Preparedness of accounting graduates in lean accounting in South Africa Nyanine Chuele Fonou

175 Pages·2017·2.56 MB·English

Preparedness of accounting graduates
in lean accounting in South Africa

Nyanine Chuele Fonou Dombeu
(STUDENT NO. 26039710)

Dissertation submitted in fulfilment of the requirements for the degree
Magister Commercii
in
Management Accounting
in the
SCHOOL OF ACCOUNTING SCIENCES
in the
Faculty of Economic Sciences and IT
at the
North-West University (Vaal Triangle Campus)

Supervisor: MJ Swanepoel
Co-Supervisor: Prof P Lucouw

Vanderbijlpark
2016
DECLARATION
I, NC FONOU DOMBEU, declare that Preparedness of accounting graduates in lean
accounting in South Africa is my own work and that all the sources I have used or
quoted have been indicated and acknowledged by means of complete references. This
dissertation has not previously been submitted by me or any other author to any other
university.

SIGNATURE DATE

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ACKNOWLEDGEMENTS
I would like to express my sincere gratitude to the following people who made the
completion of this dissertation possible.
First and foremost, I would like to praise and infinitely thank God Almighty for given me
the wisdom, health and strength throughout this journey.
Secondly, my loving and caring husband, Fonou Dombeu Jean Vincent, for his constant
support, guidance, encouragement, motivation and inspiration. I couldn’t have done this
without him.
My wonderful children, Serena, Ismael and Arielle, for their love, support and
understanding.
My awesome supervisor, Mr MJ Swanepoel, for his guidance, ongoing support,
feedback and interest in this study.
My co-supervisor, Prof P Lucouw, for his contribution to this study.
My parents, Irene and Jean Bosco Mpombo, and sisters, Josiane, Aurelie, Christelle
and Flore, for their love and encouragement.
My friends, Winsent and Keagean, for their support and encouragement.
Mrs Elmarie Viljoen-Massyn, for the language editing of this dissertation.
Lastly, to all people who contributed to my completion of this study.

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ABSTRACT
Lean accounting is an innovative management accounting strategy that is being
implemented by organisations worldwide to achieve business objectives and maintain
economy competitiveness. The current economic situation in South Africa requires
organisations to adopt innovative solutions such as lean accounting. However, the
literature shows that South African organisations have not yet embarked on lean
accounting adoption. Furthermore, case studies in various countries have revealed that
a shortage of employees with knowledge of lean principles is one of the main barriers to
the adoption of lean accounting in organisations. So far, no study has been conducted
on the capacity of South African human resources to adopt lean principles. Moreover, it
is not known the extent to which accounting curricula at South African institutions of
higher learning has been updated to include content that would prepare students to
participate in lean accounting projects after graduation.
This study investigated whether the prescribed textbooks at South African universities
include sufficient lean content to prepare accounting graduates to participate in lean
accounting projects. The study followed a qualitative approach based on document
analysis. First, a literature review was conducted of published articles that focus on lean
accounting. A content analysis of the articles was performed to select the relevant
publications for the study. The content of the selected publications was analysed further
to identify and record all the lean principles and methods, as well as the practical
methodologies of lean strategy implementation. Secondly, lists of prescribed textbooks
in use at accounting departments at several South African universities were collected
and the content of these textbooks was analysed to identify all sections pertaining to
aspects of lean. These sections were recorded for further analysis. Finally, the
information obtained on lean concepts discussed in various sections of the collected
accounting textbooks was matched to the definitions of lean concepts from the
literature.
The findings revealed that, out of the 14 existing lean principles identified in the
literature, only three (21.4%) were discussed in the prescribed accounting textbooks.
Likewise, out of the 10 existing lean methods identified in the literature, only five (50%)
were discussed in the prescribed textbooks. Moreover, the data analysis indicated that
the prescribed accounting textbooks at South African universities do not emphasise
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lean concepts. Lean concepts identified in prescribed textbooks are discussed in
isolation and there are no complete sections or chapters dedicated to lean methods
and/or principles. Further, none of the prescribed textbooks allocated a full chapter or
section to the discussion of any aspect of lean. The main finding of the study was that
prescribed textbooks at South African universities do not include sufficient lean content
to prepare accounting graduates to successfully participate in lean projects after
graduation.

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TABLE OF CONTENTS
DECLARATION ............................................................................................................... i
ACKNOWLEDGEMENTS ............................................................................................... ii
ABSTRACT .................................................................................................................... iii
TABLE OF CONTENTS.................................................................................................. v
LIST OF TABLES ........................................................................................................... x
LIST OF FIGURES ........................................................................................................ xii
LIST OF ABBREVIATIONS .......................................................................................... xiii
CHAPTER 1 INTRODUCTION AND BACKGROUND TO THE STUDY ......................... 1
1.1 INTRODUCTION ............................................................................................... 1
1.1.1 Lean thinking ...................................................................................................... 2
1.1.2 Management accounting systems ...................................................................... 4
1.1.2.1 Traditional accounting system ............................................................................ 4
1.1.2.2 Activity-based costing system ............................................................................ 5
1.1.2.3 Target costing .................................................................................................... 5
1.1.2.4 Lean accounting ................................................................................................. 6
1.1.3 Barriers to lean accounting adoption .................................................................. 7
1.1.4 Preparedness of accounting graduates ............................................................. 8
1.1.5 Motivation........................................................................................................... 8
1.2 PROBLEM STATEMENT ................................................................................... 9
1.3 RESEARCH OBJECTIVES ................................................................................ 9
1.3.1 Primary objective ............................................................................................... 9
1.3.2 Secondary objectives ......................................................................................... 9
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1.4 RESEARCH DESIGN AND METHODOLOGY ................................................. 10
1.4.1 Literature review .............................................................................................. 10
1.4.2 Population ........................................................................................................ 10
1.4.3 Data collection procedure and data analysis.................................................... 10
1.5 CONTRIBUTION OF THE STUDY .................................................................. 11
1.6 ETHICAL CONSIDERATIONS ......................................................................... 11
1.7 CHAPTER CLASSIFICATION ......................................................................... 12
1.8 CONCLUSION ................................................................................................. 12
CHAPTER 2 LEAN AND LEAN ACCOUNTING – AN OVERVIEW OF THE
LITERATURE ................................................................................................... 14
2.1 INTRODUCTION ............................................................................................. 14
2.2 HISTORICAL BACKGROUND ON LEAN ........................................................ 14
2.3 THE TOYOTA PRODUCTION SYSTEM ......................................................... 15
2.4 LEAN STRATEGY ........................................................................................... 18
2.5 LEAN PRINCIPLES ......................................................................................... 20
2.6 LEAN METHODS ............................................................................................. 24
2.7 LEAN IMPLEMENTATION ............................................................................... 29
2.7.1 Evidence from industry..................................................................................... 29
2.7.1.1 Lean implementation in the manufacturing industry ......................................... 29
2.7.1.2 Lean implementation in the service industry .................................................... 31
2.7.2 Barriers to lean implementation ....................................................................... 32
2.7.3 Requirements for the successful implementation of lean ................................. 35
2.8 LEAN ACCOUNTING ...................................................................................... 36
2.8.1 Value stream management .............................................................................. 37
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2.8.2 Visual management ......................................................................................... 40
2.8.3 Continuous improvement ................................................................................. 40
2.8.4 Benefits of lean accounting .............................................................................. 41
2.9 THE GAP BETWEEN ACCOUNTING EDUCATION AND PRACTICE ............ 42
2.10 CONCLUSION ................................................................................................. 43
CHAPTER 3 RESEARCH METHODOLOGY ............................................................... 45
3.1 INTRODUCTION ............................................................................................. 45
3.2 RESEARCH PARADIGM ................................................................................. 45
3.3 RESEARCH DESIGN ...................................................................................... 46
3.3.1 Qualitative research ......................................................................................... 47
3.3.2 Quantitative research ....................................................................................... 47
3.3.3 Qualitative vs quantitative research ................................................................. 48
3.3.4 Mixed-method research ................................................................................... 49
3.4 RESEARCH METHOD..................................................................................... 50
3.4.1 Data collection ................................................................................................. 52
3.4.1.1 Population and sampling .................................................................................. 52
3.4.1.2 Data collected from the literature ..................................................................... 53
3.4.1.3 Data collection from prescribed accounting textbooks ..................................... 55
3.4.2 Data analysis ................................................................................................... 64
3.4.3 Ethics in research ............................................................................................ 64
3.5 VALIDITY AND RELIABILITY .......................................................................... 65
3.6 CONCLUSION ................................................................................................. 65
CHAPTER 4 DATA ANALYSIS AND FINDINGS .......................................................... 67
4.1 INTRODUCTION ............................................................................................. 67
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4.2 DATA ANALYSIS OF PRESCRIBED TEXTBOOKS ........................................ 68
4.2.1 Number of universities and prescribed textbooks ............................................ 68
4.2.2 Lean-related concepts identified in prescribed textbooks ................................ 70
4.2.2.1 Lean principles in prescribed textbooks ........................................................... 72
4.2.2.2 Lean methods in prescribed textbooks ............................................................ 79
4.2.2.3 Lean themes in the prescribed textbooks......................................................... 90
4.2.2.4 Summary.......................................................................................................... 96
4.2.3 Volume of prescribed textbooks allocated to lean concepts ............................ 96
4.3 PRESENTATION AND DISCUSSION OF FINDINGS ..................................... 97
4.3.1 Common definitions and functionalities of lean concepts in the literature
and prescribed textbooks ................................................................................. 98
4.3.2 Limited discussion of lean concepts in prescribed textbooks ........................... 98
4.3.3 Partial discussion of lean principles and methods in prescribed textbooks ...... 99
4.3.4 Limited space allocated to lean concepts in prescribed textbooks ................... 99
4.3.5 Similar findings in related studies ................................................................... 100
4.4 CONCLUSION ............................................................................................... 101
CHAPTER 5 CONCLUSION AND RECOMMENDATIONS ........................................ 102
5.1 INTRODUCTION ........................................................................................... 102
5.2 RESEARCH OBJECTIVES ............................................................................ 102
5.2.1 Secondary objective 1 .................................................................................... 102
5.2.2 Secondary objective 2 .................................................................................... 103
5.3 LIMITATIONS OF THE STUDY ..................................................................... 104
5.4 RECOMMENDATIONS FOR FURTHER STUDY .......................................... 105
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5.5 CONCLUDING REMARKS ............................................................................ 105
REFERENCE LIST ..................................................................................................... 106

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