Opening the black box of management accounting information exchanges in buyer–supplier relationships

The purpose of this paper is to explain the reasons why collaborating firms “open their books” and share management accounting information. We investigate the effect of variables related to the tasks and relationships of single individuals of the partner firms (i.e., task interdependence and analysability, team interdependence and relationship duration) on open book accounting (OBA). Our model controls for firm-level variables (i.e., asset specificity, degree of economic dependence, contract presence, contract comprehensiveness, and firm size) known to influence management accounting information exchanges. By using social network analysis (SNA), the data collected from a fashion firm and its entire set of suppliers shows that the quantity of management accounting information is positively related to task interdependence while having an inverted U-shape relation with the duration of the relationship. In addition, it provides evidence of a positive association with task analysability, whereas we find no relation with team interdependence. The analysis also confirms the importance of firm-level factors in explaining the exchanges of management accounting information. Our conclusions have important implications for the design of OBA in inter-organisational relationships.

► We explain the reasons why collaborating firms “open their books” and share management accounting information.
► We develop a model that includes the specific tasks and activities carried out by individuals at the collaborating firms.
► We test our hypotheses using social network analysis (SNA).
► Our evidence is based on a whole network of managers of a fashion firm and its suppliers.
► Data show that task interdependence, task analysability, and the duration of individuals’ relationships have a strong explanatory power for the use of management accounting information in inter-organisational relationships.