Contemporary Management Accounting Practices, Innovation and Organizational Performance of Service Organizations in Malaysia

The purpose of this study is to examine the relationship between contemporary management accounting practices (CMAP), innovation and organizational performance (OP) of service companies in Malaysia. CMAP is represented by Decision Support System (DSS), Balanced Scorecard (BSC) and Total Quality Management (TQM). The population of this study includes all the service listed companies and large scale non-listed companies. Purposive random sampling techniques is deployed and a total of 139 useful responses were collected through the questionnaire. Analyzing the data using the Social Science Statistics Package (SPSS) and Smart Partial Least Squares (Smart PLS). Results showed CMAP has a positive and significant effect on innovation and OP. The components of CMAP (DSS, BSC, TQM) have positive and significant effects on OP. Innovation has positive and significant effect on OP. Service companies in Malaysia are recommended to focus more on deploying the CMAP to improve their competitiveness. In addition, innovation is important for companies to achieve competitive advantage and improve the organizational performance.