2022 Reports

The Role of Management Accounting in Stakeholder Theory

Ohnishi, Junya

In economic activities, profitability is effective for governance and/or management of organizations, through financial figures explicitly and/or implicitly. While Shareholder Theory utilizes, at most, functions of profitability, expressed by financial figures, what does Stakeholder Theory utilize? According to this paper, in addition to profitability, it increases the importance of strategy and dialogue. In the case of public sectors, in cases without profitability, strategy and dialogue become more fatal issues, if used correctly.

The theme of this paper is to study the role of management accounting in Stakeholder Theory in corporate governance, with reference to discussions on management accounting in Japan. Also, this paper considers public sectors in the analogy of its discussion.

Keywords: management accounting, stakeholder theory, shareholder theory, agency theory, stakeholder engagement, strategy, dialogue, the Balanced Scorecard (BSC), strategy map, usability of information, logic model, the Inter-Organizational Relationship (IOR), behavioral control, social control, public sectors