The paper "Issues in Management Accounting Research" is a perfect example of a finance and accounting coursework. The two-stage model adoption, according to Kennedy and Fiss (2009), is related to motivation to achieve gains and opportunity framing in the early stage. It is related to motivation to avoid gains and threat framing when adoption is in later stages. However, criticism has been leveled against the conventional two-stage model over the argument that space and time separate the social and economic motivations. This model has been regarded by a number of authors as having major weaknesses.
First, indirect testing of motivations to drive adoption influences substitution of legitimacy for efficiency instead of direct assessments (Kennedy & Fiss, 2009; Donaldson, 1995). Second, instead of providing institutional processes, existing evidence supports the absence of economic and technical determinants of adoption (Scott, 1995). Similarly, Staw and Epstein (2000) observe that many studies have failed to strike a difference in adoption motivations among later and early adopters based on the two-stage model. This means that the pattern of adoption explains the conflicting and multiple circumstances that include social learning shown in the model.
For example, later adopters understand what works more than earlier adopters and that is why, to a lesser extent, they desire to experiment with innovations. Third, conventional two-stage model adopters are limited in scope and only focus on achievement of economic gains while failing to argue that early adopters may pursue social gains such as attaining higher status or distinguishing themselves. Fourth, the model separates social and economic motives for adoption while sharply differentiating mimicking and rational adoption behavior (Kennedy & Fiss, 2009).
Fifth, it is obvious that the timing of adoption remains unexplained, yet early or late adoption timing is assumed to explain the gains or losses behind adoption motivations. Decision-makers will likely adopt an innovation that is late in the diffusion process to avoid losses and not to achieve gains and not as argued by the conventional two-stage model. Finally, the model assumes that the relevant predictor of adoption motivations is adoption timing but in the current debate, different circumstances in different firms affect the adoption of diffusing innovations (Staw & Epstein, 2000).
Current authors posit that adoption decision-making potentially creates diverse outcomes such as implementation and adoption of innovations among firms. The conventional two-stage model is seen as neo-institutionalist based on the theory isomorphism and needs to be expanded in scope (Lounsbury, 2008). Indeed, the model is short of institutional literature that currently includes heterogeneity and change in the study of diffusion (Chandler & Hwang, 2015). Contributions of management accounting innovations (MAIs) to the body of research At the firm level, the adoption of innovations has been influenced by firm characteristics and general contextual factors that prevail in this area of research.
Researchers of management accounting not only draw on the new-institutional diffusion perspective but also new-institutional theory defined by the management fashion variant. A novel perspective on adoption has been shaped by the dynamic relationships between innovation characteristics and organizational culture, and how it relates to adoption timing and motivation (Cadez & Guilding, 2008). The study of Management Accounting Innovations (MAIs) signifies the onset of complex relationships between adoption and firm characteristics. Although this aspect has been assuming a static and direct relationship, it had been tested in previous management accounting research (Al-Omiri & Drury, 2007).
Brown et al. (2004) help to explain the weak link between the adoption of innovations and contextual factor findings in previous management accounting.
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