EXPLORING MANAGEMENT ACCOUNTING PRACTICES (MAPs) AND BUSINESS PERFORMANCE OF SMES IN THE MALAYSIAN BATIK INDUSTRY: TRACKING THE EFFECTIVENESS OF MAPs

Abstract

This conceptual paper seeks to analyse the relationship between Management Accounting Practices (MAPs) and business performance in Small and Medium Enterprises (SMEs) in the context of Batik industry in Malaysia. Due to the particular cultural and economic significance of batik to Malaysia, this paper suggests that the adoption and use of MAPs can have considerable positive effects on efficiency, profitability, and sustainability of SMEs in batik industry. The paper examines and elaborates how MAPs, such as cost control, budgeting, performance evaluation, and financial analysis, are incorporated in batik production can improve business decisions, enhance operational efficiency and provide a competitive edge to the industry, so as to align with the available literature about MAPs and business performance. In addition, it also examines the barriers to the adoption of MAPs by SMEs in batik industry and proposes ways to mitigate them. By identifying and explaining the link between MAPs and enhanced business performance, this paper adds to the existing discourse on the role of management accounting in traditional craft-based industries and suggests areas for further studies and practical work in the industry. This paper also explains the limitations of Batik Industry’ adoption of MAPs as well as methods to overcome these limitations. This article attempts to improve the understanding of management accounting's role in traditional and craft-based industries along with providing suggestions for further research and practice by giving a possible explanation for the connection between MAP and enhanced business performance.