Management accounting is an important component of managerial decision-making to help guide the

overall business strategy in organisations. Appropriate measures of management accounting practices

(MAPs) allow academics and practitioners to assess the organisations’ MAP adoption effectively. In this
study, based on qualitative information disclosed in annual reports from 2003 to 2019, we construct and
validate novel and comprehensive measures of firm-level MAPs using the word embedding model
Word2Vec. We illustrate the predictive validity of our measures by examining the determinants and
value creation function of fitted MAPs. Our novel measures of MAPs not only provide a solid foundation
for large scale sample empirical analyses of management accounting research but also pave a new way
to investigate MAPs as a package. c. Contingency Theory: The contingency viewpoint developed in 1950s
when a research team headed by Joan Woodward, an industrial sociologist, studied 100 British firms of
different sizes producing different products. Better performing companies were compared with average
or below- average performing companies to know the reasons why they performed better. It was
concluded that difference in performance of those companies was not because of principles of classical
theories but because of better technology to produce goods. This developed a theory that ‘appropriate
actions by managers often depend on (or are contingent on) the situation’. According to classical theory,
if management wants to get the best out of workers, it should increase wages or relax working
conditions. The behavioural school of thought emphasises on human needs to maximise their
contribution to organisational output. Contingency approach is synthesis of the two. It does not
advocate either of the two to be universally applicable. It depends on the situation. If workers are
skilled, participative style of management or behavioural theory can be effective but if workers are
unskilled or their physiological needs are more important than the higher-order needs (self-actualisation
needs), classical theory will be more appropriate. “Contingency theory is a viewpoint that argues that
appropriate managerial action depends on the particular parameters of the situation. Hence, rather
than seeking universal principles that apply to every situation, contingency theory attempts to identify
contingency principles that prescribe actions to be taken depending on the characteristics of the
situation.” Each organisation is unique, each problem is unique, each decision is unique and, therefore,
the way of tackling every situation is also unique. Every decision or solution depends upon the variables
that affect the situation. Different situations call for different decisions. There is no best way of doing
things universally in all situations.