Accounting systems, performance, and market orientation in Saudi Arabia SMEs

Abstract

The main purpose of this paper is to test the impact of Market Orientations (MO) on the performance of Small and Medium Enterprises (SMEs) in Saudi Arabia. More specifically, first, we examine the relationship between MO and Management Accounting Systems (MAS) use. The use of MAS is known to affect performance. Second, we study the role of Accountants’ Participation in Strategic decision-making (ACCPS) applied in the relation between MO and MAS use. The data was collected via an electronic questionnaire distributed among a sample of managers operating in Saudi Arabia SMEs. The hypotheses were tested using structural equation modelling with data collected from 251 randomly selected SMEs. The results reveal that the MAS mediates the effect of market orientation on firm performance. They also indicate that the interaction among Market Orientations (MO) and Management Accounting Systems (MAS) use is increased by raising the Accountants' Participation in Strategic decision-making (ACCPS), which confirms a positive effect of the moderating variable. The implication of this research is to help Saudi companies achieve higher performance from MO (marketing variable) through the usage of accounting business processes (accounting variables).