Background
In today's knowledge-based economy, organizations are increasingly investing not only in physical assets but also in intangible assets, with intellectual capital emerging as a critical value driver (Mehralian et al., 2013) Effective management of intellectual capital is essential due to its significant direct and indirect benefits, including enhanced knowledge processing, a structured learning process, and the development of sustainable competitive advantages (Roos et al., 1997; Riahi-Belkaoui, 2003) As Vietnam has embraced an open-door policy since the 1990s and integrated into the AEC and TPP, competition among Vietnamese enterprises has intensified Consequently, managers must recognize the importance of intellectual capital in achieving sustainable competitive advantages in the global market, which will encourage further scholarly research on its impact within the Vietnamese context.
The concept of intellectual capital has evolved through three distinct stages in response to societal concerns The first stage, initiated in the 1990s, focused on raising awareness, defining key concepts, and reviewing case studies (Mehralian et al., 2013) The second stage, beginning in 2000, emphasized measurement, modeling, and international case studies, revealing a positive correlation between intellectual capital and corporate performance across various research methodologies (Mehralian et al., 2013) The third stage, which commenced in 2004, highlights the managerial implications of effectively managing intellectual capital Most research has been concentrated in developed Western nations and select Asian countries, including Thailand and Malaysia.
Hong Kong, this specific area of intellectual capital has been neglected in the body of Vietnamese literature
Strategic management accounting, as defined by CIMA, focuses on information relevant to key strategic decisions and has the potential to play a significant role in managing intellectual capital, which is considered an asset for strategic purposes While existing literature primarily addresses external reporting and measurement of intellectual capital, there is a lack of discussion on the reciprocal relationship between intellectual capital and strategic management accounting Organizations with strong intellectual capital can develop effective strategic management accounting systems to identify, measure, and communicate value drivers Conversely, as these systems evolve, they can enhance the identification and communication of intellectual capital to support strategic objectives The challenge lies in creating strategic management accounting practices that align with a company's unique attributes and competitive strategies, necessitating precise identification and valuation of intellectual capital components In Vietnam, the adoption of advanced accounting techniques has been influenced by foreign enterprises, yet medium and large Vietnamese companies often lack understanding of strategic management accounting implementation Since the 2010s, this topic has gained attention in Vietnam, highlighting the need to study the relationship between intellectual capital, strategic management accounting practices, and corporate performance The Vietnamese business environment offers valuable insights into these practices, emphasizing the mediating role of strategic management accounting in linking intellectual capital to corporate performance.
Research questions and research objectives
The research gaps identified highlight the necessity to explore the impact of intellectual capital and strategic management accounting practices on corporate performance in transitional economies like Vietnam, where these topics remain under-explored This raises critical questions about the development of strategic management accounting systems that support intellectual capital to improve financial performance Furthermore, it is essential to understand how strategic management accounting can effectively manage intellectual capital to enhance an organization's financial outcomes Consequently, three research questions have been formulated to address these issues.
Research question 1: What is the direct effect of intellectual capital components on corporate performance in Vietnamese enterprises?
Research question 2: What is the effect of intellectual capital components on corporate performance in the presence of strategic management accounting practices?
Research question 3: How do strategic management accounting practices handle each component of intellectual capital to improve corporate performance?
This dissertation aims to empirically investigate the relationship between intellectual capital and strategic management accounting practices in relation to corporate performance It particularly focuses on the mediating role of strategic management accounting practices in the connection between various components of intellectual capital and three key financial dimensions of corporate performance Additionally, the research analyzes how strategic management accounting practices contribute to the effective management of intellectual capital components.
- RO1: Testing the direct impact of each of intellectual capital components on corporate performance
- RO2: Examining the direct influence of strategic management accounting practices over corporate performance
- RO3: Investigating an indirect path between intellectual capital components and corporate performance through the mediating role of strategic management accounting practices
- RO4: Empirically analysing which group of strategic management accounting practices (i.e strategic cost management, competitor accounting, strategic accounting and customer accounting) are related to manage which components of intellectual capital
- RO5: Providing additional evidence on the interconnection of intellectual capital components.
Research object and research scope
This dissertation examines the interplay between intellectual capital, strategic management accounting (SMA) practices, and corporate performance, focusing on business organizations as the primary unit of analysis Data is gathered through a questionnaire survey directed at SMA practitioners, with the informants being managers or top management members who possess expertise in accounting, planning, or finance, and have a minimum of two years of experience in their current organization Additionally, the research incorporates financial information from annual reports and financial statements, which provide insights into the relationship between intellectual capital and corporate performance.
This study is limited in three key aspects: it focuses on Vietnam, a developing Asian country with a transitional economy and collectivist culture; it examines enterprises listed on the Hochiminh Stock Exchange (HoSE) and Hanoi Stock Exchange (HNX) to facilitate financial data collection; and it relies on 2016 financial information regarding intellectual capital (IC) and financial performance, rather than using extensive panel data from multiple years, although data from 2010 to 2016 is utilized to calculate variables like organizational capital, innovation capital, and investment efficiency.
Methodology
This study reviews literature on intellectual capital, strategic management accounting practices, and corporate performance, leading to the development of two research models with six hypotheses Utilizing a quantitative research approach, it analyzes empirical survey and financial data from a sample of at least 127 public enterprises in Vietnam for the year 2016 Given the complexity of the research models, which include mediators, and the limited sample size, data analysis is performed using partial least squares structural equation modeling (PLS-SEM) with the assistance of SPSS 24.0 and SmartPLS 3.1 software.
Outline of the dissertation
Besides the parts of introduction and conclusion, this dissertation is organized with 7 chapters, as follows:
Introduction part This part states the background well as the research questions and objectives Then it briefly describes the research methodology and provides the research scope
Chapter 1: Literature Review explores the existing research on intellectual capital and strategic management accounting across various countries, including Vietnam This examination aims to identify research gaps that highlight potential directions for future studies, ultimately guiding the development of the research objectives for this dissertation.
Chapter 2 delves into the definitions and components of intellectual capital while exploring its relationship with corporate performance and strategic management accounting practices This section also introduces existing theories that support the measurement of intellectual capital, providing a clear understanding of the variables that will be examined in subsequent chapters.
Chapter 3 outlines the theoretical framework and the development of hypotheses, focusing on the conceptual basis necessary for formulating testable hypotheses related to two research models This chapter addresses key research questions aimed at bridging existing gaps in the literature and presents the rationale behind the establishment of six specific testable hypotheses.
Chapter 4 outlines the research methodology, detailing the development and operationalization of constructs within the theoretical model It explains the measurement techniques used, discusses the unit of analysis, identifies informants, and specifies the sample size for the study.
Chapter 5 focuses on the assessment of sample characteristics and measurement scales It begins by detailing the data collection process for constructing variables related to Strategic Management Accounting (SMA) practices and includes a pilot test to evaluate the attributes of these indicators prior to the main data collection The chapter then discusses the refinement of measurement scales based on data gathered from Vietnamese public enterprises Finally, it presents descriptive statistics of the research data and assesses collinearity issues within the inner structural models.
Chapter 6 focuses on data analysis and discussion, beginning with an evaluation of the theoretical models' fitness It presents empirical results that examine the hypotheses developed in Chapter 3, including direct and mediated path regressions conducted using SmartPLS 3.1 The findings are organized sequentially from the first to the sixth hypothesis, followed by the testing results of control variables Additionally, each significant proposition is analyzed and explained within a managerial context.
Chapter 7: Implications for managing intellectual capital by strategic management accounting practices The managerial implications of this study are outlined in this chapter
This article explores a three-stage value creation process derived from testing six hypotheses It offers valuable recommendations for leaders, policymakers, and the academic community on effectively managing intellectual capital The final section provides strategic guidance on managing intellectual capital through various strategic management accounting techniques.
In conclusion, this article summarizes the key findings, highlighting both theoretical and managerial contributions of the study It also addresses the limitations of the research and offers suggestions for future studies, paving the way for further exploration in this field.
LITERATURE REVIEW
Review of international studies of intellectual capital
As economies transition from industrial to knowledge-based models, a firm's value is increasingly assessed not just by financial results but also by the value derived from knowledge resources (Stewart & Ruckdeschel, 1998) This shift necessitates an understanding of how employees, stakeholders, and activities contribute to value creation, presenting challenges in identifying, measuring, and reporting intellectual capital (Dumay, Guthrie, & Ricceri, 2012) The rise of intellectual capital as a topic in the mid-1990s has led to a diverse body of literature across various research disciplines, resembling a research trend (Alcaniz, Gomez-Bezares, & Roslender, 2011), and has resulted in the continuous development of specialized journals, including the Journal of Intellectual Capital.
The International Journal of Learning and Intellectual Capital, along with the Journal of Human Resource Costing and Accounting, features prominently in numerous esteemed business and management publications, including those focused on Accounting, Auditing, and Accountability.
Journal, European Accounting Review, the Accounting Organizations and Society Journal especially important in the accounting discipline of intellectual capital measurement and management
1.1.1 Stages in developing intellectual capital as a research field
Understanding the historical context of intellectual capital (IC) is crucial to recognizing its significance as a key business element today Petty and Guthrie (2000) identified two stages of IC research: the first stage emphasized the importance of acknowledging IC's potential for creating sustainable competitive advantages and established initial guidelines for measurement and reporting, although lacking specific empirical studies Most research before the mid-1990s falls into this category The second stage focused on organizational-level evidence, exploring how IC contributes to value creation and refining the terminology around IC, leading to the identification of three main components Dumay et al (2012) noted that the emerging third stage critically examines the practical applications of IC, particularly its managerial implications, shifting from evaluating financial outcomes to understanding the broader value of IC, including its impact on customers and stakeholders This evolution in research highlights the multifaceted nature of IC and its essential role in modern business management.
Despite looking at three developing stages of IC, Guthrie (2001) provides a timeline of major IC research milestones, as summarized in Table 1.1
Table 1.1 Milestones of significant contributions to the identifications, measurement and reporting of intellectual capital
General notion of intangible value (often generically labelled
The “information age” takes hold and the gap between book value and market value widens noticeably for many companies
Early attempts by practitioner consultants to construct statements/ accounts that measure intellectual capital (Sveiby, 1989)
Initiatives to systematically measure and report on company stocks of intellectual capital to external parties (e.g The Swedish Coalition of Service Industries (SCSI) (1995))
Kaplan and Norton (1992) introduce the concept of a Balanced Scorecard The Scorecard evolved around the premise that “what you measure is what you get”
Nonaka and Takeuchi (1995) offer a significant contribution to the concept of "the knowledge creating company." While their book primarily focuses on "knowledge," it also draws important distinctions that are relevant to the field of Intellectual Capital, making it valuable for those specifically interested in this area.
In 1994, Skandia released a supplementary annual report titled "Visualizing Intellectual Capital," which evaluated the company's intellectual capital This innovative approach garnered significant attention from other companies eager to emulate Skandia's pioneering efforts in recognizing and valuing intellectual assets (Edvinsson & Sullivan, 1996).
Pioneers of the Intellectual Capital movement, such as Kaplan and Norton (1996), Edvinsson and Sullivan (1996), and Sveiby (1997), have published bestselling books that explore this important topic Notably, Edvinsson and Malone focus on the methodologies and processes involved in effectively measuring intellectual capital.
Intellectual Capital becomes a popular topic with researchers and academic conferences, working papers, and other publications find an audience
An increasing number of large scale projects (e.g the MERITUM project; Danish; Stockholm) commence which aim, in part, to introduce some academic rigour into research on Intellectual Capital
In 1999, the OECD convenes an international symposium in Amsterdam on intellectual capital (Organization for Economic Co-operation and Development (OECD), 2000)
Since the 2000s, research on intellectual capital (IC) has been increasingly shared with the broader accounting research community, leading generalist accounting journals and conferences to establish special editions dedicated to this topic.
IC accounting papers (Dumay et al., 2012)
There is an increasing trend on knowledge management research besides intellectual capital research (Dumay et al., 2012)
Source: Summarized by the author on the sources of Guthrie (2001) and Dumay et al (2012)
1.1.2 Research trends on intellectual capital in the accounting discipline
Intellectual capital is a crucial knowledge resource that requires effective management and can be analyzed from both microeconomic and macroeconomic perspectives It is examined through four key lenses: economic, strategic, managerial, and accounting (Alcaniz et al., 2011) From an economic standpoint, countries rich in intellectual capital, such as advanced technology and a well-educated workforce, tend to experience greater wealth (Stewart & Ruckdeschel, 1998) Strategically, a company’s success increasingly relies on its intangible assets rather than tangible ones, highlighting the reciprocal relationship between strategy and the accumulation of intellectual capital (Brooking).
From a managerial perspective, various types of capital—physical, financial, and intellectual—integrate to create an organization’s resources, necessitating effective identification and management as they underpin the organization's value (Bontis, 1999) This study emphasizes the complexities surrounding the accounting of intellectual capital Research by Dumay et al (2012), which analyzed 423 journal articles on intellectual capital from 2000 to 2009, indicates that while management accounting and external reporting dominate the focus of intellectual capital accounting research, there is a notable lack of literature addressing accountability, governance, and auditing.
Table 1.2 Topics of intellectual capital research in the accounting discipline
Table 1.2 presents the focus of research trends on intellectual capital in the accounting discipline, as follows:
External reporting on intellectual capital (IC) can be voluntary and non-quantitative, benefiting both firms and investors when linked to firm performance While extensive research has focused on IC disclosure practices in developed countries, there is significantly less research on emerging economies, particularly outside of Asia Existing studies have examined various media for IC disclosure, such as annual reports and corporate social responsibility reports, revealing variations in disclosure practices based on company size and industry sectors In Europe, findings indicate that approximately 49% of disclosures relate to relational capital, 30% to structural capital, and 21% to human capital.
A review of the literature indicates that the majority of prior studies on intellectual capital disclosure have relied on single-year data through content analysis, with only a few utilizing longitudinal data Notable researchers, including Bozzolan, Favotto, and Ricceri (2003) and Bharathi Kamath (2008), have conducted longitudinal studies to provide a more in-depth examination of intellectual capital disclosure practices.
Accountability and governance: Some papers (Keenan and Aggestam (2001); J
Li, Pike, and Haniffa (2008) investigate how corporate governance factors impact intellectual capital disclosure, employing diverse disclosure metrics Their research suggests that there are meaningful connections between intellectual capital disclosure in annual reports and various governance elements, including board structure, role duality, ownership concentration, audit committee size, and the frequency of audit committee meetings, while also accounting for factors such as listing age, firm size, and profitability.
Management control is a significant area of research, as evidenced by the 160 articles summarized in Table 1.2, which cover diverse management topics Key studies include the application of Balanced Scorecards for managing intellectual capital (IC) (Flamholtz, 2003; O'Connor & Feng, 2005) and the management of IC across various organizational contexts, such as service organizations (Namasivayam & Denizci, 2006), the banking industry (Puntillo, 2009), and the not-for-profit sector (Kong, 2009) Additionally, research has focused on mapping IC within organizations (Hellström & Husted, 2004), showcasing the breadth of management control literature.
Tayles et al (2002, 2007) advocate for the use of management accounting approaches to enhance the control of intellectual capital (IC) in service companies Their research highlights the effectiveness of management accounting techniques in managing IC, suggesting a shift away from traditional and zero-based budgeting towards the beyond budgeting concept Additionally, they recommend real options valuation as a superior method compared to capital budgeting for evaluating strategic IC investment opportunities (Neil & Hickey, 2001).
In the early 1990s, various performance measurement frameworks emerged to address the limitations of financial-only metrics, emphasizing the importance of intangible resources such as key customers, internal processes, and learning (Tayles et al., 2007; Amir & Lev, 1996) Notable models include the Intangible Assets Monitor (Roos, Edvinsson, & Dragonetti, 1997) and Skandia Navigator (Sveiby, 1997), both focused on intellectual capital, alongside the Balanced Scorecard (Kaplan & Norton, 1996), which offers a broader strategic perspective The Balanced Scorecard, for instance, incorporates relational capital from the customer perspective, as well as structural and human capital.
Review of international studies of strategic management accounting
In 1981, Simmonds advocated for the adoption of strategic management accounting (SMA) in his paper published in Management Accounting, sparking continued research on the topic This body of work has focused on four main themes: defining strategic management accounting, exploring SMA techniques across various industries and countries, analyzing the impact of strategic options on SMA adaptations, and examining the SMA process Despite extensive empirical research primarily based on questionnaire surveys over the last three decades, there remains a significant gap in understanding the practical application of SMA techniques, including who utilizes them and for what purposes.
1.2.1 Research on conceptualizing strategic management accounting
Strategic Management Accounting (SMA) lacks a universally accepted definition in the literature, but it is generally viewed as a bridge between strategic management and accounting (Roslender & Hart, 2003) Simmonds (1981) defines SMA as a holistic approach that integrates management accounting with strategy and a company's strategic positioning In contrast, Bromwich (1990) narrows the definition to focus on financial information related to competitive performance Additionally, some scholars argue that marketing plays a more significant role in SMA (Foster and Gupta, 1994; Roslender, 1995; Wilson, 1995) Overall, three primary conceptual approaches to SMA can be identified in the existing literature.
Simmonds (1981) emphasizes the importance of cost management in Strategic Management Accounting (SMA), aligning with Porter’s framework This approach highlights the necessity for businesses to gather financial information about competitors to effectively respond to their core competitors' strategies, particularly when focusing on low-price competitive strategies rather than product differentiation through design and innovation.
Bromwich's (1990) SMA approach utilizes an attribute costing technique that focuses on the benefits a product provides to customers, rather than merely analyzing the factors that drive product costs This perspective emphasizes the importance of understanding customer benefits and their role in establishing a sustainable competitive advantage.
Roslender and Hart (2003) emphasize the importance of integrating marketing concepts into Strategic Management Accounting (SMA), advocating for a balanced partnership between the two fields They highlight the need for "brand management accounting," which should encompass performance metrics like market share, market growth, brand strength, and customer profitability, with a focus on sub-brands and specific market offerings.
The term Strategic Management Accounting (SMA) has diverse interpretations influenced by researchers' backgrounds and assumptions, leading to a lack of consensus on its definition since Simmonds' initial concept over 30 years ago While some scholars focus on the intersection of accounting and marketing, others emphasize its connections to strategic management The 1990s, often referred to as "the glory decade," saw increased interest in SMA as academics, consultants, and practitioners contributed to its popularity (Langfield-Smith, 2008) According to Shank and Govindarajan (1993), various SMA techniques were trialed in US companies and documented as case studies or book chapters Additionally, professional journals featured SMA-related articles, and training programs by accounting bodies highlighted strategic management accounting tools and techniques.
Since 2008, global consulting firms have actively engaged in Strategic Market Analysis (SMA), leading to a range of definitions for the term These definitions vary from narrow interpretations focused on competitor analysis and performance measurement to broader perspectives emphasizing external orientation.
1.2.2 Research on strategic management accounting techniques
SMA practices lack a unified conceptual framework, leading to a diverse array of accounting techniques with a strategic focus Notably, there are significant overlaps in the classifications of these techniques, although distinctions can be observed in customer accounting and strategic accounting Despite varying research perspectives, techniques such as strategic cost accounting, competitor accounting, and strategic accounting are widely recognized as integral components of SMA practices Additionally, Guilding and McManus (2002) introduced three customer-focused techniques, highlighting customer accounting as a crucial fourth dimension However, the literature often overlooks this dimension, likely due to its later emergence and challenges in observation.
Table 1.4 Literature review of essential techniques in strategic management accounting toolbox
Strategic cost management Attribute costing
The valuation of customer group
Source: The author’s literature review
Recent studies enhance the literature on Strategic Management Accounting (SMA) by pinpointing key SMA techniques relevant to corporations and examining their dissemination based on structural characteristics A cluster analysis reveals performance disparities among different corporate groups, indicating that the adoption of SMA techniques varies significantly across firms For instance, Lachmann, Knauer, and Trapp (2013) note that many SMA techniques initially designed for the non-hospital sector are now implemented in hospitals, although commonly used methods like balanced scorecard and activity-based costing see only moderate application in this context Additionally, Cadez (2006) identifies that capital budgeting and competitor-focused techniques are the most prevalent, while customer-focused techniques rank as the least utilized.
1.2.3 Research on the relationship between environment, strategy choice and strategic management accounting practices
This article explores the role of strategic management accounting (SMA) within organizational contexts, emphasizing the principles of contingency theory It posits that organizational performance is influenced by the alignment between management accounting systems and relevant contingent factors, as highlighted in Cadez's (2007) research Furthermore, findings from Gerdin (2005) and Seaman and Williams (2011) indicate that SMA serves as a crucial tool for performance measurement, prioritizing strategic indicators over tactical ones to effectively support an organization's strategic objectives.
Research has explored the impact of competitive strategies and strategic management accounting (SMA) techniques on the performance of medium and large businesses Cinquini and Tenucci (2010) found that Italian manufacturing firms with sales over $25 million are more inclined to utilize SMA techniques focused on cost information when adopting defender and cost leader strategies Fowzia (2011) identified variations in the application of SMA techniques between cost leadership and differentiation strategies, as well as build and harvest strategies Furthermore, Aykan and Aksoylu (2013) examined the significant effects of competitive strategies—such as cost leadership, differentiation, and focusing—on businesses' perceived qualitative and quantitative performance, revealing that differentiation strategies and customer-oriented SMA techniques positively influence perceived qualitative performance.
1.2.4 Research on strategic management accounting process
Despite its significance, the literature on the process of Strategic Management Accounting (SMA) is notably less extensive than other research areas, which have been explored in numerous articles and conference papers Some researchers view SMA as a process and suggest that the application of SMA techniques can be categorized into distinct stages.
The Strategic Management Accounting (SMA) process is characterized by various interpretations and stages proposed by different scholars Dixon and Smith (1993) outline a four-stage SMA process that includes strategic business unit identification, strategic cost analysis, strategic market analysis, and strategy evaluation In contrast, Brouthers and Roozen (1999) simplify this into three key stages: monitoring, decision-making and planning, and controlling Additionally, Lord (1996) expands the SMA framework into a comprehensive six-stage process, highlighting the complexity and diversity of SMA methodologies in strategic management.
(2) Exploitation of cost reduction opportunities
(3) Matching of accounting emphasis with strategic position
(5) Exploitation of cost reduction opportunities
(6) Matching of accounting emphasis with strategic position.” (Lord, 1996, p 352)
Shah et al (2011) build on Lord's (1996) research by outlining the Strategic Management Accounting (SMA) process in four key stages: first, gathering competitor information; second, applying accounting insights for strategic decision-making; third, implementing cost-cutting measures based on these strategic decisions; and fourth, achieving a competitive advantage by identifying opportunities and making informed strategic choices While the interpretation of SMA usage may differ among researchers, it is largely influenced by their understanding of the strategic management process.
Strategic management accounting (SMA) has been a significant area of study for over 25 years, influencing practices, scholars, and the field of accounting Despite the growing interest in the management of intellectual capital and intangibles, there remains a lack of empirical exploratory research on this topic Recent studies have begun to focus on the management and reporting of intellectual capital, highlighting the importance of applying strategic management accounting practices to effectively oversee these intangible assets.
1.2.5 Review of studies investigating the relationship between strategic management accounting practices and corporate performance
Review of studies of intellectual capital and strategic management accounting in
Vietnam, a developing country with a large population, underwent significant changes in 1986 when individual entrepreneurs were allowed to engage in light industry, leading to economic reforms approved by the Sixth Party Congress These reforms have spurred remarkable economic growth, with an average annual GDP growth rate of 6.45% from 2000 to 2017, peaking at 8.48% in the fourth quarter of 2007 and dipping to 3.12% in the first quarter of 2009 (Trading Economics).
Vietnam's transition to a market economy has revealed significant challenges, including inadequate physical infrastructure, limited technological capabilities, and insufficient marketing and international business skills To enhance the competence of its workforce, improving education quality is essential Additionally, intellectual property protection requires more attention, as only around 25,000 products and services have been registered, highlighting a gap in industrial and mechanical design registrations For Vietnamese exporters to thrive internationally, they must acquire knowledge in banking, shipping, insurance, and marketing The success of Vietnam's economy hinges on the synergy of its structural and human capital, alongside fostering international relations and an openness to innovative policies Thus, prioritizing the development of intellectual capital is crucial for the future prosperity of Vietnamese enterprises and the nation as a whole.
Vietnam has emerged as a growing economy due to the rise of the private sector, the development of securities markets, and increased participation in international trade, with public enterprises accounting for 26.8% of the nation's GDP in 2015 As Vietnam integrates further into the global economy through agreements like the Trans-Pacific Partnership (TPP) and the ASEAN Economic Community (AEC), the competitive landscape for Vietnamese listed companies has intensified The influx of foreign companies brings positive effects, including the transfer of knowledge, skills, and infrastructure, which fosters innovation and development across various industries However, despite significant changes within organizations, there remains a lack of measurement and valuation of intellectual capital—encompassing human, structural, and relational capital—generated during Vietnam's international integration and competitive pressures.
1.3.2 Research on intellectual capital in Vietnam
Most intellectual capital research is primarily conducted in Western countries, with empirical studies emerging from regions such as North America, Germany, South Africa, Australia, Bangladesh, and China Additionally, several studies have been carried out in various Asian nations, including Malaysia, Taiwan, Singapore, and Thailand Despite the significant growth of emerging Asian economies, research on the role of intellectual capital in sustaining this rapid development remains limited, particularly in Vietnam, where the topic has not received sufficient attention.
Since the 2010s, international interdisciplinary accounting research conferences have provided valuable platforms for intellectual capital (IC) researchers to share and receive feedback on their work However, while some sessions focus on IC, most papers presented at conferences in Vietnam are authored by international researchers and do not adequately address the unique context of Vietnam A review of academic databases reveals a scarcity of relevant studies, with only one significant paper by Nga and Thomas (2005) discussing the role of IC in Vietnam's development across national, industrial, and firm levels, along with policy recommendations Additionally, a commentary by Nhon, Thong, and Van Phuong (2018) examines the influence of IC dimensions on firm performance but lacks empirical research This highlights the pressing need for more extensive research on IC in Vietnamese firms as they continue to develop this critical area.
Intellectual Capital (IC) practices in Western countries provide a comprehensive framework for measurement and management; however, the applicability of this knowledge to Vietnam's emerging economy remains uncertain International recommendations on IC may not seamlessly translate into Vietnamese practices Consequently, it is essential to conduct research to explore Vietnamese managers' understanding and perceptions of intellectual capital.
1.3.3 Research on strategic management accounting in Vietnam
Vietnam's economic transformation has significantly propelled the development of its economy and businesses, particularly through the integration of advanced accounting techniques aligned with market mechanisms Since the formal recognition of management accounting in the Accounting Law of 2003 and Circular 53/2006/TT-BTC, Vietnam has experienced notable stages of development in this field, despite its earlier global emergence Research into the Vietnamese management accounting system began in the early 1990s, exploring various distinct themes that highlight its evolving landscape.
Table 1.5 Research trends on management accounting in Vietnam
1990s The directions are related how to build the contents and organization approaches of management accounting system in Vietnamese enterprises (Duoc, 1997)
The author came up with organization solutions of management accounting nested within financial accounting (Dung, 1998)
The directions are how to build reports system of management accounting in Vietnamese enterprises (Quang, 1999)
In the 2000s, management accounting research focused extensively on specific industries, including manufacturing (Le, 2002), mining (Hoi, 2007), state-owned construction enterprises (Giang, 2002), transportation (Dinh, 2003), and the pharmaceutical sector (Thuy, 2007).
2010s Management accounting has been studied in association with the other research fields such as management of environmental issues (Thien, 2010), sustainable development reporting (Thien & Hung,
2016), corporate social responsibilities (Long, 2015), management control system (Tran, 2010), strategic decision making in market orientation and competition (Nguyen & Doan, 2016)
Strategic management accounting is directed how to implement in Vietnamese enterprises (Que & Thien, 2014)
The factors have facilitated the use of strategic management accounting in Vietnam – a transitional economy (Anh, 2010)
The authors have focused on only one of strategic management accounting techniques (i.e Strategic cost management (Hoa,
2014), Time-driven ABC (Thien, 2014), Lean accounting (Hoa,
2015), Balanced scorecard (Van, 2015)) to analyse the conditions resulting in the successful implementation
Source: The author’s literature review
Vietnam's economic, political, and social landscape significantly differs from that of Western nations and other Asian countries Since adopting an open-door policy, competition has intensified for Vietnamese enterprises, with a surge in private, joint venture, and wholly foreign-owned businesses over the past two decades This influx of foreign organizations has introduced valuable knowledge of strategic management accounting to local practitioners and scholars Consequently, the study of strategic management accounting in Vietnam began in the 2010s, yet there remains a lack of systematic documentation and analysis regarding the implementation of these practices.
In Vietnam, research indicates that small and medium enterprises primarily utilize traditional management accounting practices, while medium-to-large enterprises focus more on strategic management accounting to enhance decision-making Despite the significance of this topic in other countries, there is a lack of empirical studies exploring the effects of strategic management accounting practices on the performance of Vietnamese enterprises.
Research gaps
This study highlights three significant research gaps: the need for investigations into the performance implications of intellectual capital in relation to the mediating role of strategic management accounting practices, the lack of empirical research examining the relationship between intellectual capital and various strategic management accounting practices, and the absence of empirical studies in Vietnam focusing on the interplay between intellectual capital and strategic management accounting practices.
1.4.1 Lack of studies concerning performance implication of intellectual capital in association with the mediating role of SMA practices
Empirical studies in intellectual capital (IC) accounting research predominantly focus on the direct relationship between IC components and corporate performance, with limited exploration of their indirect effects Ittner and Larcker (1998) emphasize the necessity for management to identify and communicate value drivers, suggesting that organizations with robust IC should align their management accounting with strategic goals However, Tayles et al (2007) note a gap in research regarding how firms with high IC levels have developed their strategic management accounting practices to enhance corporate performance While existing models often examine the indirect path between strategy and performance through management practices, few studies, like Asiaei, Jusoh, and Bontis (2018), have analyzed the mediating role of these practices in the IC-performance relationship As highlighted by Alcaniz et al (2011), the literature on IC often reiterates the direct relationship with performance, indicating a need for further investigation into both direct and indirect effects of IC on corporate performance via strategic management accounting practices.
1.4.2 Lack of empirical research concerning the relationship between intellectual capital and each group of SMA practices
A literature review on intellectual capital highlights a significant gap in understanding the role of management accounting in high intellectual capital organizations As noted by Roslender and Fincham (2001), while there is a call for professional accountants to adopt a strategic management accounting approach, the empirical academic literature lacks clarity on how management accounting practices evolve in response to the value drivers of intellectual capital This gap emphasizes the need for further exploration into how strategic management accounting can effectively manage intellectual capital, particularly as organizations adapt their strategies and practices to leverage strategic intangible assets.
1.4.3 Lack of Vietnamese empirical studies on intellectual capital and SMA practices
Most research on intellectual capital and strategic management accounting (SMA) practices has been primarily conducted in developed Western nations and select Asian countries, including China, Malaysia, Taiwan, and Hong Kong, while there is a notable lack of studies in developing Asian countries with transitional economies, such as Vietnam Despite the widespread assertion in Western literature that intellectual capital is a crucial driver of superior performance, there is a scarcity of research validating these claims in the context of developing nations, where business environments tend to be significantly more unstable.
Vietnam Vietnam may differ from Western countries in terms of culture, economy and political environment that influence the progress of IC development (Nga & Thomas,
2005) as well as the orientations how to implement strategic management accounting (Loi,
The relationship between culture and strategic management accounting reveals a contrast between Vietnam's collectivism and Western individualism, prompting the inquiry into whether this cultural distinction affects the implementation of strategic management accounting in Vietnam Despite numerous international studies highlighting the advantages of strategic management accounting (SMA), there is a lack of empirical research specifically examining the correlation between SMA practices and corporate performance within the Vietnamese context Thus, investigating the impact of SMA practices on the performance of Vietnamese enterprises could enhance understanding of the effectiveness of SMA in transitional economies compared to its consistent benefits observed in Western settings.
Despite extensive research on the value relevance and market valuation of intellectual capital in various countries, the performance of intellectual capital remains under-explored in Vietnam This gap can be attributed to two main challenges: first, Vietnamese enterprises often fail to provide comprehensive accounts of their intangible investments, with many expenditures being expensed rather than capitalized, and disclosure on these expenditures being inadequate Second, a lack of recognition among Vietnamese managers regarding the critical value of intellectual capital in their management practices has hindered research in this area Consequently, few researchers in Vietnam have examined the performance implications of intellectual capital.
Researching intellectual capital and strategic management accounting within the context of Vietnam's transitional economy can significantly enhance existing literature in this field.
Chapter 1 reviews the international studies and Vietnamese studies in terms of intellectual capital, strategic management accounting, corporate performances and their mutual relationships to identify research gaps for this research
While empirical studies primarily examine the direct link between intellectual capital components and corporate performance, there is a notable lack of research exploring the indirect relationship facilitated by strategic management accounting practices Furthermore, existing academic literature offers limited insights into the specific role that strategic management accounting plays in relation to intellectual capital.
Intellectual capital plays a crucial role in maintaining the competitive advantages of economies and firms worldwide While research on intellectual capital began in the 1980s, studies specific to Vietnam remain limited, highlighting a significant gap in understanding this concept within the Vietnamese context Therefore, a comprehensive study exploring the relationship between intellectual capital, strategic management accounting practices, and corporate performance in Vietnam is essential This research aims to enrich Vietnamese literature and enhance theoretical frameworks related to intellectual capital management through strategic management accounting practices.
The upcoming chapter defines intellectual capital and its components while exploring corporate performance and strategic management accounting practices It also presents existing theories that support the measurement of intellectual capital, laying the foundation for developing IC variables in Chapter 3.