IMPACT OF MANAGEMENT ACCOUNTING PRACTICES ON PERFORMANCE OF HOTEL BUSINESSES IN SRI LANKA

Abstract

Management Accounting Practices (MAPs) are used by organizations in order to make proper decisions and to compete in the current competitive environment. Since the problem of lack of information for decision making in Hotel sector businesses, the study approached to explore the impact of management accounting practices on performance of Hotel businesses in Sri Lanka. Descriptive survey design was used to achieve the objective of this study. The target population was classified and unclassified 389 hotels in Sri Lanka and 105 hotels were selected as sample using stratified sampling method. Five categories of management accounting practices were identified as costing management practices, strategic analysis, information for decision making, performance evaluation system and budgeting management practices. Primary data were collected from the respondents via a questionnaire. Collected data was analyzed using a correlation and regression analysis. The findings revealed that the Information for decision making category is the most highly used MAP among hotels in Sri Lanka. Budgeting management practices, Performance evaluation system, Costing management practices and Strategic analysis were also used as second highest to lowest respectively. The study further found that there are high significant positive correlations between selected variables and performance of hotels. While regression analysis revealed that all the selected MAPs have a significant positive impact on Performance of Hotel businesses in Sri Lanka.