
gation is whether strategy development and implementation activities in practice are structured and formal, and whether financial and non-financial information are equally important across strategy development and implementation activities. To empirically assess this, the following propositions are
presented:
P1: Strategy development and implementation tend to be structured and formal, rather than unstructured
and informal. P2: Financial information is as important as non-financial information for strategy development. P3: Financial information is as important as non-financial information for strategy implementation.
The next section of the paper presents the method used to test these propositions.
4. Research method
The data for this research is derived from questionnaire responses and interviews undertaken with a subset of questionnaire respondents. The questionnaire focused on the degree of formality and structure of the strategy development and implementation as well as the importance of financial and non-financial

Table 1
Descriptive statistics
Mean Standard
Q1: Formality/structure in strategy development and implementationa 2.3725 0.720 1–4 1–5
Q2a: Financial information for strategic developmentb 4.1961 0.693 2–5 1–5
Q2b: Non-financial information for strategy developmentb 4.1765 0.654 3–5 1–5
Q3a: Financial information for strategy implementationb 4.6863 0.583 2–5 1–5
Q3b Non-financial information for strategy implementationb 4.2400 0.716 3–5 1–5
a A low score indicated more formality and structure. b A low score indicated low importance.
4.1. Sample selection
The target population comprised the most senior accounting officers within large UK firms (those employing more than 4000 employees). Respondent’s names and addresses and key company statistics
were obtained from the Financial Analysis Made Easy (FAME) database. The database contains contact details, industry classifications, holdings, parent companies, financial figures and employee numbers. The FAME database does not provide names of chief accounting officers, so these were identified from The
Directory of Directors, the Macmillan Stock Exchange Yearbook or by telephone calls.
4.2. Questionnaire administration and response rates
To achieve a sufficiently high response rate the questionnaire was kept succinct (one double-sided sheet) and consisted of three scaled question and an open-ended question.
The first question asked the extent to which strategy development and implementation was struc-
tured and formal. This was scaled 1 (entirely structured and formal), 2 (significantly but not entirely structured and formal), 3 (equally structured and formal as unstructured and informal), 4 (significantly
but not entirely unstructured and informal) and 5 (entirely unstructured and informal). The second and third questions asked respondent to indicate the importance of financial and non-financial information
in strategy development and in strategy implementation. These were scaled from 1 to 5 (very low to
very high). Descriptive statistics for these questions are provided in Table 1. The fourth question allowed respondents to describe how strategy development and strategy implementation took place in their organization and whether accounting-based information contributed to these processes. At the end of the
questionnaire, respondents were asked to indicate whether they would be willing to participate in the interview phase. The survey instrument was pilot tested with four academics and accountants working in
10 firms who were not included in the final sample. This did not result in any changes being made to the questionnaire.
The questionnaires were sent with cover letters and self-addressed envelopes to the senior accounting
officers in 167 large UK firms. After a four-week period, 25% of the survey population responded (42 replies). Of these, 11 companies stated that it was against their policy to respond to research questionnaires. A second mailing of the questionnaire resulted in 4 more refusals and 20 additional completed
questionnaires. Overall 51 usable questionnaires were returned. Respondent organizations were from a range of industries including manufacturing, utilities, construction, agriculture and mining, and food.

Table 2
Company Industry Sales Interviewee
services. Electricity distribution and supply
£1.3 bn Chief Accountant
B Sale, service and hire of motor vehicles. Manufacture of
aircraft equipment. Manufacture of childcare products
and parts
D Power and energy trading £1.7 bn Chief Accountant
Generator distributor and retailer of electricity
E Beer, wines and spirits distillers and distributors £4 bn Group Controller
Restaurant franchisers
Food manufacturer and distributors
Non-response bias tests were undertaken to detect differences in the means of key variables for the two categories (all companies versus the companies which completed the questionnaire). These variables were
the number of employees, revenues, return on common equity and return on average capital employed. No significant differences were found.
4.3. Interview questions
Interviews were held with the accountants in five companies, who volunteered from the questionnaire
respondent group. Table 2 provides background information on the five companies. The interviews were semi-structured and included the following questions.
1. What does the company do? 2. What does the company consider strategic decisions to be? Please describe your company’s principal
strategies. Examples? 3. Does accounting play a role in strategic decision-making? Who uses the information (produc-
tion/marketing, etc.)? 4. How structured and formal are strategy development and implementation activities? 5. How far are these strategic activities based on qualitative/quantitative andfinancial/non-financial infor-
mation?
However, interviewees were encouraged to discuss broader aspects of strategy development and implementation in their companies and to clarify the nature of information used in their strategic processes and activities.
5. Results
5.1. Questionnaire results and discussion

Table 3
Responses on formality and structure in strategy development and implementation (proposition 1)
No of responses % Responses
2. Significantly but not entirely structured and formal 24 47.1
3. Equally structured and formal as unstructured and informal 20 39.2
4. Significantly but not entirely unstructured and informal 2 3.9
5. Entirely unstructured and informal 0 0
Total responses 51 100%
nearly 60% of respondents considered strategy development and implementation in their companies to be
more structured and formal than unstructured and informal. Only 4% of respondents indicated that their strategy development implementation tended towards unstructured and informal. Thus, P1 is supported.
T -tests (two-tails) were undertaken to test the relative importance of financial and non-financial information in strategy development and implementation. The results in Table 4 indicate that no significant differences were found in the importance of financial and non-financial information for strategy develop-
ment, supporting P2. However, financial information was found to be more important than non-financial information for strategy implementation. Thus, P3 is rejected. Also, while not proposed, it is noted that the average importance of financial information for strategy implementation (4.686) is significantly higher
than for strategy development (4.196). What are the implications of these results? The tendency to use more structured and formal processes
supports the rational perspectives of the strategy and management accounting literature. However, it could
be argued that formality may be more commonly associated with companies of the size that were selected for this study. In large companies, formality and structure may provide coordination and encourage shared
understandings that are needed when managers’ responsibilities and company operations span diverse and complex areas. The finding may also be partially due to accountants’ participation in strategic processes being related to the more structured aspects of strategy development and implementation. Perhaps non-
accounting managers participation in these processes are less structured? Balanced scorecard approaches emphasise the value of integrating financial and non-financial mea-
sures in the implementation of strategy (Kaplan and Norton, 1996, 2001, 2004). However, the companies
Table 4
Comparison of responses on the importance of financial and non-financial information for strategy development and implemen-
tation (propositions 2 and 3)
Strategy development Mean Standard deviation
Financial information 4.196 0.693
Non-financial information 4.176 0.654
At 5% confidence, t = 0.15, p = 0.88, P2 is supported
Strategy implementation Mean Standard deviation
Financial information 4.686 0.583
Non-financial information 4.240 0.716

surveyed here appear to place a stronger emphasis on financial measures for strategy implementation,
but this bias was not found for strategy development. A possible explanation for is that non-financial information is regarded as being of equal relevance in conceptualising strategic pursuits but controls to monitor the implementation of these strategies continue to place heavier reliance on financial monitors.
This may be due to accountants’ traditional preferences for financial information provision (Armstrong, 1987; Armstrong and Jones, 1992; Jones et al., 1993; Roslender, 1995, 1996). It could also stem from
accountants being more likely to participate in strategy implementation rather than strategy development in UKfirms, as has been reported in various surveys (Bhimani and Keshtvarz, 1999; Guilding et al., 2000). This could also explain why greater importance was attached to financial information in strategy imple-
mentation compared to strategy development. Responses to the open-ended question in the questionnaire provided further clarification of these issues.
The fourth open-ended question allowed respondents to describe how strategy development and imple-
mentation takes place in their organizations. In general, respondents indicated that the process of strategy development and implementation were differentiated and relatively structured and formalised. Strategic
processes were planned and deliberate and there was no indication of ad-hoc and spontaneous processes shaping strategy development and implementation, which provides support for P1. Some strategic decisions concerning corporate plans were tied to annual planning cycles which played an important role in
the development of business unit strategies. For example, the Head of Accounting of a manufacturer of construction products explained:
The business planning cycle operates as follows: (1) June/July review by executive directors of PLC 3 year plan; (2) business medium term top-down goals set; (3) business units develop individual plans to achieve targets and construct financial models; (4) group plans are consolidated and group
targets are added; (5) December board approval of one year budget and three year plan.
Also, a respondent from a global brewing company remarked on the formality of strategy development
in the company:
Strategy development is a core process with plans put in place for every operating unit. Implemen-
tation is managed by local management with detailed plans prepared by each function. There are regular periodic reviews (‘stop and think meetings’) with senior management to challenge strategic thinking during the strategy development process.
There was evidence of top-down involvement with bottom-up input being less prominent in the strategy development process. Formal systems involved the development of plans within business units or divisions
to allow for monitoring and review. Most respondents indicated an important formal role for the annual planning and budgeting exercises in relation to strategy implementation, which lends further support for the survey findings. For example, a respondent from a large chemicals company reported:
[the corporate parent] provides structure, discipline and support to the strategy development process but the Business Units are the owners and implementors of their own strategies. The budgeting
process provides an essential framework and forum for strategy presentation, development and monitoring. The Corporate Business Development function acts across BU’s on projects exceeding pre-defined scales and on strategic moves, acquisitions and divestments.

and their implementation. Thus one respondent noted that:
There is a high level strategy input to the executive team from the strategy department. Executives feed back strategy decisions to the Strategy Department. This is then formally structured in a strategic plan, which is approved by the PLC Board and implemented through a three year detailed business
plan (Director of Finance of a utilities company).
Also:
We have a dedicated strategic planning team that develops the strategy on a continuous basis having regard to macro-economic trends and sector specific trends. Implementation is by identification of
key objectives in each business unit and monitoring of achievement (Finance Director of a UK construction company.)
5.2. Interview results and discussion
Interviews were undertaken with a subset of the questionnaire respondents to further clarify the issues of formality and structure of strategic development and implementation and the use of financial or non- financial information in these processes. These are discussed below.
5.2.1. Company A
Company A managed the supply of utilities and their infrastructure. Strategic activities were defined
in terms of strategic investments in particular markets, where returns may not necessarily generate the required rates of return but new opportunities could evolve from the investment. In contrast, non-strategic investments were those in a current line of business which would be assessed using financial rate of return
hurdle rates. Both informal and unstructured information as well as formal financial information were input to strategy development.
On the question of the use of accounting information in strategic decisions, Company A’s Chief Accountant observed that such information had to be constructed from other available systematised data.
. . . we will build up specific models for each investment. In terms of costs for example, we will use unit costs from other investments to use as inputs into the discounted cash flow calculation. Because
you use some basic information, in order to get some reliability, we tend to build these up formally from scratch . . . but utilising historical information as applicable.
While financial information was part of the input to strategic investment calculations, Company A also
engaged in qualitative information evaluation as an input to the development of its future strategies. For example, the interviewee remarked that:
We would monitor government thinking on areas of public infrastructure, as to where they are going.
So for example, we have positioned ourselves by making one or two investments overseas in private industries which would put us in a very, very good position when the private infrastructure starts to take off.
He gave the following example:

we look at the way that companies are . . . making movements towards outsourcing of non-core
activities. We see ourselves as getting in there early and placing ourselves so that we would be at the leading edge for when expansion takes place. If it does, it does . . . if it doesn’t, it doesn’t, but all the other investments would still be making a reasonable return. That is the kind of thought process
behind our strategy.
The Chief Accountant explained that:
By actually being in that particular market, but not in that geographic segment, when that segment
opens up we clearly have some strategic advantage over others because we are already in that game. So we would do that. We would monitor that position. That is the type of qualitative information we use to make an assessment of where we think policy will go.
This is indicative of the role of both formal financial as well as non-financial and qualitative information input into strategic development decisions within Company A.
The collection and blending of information of different forms is an important part of strategic analyses
in this organization. The Chief Accountant pointed out that the information that is formally collected serves, in part, the needs of regulators:
The regulated business is subject to a vast array of controls in terms of performance, in terms of
cost and output. There are people, like the Drinking Water Inspector or Environmental Agency . . .
a whole host of other people. Obviously we have got an interest in the performance of our asset
base, but we also have the regulators, so we have to engage in a very large monitoring of actual performance of any asset or group of assets.
For this company, the information collected served therefore, an evaluative function which was closely
associated with the actual process of strategy development. However, the basis of evaluation was derived from organizational action which can more appropriately be regarded as strategy implementation. That is, information relating to the attainment of strategies had to connect to the development of the strategy.
Where an information shortfall existed, the strategic information had to be made obtainable. Strategy development and implementation in Company A were consequently closely intertwined:
. . . if this is not sufficient for us to efficiently manage, we develop information. . . so the information
requirements of statutory agencies is probably in fact less than our internal requirements.
Consequently, the externally imposed information collection is, for this company, relevant to identifying the internal managerial information needs of strategic relevance. Such needs bring to light the
interconnected nature of strategy development and implementation. Company A’s Chief Accountant considered strategic decisions in terms of engaging in new lines of
activities whereby informational analysis is undertaken in a structured and formal manner. Whilst both
financial and non-financial measures play a role in the development of strategies, commenting on a recent major strategic investment, Company A’s Chief Accountant noted that the accounting information ‘is
probably not recognisable.’ He remarked that:

But the monitoring of the investment is “chiefly done through the analysis of financial performance
measures”. This lends support to the findings of the aggregate survey results in relation to the propositions. Company A thus developed strategies using both financial and non-financial information where novel opportunities could emerge in the strategic activity. In terms of monitoring strategies, financial informa-
tion took precedence. Strategy-based information collection was largely guided by external factors and in particular changing legislation. The nature of information usage was therefore significantly specific to
the company’s prospector-like stance on strategy (Miles and Snow, 1978) combined with the legislation driven pressures within the industry it operated in. The emphasis on financial and non-financial information types in strategy development combined with the greater articulation of financial detail in strategy
implementation coincides with the questionnaire findings. However, what is clear also is that the actual analysis of information is extensively tied to the particular notion of strategic processes adopted by the firm and is dictated by its organization-specific concerns and priorities.
5.2.2. Company B
Company B is a manufacturer that in operates in distinct business areas: rear vision systems for vehi-
cles, aircraft interior systems, safety seats for children and specialised police and emergency equipment vehicles. The Financial Accountant described a recent strategic decision as a shift away from motorcar dealership and vehicle leasing and investments to aircraft interior business and specialised vehicle mar-
kets, which had greater potential for market share growth. Market growth and market share were regarded as key non-financial targets, which were important to achieving financial goals.
The process of strategy development and implementation in Company B was relatively structured and
formal:
Ten times a year we will sit and discuss this year . . . on a strategic planning forward-looking basis . . . The planning process is geared around achieving an appreciation in our share price relative to a peer group over the next five years. Therefore we consider what is happening to our top-line growth
given our relative market shares and the industry growth. We compare that with the performance that has been achieved by our peer group and from that we conclude what we need to do to outperform
the peer group. That will involve in some cases, vertical integration, so we can bring more of our cost base in house. We will also include aggressive acquisition plans to grab hold of technology that we do not have but we believe to be of future importance. It will include establishing green-field
sites in areas where we have a weak market share. They are the sorts of actions that we discuss in our strategic planning.
Thus, as with Company A, Company B had close links between information used to evaluate strategies and that used to develop strategy. The Financial Accountant noted that for strategic purposes:
. . . we report for each of the four divisions separately. There are certain statistics that we compare
from division to division such as return on assets managed and the efficiency of working capital . . .
we also look at, over a three and five year planning basis, the expected yield from their operations in terms of value added, EVA and discounted value of the future cash flows from the business.
Company B had a formal accounting system to produce a collection of long-term data which was used

We considered the market position, the opportunity for leveraging elsewhere geographically or
leveraging technology that is acquired into existing customers and long-term returns . . . the returns in excess of cost of capital . . . and a positive NPV.
He added however that:
. . . before we went ahead and made a deal with a negative NPV . . . we would need to be reasonably sure that the NPV, taking into account the softer variables, would end up as positive. We quantify as far as we can: if the financial case doesn’t stand we have to look at the better broader strategic
reasons, why we would do something. In general we are driven by the strategic imperatives. We do quantify things. If the quantification gives us a wrong answer than we look again at the strategy. It
is possible that we would not do something that appeared to be strategically desirable if it simply could not be made to work financially, but the main driver is strategic.
Thus, decisions at the interface of strategy development and implementation drew on both qualitative and quantitative information of financial relevance. To Company B’s Financial Accountant, strategy analysis implied an assessment of non-financial factors in the presence ideally of positivefinancial signals.
Company B viewed corporate strategy decisions as taking the company into new lines of business activity and thereby justifying central involvement. Strategic decisions at the divisional levels would be more
focused on expanding existing lines of business activities. The Financial Accountant noted that:
. . . adjacent expansion from our existing core would be discussed centrally. However if we are
talking about bringing out a new model of child safety seat, or new wing mirror for a different model of motor car, that would not be discussed at the centre. If, however we were to talk about
introducing a wheeled version of a child safety seat, so we got into prams or pushchairs that would be discussed at the centre. So as long as it is within our core, we don’t discuss it. If it is outside our core we would.
In summary, Company B stressed the coupling of financial and non-financial information in strategy development though it placed considerable emphasis on financial measures in strategy implementation
and monitoring activities. As noted, the interface between the two engaged a more diffuse mix of information types. A formalised and structured approach to strategic decision-making was taken. In developing
strategies, the company assessed financial concerns extensively but these could be overridden by qualitative factors. The opposite was also true, but seldom occurred. Once implemented, financial measures were key to monitoring strategic performance. Strategic significance was where a decision was deemed
core to a division’s activities. Within Company B, what constituted strategy and how strategic decisions were to be evaluated was particularly well defined. The company’s preference for balance in the mix of financial and non-financial information in strategy development together with its greater emphasis
on financial information in strategy implementation activities parallels the generic survey findings. The Financial Accountant’s articulation of strategy concerns and the particular nature of information analysis
are however indicative of a pronounced degree of firm specificity.
5.2.3. Company C
Company C manages newspaper and magazine publishing operations in regional sectors of the UK and

mobile design and development”. A strategic decision would entail establishing a working party to assess
its viability and then Board approval would be sought. In terms of information used for such decisions, the Group Accountant noted that:
. . . you are basically looking at as much information as you can . . . on a particular market, to determine whether you can actually get into their market. So return on sales is a key factor for
us—capital involved is another.
He further noted that Company C focused particularly on the nature of its “expertise” compared to competitors. It sought to maintain a close watch on “whether there is a knowledge gap within the business which we would try to rectify”. Strategic decisions in Company C thus involved the formal assessment
of financial and non-financial information. Developing an understanding of the market and competitors was regarded as important:
We collect information systematically on a regular basis . . . our reports come on a quarterly basis
and X’s [the main competitor] comes year round, and we go out and get that information ourselves for regular comparisons.
In relation to the role offinancial information in strategy evaluation, the Group Accountant at Company C noted that developing knowledge of competitors’ cost structures was essential:
. . . two significant items in our industry are clearly labour and newsprint. You can get quite a good handle on the newsprint side of things when comparing internal costs to competitors. Labour is not
always as apparent—it is difficult to make sensible comparisons because you do not know what their structure is exactly. But, yeah, cost overall is an important factor to look at.
Thus, like Companies A and B, Company C noted the extensive role of structured and formal systems
for considering both financial and non-financial information in strategic decisions. All three companies emphasised financial performance measures in the implementation of strategies whilst placing relatively equal significance on financial and non-financial measures in strategy development. Company C consid-
ered its strategic processes to be focused around factors which it regarded as having core significance in terms of its specific resources and organizational characteristics versus those of others in the industry. It viewed itself as differentiated from its competitors by virtue of the manner in which it determined
its actions in the market. Whilst information was derived from different sources including management accounting systems, outlining the company’s strategic activities based on comparative benchmarks with
competitors was a central element of this company’s management approach.
5.2.4. Company D
Company D engages in five different commercial areas in the energy industry: generation, distribution, power/energy trading, supply/retail of electricity and gas, and metering activities. Some activities face no competition (electricity distribution) whilst others such as retail electricity and gas face UK and overseas
competition. A strategic decision for Company D according to its Chief Accountant “. . . would be an acquisition . . . or a decision to go for big organic growth in a particular sector.” However, across the company’s areas of activities, what might be regarded as a strategic issue differed. As a consequence, the

. . . if you look at electricity distribution, then quality is a big issue because the only measures apart
from input measures are quality measures. But in retail or trading, electricity and gas are treated as a commodity . . . In retail, it’s all about how cheaply you can do it and in power and energy trading it’s more about how big a volume you can pass through your doors.
The Chief Accountant of Company D further explained that the type of information utilised in strategy
development was diverse, comprising both financial and non-financial information, and was relatively structured in its assessment of non-financial factors:
. . . we have a standard template, so we use effectively fairly standard investment appraisal tech-
niques, which we add to by the use of a balanced scorecard as a technique. So we try to look at a project in fairly broad terms on financial bases in terms of cash flow and also a balanced scorecard basis—looking at the impact a project might have on the environment or people, society, customers,
etc . . . all the dimensions of our business.
He added:
Essentially what we do is an internal due diligence which involves not only preparing impartially what we think the financial outcome of the project will be, but we also look at the potential risks and how they could be mitigated, what are the particular commercial exposures there might be and
other sensitivities. And impacts on things like credit rating, financing, etc. We look at all those in addition to the balanced scorecard stuff.
In terms of the implementation of strategies, the Chief Accountant commented that:
Just because you are an accountant does not mean that you sit all day and add numbers up . . . and therefore what we have got is a bunch of people who are qualified in that sort of area and who are
also capable of involving a strategic perspective.
Once again, Company D, like Companies A, B and C, placed an equivalent degree of importance on both financial and non-financial information in strategy development. It considered the extent and
nature of strategic information evaluation as being dictated largely by the business sector in question. In areas where the product was highly commoditised, increasing volume of product sales was regarded as an important objective rather than achieving premium pricing via product diversification. Company D
was reliant on a formalised system for engaging in strategic processes which involved both financial and non-financial information analysis. It made intense use of information derived from structured sources and formal systems. However, some aspects of a strategy’s implications for exposure of the business in
the market and stakeholder sensitivities were assessed outside of the parameters of the formal system. The company’s broad approach to the use of financial and non-financial information does not depart from
that of companies in the aggregate survey findings. However, in terms of the enterprise’s classification of forms of information and their perceived relevance, the company’s practices were indicative of a high degree of refinement and categorical judgment.
5.2.5. Company E
Company E operates in four sectors: wines and spirit distillation and sales, restaurant retailing, beer

Controller indicated that a relatively structured approach to the finance function was in place:
If you look at our operating companies, the way that we structured our finance function is that we separated it into two—the traditional, get the numbers down, roll them up, make sure that they all tie, getting the financial reports done, all that is one department in Finance. The other department
within our operating companies is what we call our decision support function, which works actively with the management teams to make sure that we make the right decision.
Effectively, the finance function within Company E was responsible for undertaking standard opera-
tional and statutory activities. Additionally, it was seen as a source of intelligence for the company to develop strategies appropriately. The Group Controller expanded on the role of information deployment in strategy development:
We recently designed a new strategic planning process. Out of that we have Finance working very closely with the teams in the market. The things that we are looking at are: What is the brand portfolio? How much value is there to be created within the segments that we are operating within?
Should we have a company on the ground ourselves, or should we think about the Joint ventures or distribution agreements or whatever. What is going to be the key driver for us to generate superior returns for our shareholders? What is the City looking for from each of our business?
Thus, although information of relevance in developing a strategy reflected a variety of forms and sources, ultimately, the questions the company sought to answer according to the Group Controller “all had financial consequences”. The implementation of strategy rested on the analysis of financial data. The
Group Controller noted that:
What is our ultimate purpose in life? It is to enhance stakeholder value. . . The way we have decided to do this is by having a detailed strategic and financial review of every part of the business.
Company E actively engaged in benchmarking and measured their performance against their peers in terms of shareholder returns.
Company E blended financial and non-financial information in implementing strategies:
The driver of value ultimately is top line growth. So we created a balanced scorecard approach
which is saying, What are the key drivers of value in each of our businesses? You generate value when you optimise pricing decision, when you look at the value chain—right from producing the product in the factory to delivery to the customer. What are the key drivers of value along this chain
where we can optimise value? And what that has actually done is that we developed a whole series of KPIs, which are financial and non-financial.
Company E’s Group Controller further indicated the diversity of performance indicators which needed
to be monitored in the strategy implementation process:
We look at working capital, and are we maximising our return on capital employed? We also focus KPIs on people. How many women employees have we got? How many ethnic minorities? How
many employees you regard as high potential?

focus for performance indicators:
Our belief is that business is based on three pillars. One is building brand equity, which is important for a consumer good company. You have to build the health of your brand, because our ultimate
profit streams depend on that, so we have a whole series of measures to look at the equity of our brands in every market around the world. The second area is building the right sort of people in the company. Their strengths will ultimately drive the business as well, because quality people will
drive quality results. And the third area is the whole sort of performance ethic that we have in the company almost like “we will deliver the financial results, and this is how we are going to deliver
it” and actually really embedding that in the corporate culture. And then, along with the traditional financial measures, design things to monitor this in terms of a strategic level efficiently.
The notion that financial results feed into strategy development and implementation activities was not independent of the managerial perspective which was espoused within Company E in terms of the role of management accounting in the strategy process:
The management accounting function prepares the information, andfinancial analysts in the decision support function take that information and they are the ones who sort of lead the charge in the whole
strategic planning area.
Within Company E, the Group Controller identified a gradual alteration of the management accounting
function toward a wider role in producing information of strategic relevance, and stressed that strategic decisions require methodical input of structured data via finance and management accounting activities:
The whole strategic decision making process is structured and formalised because you need to be rigorous . . . you have to have that sort of discipline within the business because otherwise you just would not know what is going on. This is about using those numbers to actually drive performance
in the business.
Thus, Company E engaged in extensive analysis offinancial and other types of quantitative information.
Equally, it considered non-financial measures to be relevant in both developing and monitoring strategy. Company E indicated a highly formalised method of integrating a variety of financial, quantitative and non-financial measures viewed as key to strategic activities. Whilst not departing in this respect from the
general survey findings, Company E’s use of accounting information in strategic analysis was reflected in and influenced by the perspective it adhered to in relation to the role it desired of the finance function.
5.2.6. Summary
In summary, the survey results and the interviews suggest that what the management accounting presumes regarding the structure and formality of strategic processes broadly aligns with the views of the
responding group of accountants. However, the balance between financial and non-financial information was more prevalent in strategy development than in implementation. The key aspects of the approach taken by each company in implementing structure and formality is summarised in Table 5.

Strategic approach of the five companies involved in the interviews
Company Strategic decisions and distinctive
features of the strategic approach
Strategy development Strategy implementation
markets
with specific models for each
investment. A blending of financial and
non-financial information. Long-term
rate of return was not sufficient, but
investments were needed to provide
new opportunities
regulators who evaluated processes and
performance influenced what was
collected internally. Close links
between information to evaluate
Utilities management and
motor vehicles,
motor vehicle dealership) to another
(e.g. aircraft interior business) and
decisions that were core to a division’s
activities
Planning process geared around
Strategic imperatives dominate when
evaluation criteria were market growth
and market share. Accounting system
produced long-term data specifically for
strategy development
of strategies
technological developments
assessment of financial and
non-financial information to understand
competitors. Return on sales, capital
involved and assessment of expertise
relative to competitors were important
criteria
assess any knowledge gaps in expertise
compared to competitors
Comparative benchmarking of
performance against competitors
Strategy development Strategy implementation
undertake organic growth in a particular
sector
non-financial information used.
template to encourage standard
investment appraisal techniques, and
proposal on range of stakeholders.
Broad assessment criteria involved
and stakeholder sensitivities. The
decision depended on the particular
area of activity of the proposal
Accounting data was provided in a way
that supported strategic perspectives.
information
relevance of information varied
Some areas characterised by broad
assessment criteria and high levels of
formality in strategy development
faced no competition,
returns to shareholders, including
expansion, joint ventures, distribution
evaluate strategic opportunities. Use of
both financial and non-financial
information and benchmarking of
performance (e.g. shareholder returns)
to analyse the key drivers of value and
establish KPIs that covered financial
and non-financial areas. An emphasis
on the extensive analysis of data
Beer, wines and spirit

edge. Companies A and B relied extensively on formal meetings to develop strategy and saw strategy
development and implementation as closely linked. The concerns of Company D in its obligation to multiple stakeholders were reflected in the high formality of its strategy development processes and its broad evaluation criteria.
What is also evident from the interview comments is the diversity of ways in which strategic activities are considered to be formal and structured processes and the context defined salience of what constitutes
strategic information and indeed, strategic activity itself. Strategic decisions for Company C fell clearly within its defined publishing market, whereas for Company B it entailed considering opportunities in other markets.
6. Discussion and conclusion
The aim of this paper was to investigate whether strategy development and implementation activities used in practice are formal structured processes, and whether financial and non-financial information are
of equal importance across strategy development and implementation activities.
6.1. Summary of results and implications
The questionnaire-based results of the study confirm that that strategy development and implemen-
tation were relatively structured and formal activities in the companies investigated. While financial and non-financial information were considered equally important for both strategy development and implementation, the companies surveyed placed greater importance on financial information for strategy
implementation. The interviews largely corroborate the survey results, but also suggest a high degree of organizational specificity in terms of notions of what constitutes strategic decisions, what analyses these
entail and what criteria are legitimate in determining what underpins relevant strategic information. The interviews suggest that in considering strategic processes as being formal and structured,firms also
determine what can be viewed as identifiable and visible and as affording managerial action. Whilst senior
corporate accountants generally considered it desirable to use financial and non-financial information in strategic processes, the results of the study indicate that strategy development and implementation must be translated into tangible and identifiable activities to make them amenable to structured informational
visibility. There seemed to be a perception among some accountants that making strategically relevant information more visible was as desirable as strategic engagement itself.
In the companies that were interviewed there is recognition that whilst strategy development and
implementation are organization-wide processes, their objectification is designed to suit senior managers’ predilections to strategic planning and action. The utilisation of formal information by business unit senior
management was regarded as valuable although the internally defined procedures through which such engagement takes place tend to be centrally demarcated and to be extensively organization-specific. Information deployment for strategic activities evidences particularity that derives from diffuse but still
central input from within the organization. The structural demarcation betweenfinancial and non-financial data collection and reporting is in effect extra-functionally and para-organizationally determined. The perceived need for strategic information, both financial and non-financial, is largely standard across the

As noted, the strategy-linked accounting literature is largely based on the articulation of normative
models which presume structure and formality of strategic processes. The results presented here suggest that senior corporate accountants broadly subscribe to such a conception of strategic processes. However, strategic activities and corresponding information analyses appear also to be operationalised with a high
degree of context specificity and organizational particularity. The investigation has relied on data generated from a questionnaire and interviews, and both these
sources present difficulties in terms of the reliance that can be placed on the findings (see Birnberg et al., 1990; Cook and Campbell, 1979). For example, the qualitative questionnaire responses may have encouraged respondents to present a more rational and structured characterisation of strategic activities
than they perceive. This can result from the perception that normative rationality is important to signal externally. The interviewees possibly also slanted their portrayal of strategic processes in this same regard. Additionally, it may be that some questionnaire respondents did not a priori consider informal processes
and unstructured data as being connected to strategic endeavours. Their responses could therefore bias the results unwittingly toward perceiving formality and structure within organizational systems tied to
strategic processes. The focus on accountants as respondents may also mean that their view is not shared by other managers involved in the strategic management processes within the particular organization. The interviews undertaken with the subset of questionnaire respondents mitigates the interpretational
hurdle which this poses. However, more extensive triangulation of data would be desirable to enhance the integrity of the broad study results.
6.2. Areas for future research
The results point to various avenues for future research. One is to gain more qualitative insights on
how particular organizations determine what is seen to be strategic and the manner in which they develop approaches to dealing with decisions regarded as strategic. This ultimately will generate an understanding of how organizational nuances as to formal information generation and use come about. Engaging in
such research requires more extensive enterprise-based longitudinal studies which seek to assess wider organizational factors and their impact on strategic decisions. Of equal interest would be investigations
as to the extent to which management accounting practices actually influence strategies within particular organizational settings. It is likely that different organizations operationalise accounting information in different ways and with differing impacts on strategic processes (Chenhall, 2005; McBarnet et al., 1993;
Mouritsen, 1999). Whilst in aggregate terms, organizations may determine ways in which they might seek to utilise financial and non-financial information, detailed organization-focused studies will likely point to nuanced differences in information usage and variety in strategic processes and consequences at
the interface of such deployment. The results of the present investigation have pointed to formal information of strategic relevance
which is deployable by business unit senior managers as emanating from centrally demarcated and organizationally defined parameters. These findings complement research of performance measurement systems and their linkages with organizational level. Lipe and Salterio (2000) in this regard, suggest
that situationally adapted and unit-specific measures are not highly relevant to evaluations by higher organizational levels where there is stress on corporate-wide control measures. Similarly, Banker et al. (2004) also suggest that evaluators rely more on common measures than on unique measures, but

different organizational levels. Juxtaposing business unit versus firm-wide perspective on strategy-based
information usage thereby opens potentially worthwhile research avenues. Senior accountants in the sample of companies investigated here desired balance in the use of financial
and non-financial measures in strategy development. However, information input into strategy imple-
mentation processes tended to give precedence to financial measures. Within the firms investigated, integrating financial assessment into strategic analyses was regarded as being important and particularly
relevant to strategy implementation. Some prior studies have indicated that within British firms, strategy implementation comprises a greater focus of accountants’ input of responsibilities as compared to strategy development (Bhimani and Keshtvarz, 1999; Guilding et al., 2000). Scholars have argued also that
strategic thinking is, at least in UK firms, likely to be represented in financial and technical terms given the training of accountants (Armstrong, 1987; Roslender, 1995). In this light, Ahrens (1996, 1997a,b) and Ahrens and Chapman (1997) have noted UK management accountants’ particular involvement in
operational aspects of strategic management. Appleyard and Pallett (2001) have likewise remarked on UK management accountants being especially focused on adding value to wider decision-making activ-
ities rather than being procedurally correct. One study of UK and German companies by Coates et al. (1995, 1996) reports that financial measures are highly important in the UK firms in the monitoring of the performance of divisional units. A study byCIMA (1993) has also indicated the extensive use of financial
measures such as return on working capital and financial yield in British manufacturing firms. Likewise an investigation of UK, German and US multinational enterprises by Coates et al. (1992) reported greater detail of profit-focused performance measures among the UK firms. These studies point to a possible
UK-specific enterprise reliance on financial measures which may underlie thefinancial information stress placed by the firms investigated here in their strategy implementation practices. Cross national investiga-
tions of the deployment of financial and non-financial information in strategic analysis would be useful in drawing out the existence of country-specific predilections. Triangulation of survey derived information inevitably will provide richer bases of interpretation particularly in multi-country studies.
Acknowledgments
The authors gratefully acknowledge the comments of Thomas Ahrens, Oliver Bohlen, Robert Chenhall, Eva Labro, Jan Mouritsen, Andries Oudshoorn, Robin Roslender and Juhani Vaivio as well as participants
at seminars at Copenhagen Business School, London School of Economics and ISCTE (Portugal) where earlier versions of this paper were presented.
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