The Effect of Differentiation Strategies, Environment Uncertainty, and Contemporary Management Accounting Practices on Performance of Hotels in Indonesia

In the current intense business environment, contemporary management accounting practices (MAP) can benefit the organizations in achieving competitive advantages. However, most empirical evidences on contemporary MAP and its relation to contingent factors are centered on manufacturing industry. The purpose of this study is to investigate the role of contemporary MAP on the relationship between (1) differentiation strategy and performance and (2) environment uncertainty and performance in service industry i.e., hotel industry. Assessment on these contingencies relationships are tested with a path analytical model using AMOS 18. Data are collected using survey questionnaire from 65 hotels which have 3 – 5 stars status in Indonesia. The research findings reveal the existence of a significant and positive association between differentiation strategy and hotel performance through high use of contemporary MAP. In contrast, the study found no significant relationship between environment uncertainty and hotel performance through the same practices. The findings indicate that the design of contemporary MAP in hotel industry is much influenced by internal contingent factor that can be controlled by the hotels.