The consequences of customization on management accounting system design Jan Bouwens a, *, Margaret A. Abernethy b a Nyenrode University, Straatweg 25, 3621 BG, Breukelen, The Netherlands b The University of Melbourne, Accounting and Finance, Parkville, Victoria 3052, Australia Abstract The understanding of the antecedent conditions in¯uencing the design of management accounting systems (MASs) is very limited. In recent years, signi®cant research attention has been devoted to understanding how dierent strategic priorities in¯uence these systems. However, the results of these studies have been, at best, equivocal and numerous calls have been made for further research to ``unravel'' the con¯icts that have emerged in the literature. The purpose of this study is to examine not only the relation between strategy and MAS but also to develop a theoretical model to explain how and why this relation exists. The model draws on Galbraith [Galbraith, J. (1973). Designing complex organisations. Reading: Addison-Wesley] to develop a theoretical argument concerning the inter-relations among customization, interdependence and MAS. We are particularly interested in assessing whether the relation between customization and MAS is a direct one or whether the relation operates via interdependence. The results indicate that customization aects MAS via interdependence, rather than directly. The study of 170 production and sales managers further revealed little dierence in MAS use between production and sales managers facing similar amounts of customization or interdependence. # 2000 Elsevier Science Ltd. All rights reserved. 1. Introduction To dierentiate products and services from competitors an increasing number of ®rms, both large and small, are pursuing customer-responsive strategies such as customization or manufacturing ¯exibility (Gilmore & Pine, 1997; Kotha, 1995). The pursuit of such strategies poses signi®cant challenges for the management of these ®rms par- ticularly in the design of appropriate structures and information systems (Abernethy & Lillis, 1995; Brickley, Smith & Zimmerman, 1997). The purpose of this study is to examine the implica- tions for the design of management accounting systems when ®rms pursue customization as a strategic priority. Customization requires the development of an organizational culture where individuals are encouraged to be innovative and responsive to customer requirements. To manage eectively in this setting requires the implementa- tion of a sophisticated information system to ensure that managers have the information neces- sary to cope with continual changes in product design and processes. The pursuit of customiza- tion also changes the nature of the relation between functional subunits within the ®rm, as the work ¯ows between subunits become highly 0361-3682/00/$ - see front matter # 2000 Elsevier Science Ltd. All rights reserved. PII: S0361-3682(99)00043-4 Accounting, Organizations and Society 25 (2000) 221±241 www.elsevier.com/locate/aos * Corresponding author. Tel.: +31-346-291280; fax: +31- 346-291250. E-mail address: j.bouwens@nyenrode.nl (J. Bouwens).