JOURNAL OF INTEGRATED ACCOUNTING

RESEARCH Vol.11 No.2, October 2018 Page. 159-176

EFFECT OF DELEGATION OF AUTHORITY TO PERFORMANCE ORGANIZATION

Galina Dawn Muttaqin

Faculty of Economics and Business, University of Sultan Ageng Tirtayasa
[email protected]

Abstract

The purpose of this study is to Determine the Effect of Delegation of Authority on Organizational Performance
with Change of Management Accounting System as an intervening Vari- Able. This research was conducted at
the Manufacturing Company located in Serang District. As the object of his research, the middle manager with
125 questionnaires spread, but the question- Naire that can be processed as much as 72 questionnaires (58%).
The questions questionnaire measured with a scale of 1-5. Data were Analyzed by using SEM (Structural
Equation Model) through SmartPLS (Partial Least Square) 2.0 versions. The results of this study indicate (1)
Delegation of authority has a positive effect on Management Accounting System Changes, (2) Changes in
Management Accounting System has a positive effect on Organizational Performance,

Keywords: Authority Delegation, Management Accounting System, Organizational Performance

Abstract

The purpose of this study was to determine the effect of Delegation of Authority on Organizational
Performance with Changes in Management Accounting System as an intervening variable. This research was
conducted in Manufacturing Company located in Serang District. As an object of study, middle managers with
125 questionnaires spread out, but the questionnaire which can be processed as much as 72 questionnaires
(58%). The questionnaire measured with a scale of 1-5. Data were analyzed by using SEM (Structural Equation
Model) through SmartPLS (Partial Least Square) version 2.0. The results showed (1) The delegation of authority
has a positive influence on changes in Management Accounting System, (2) Changes in Management
Accounting Systems positive effect on Organizational Performance, and (3) Delegation of Authority positive
effect on the organization.

Keywords: Authority Delegation, Management Accounting Systems, Organizational Performance

Galina Dawn Muttaqin 160

PRELIMINARY
The survival of the company depends on the company's ability to meet the needs of the people.
Company engaged in manufacturing is one company that has a complex entity in which there are number of
changes in the competitive environment,
system
every moment can threaten the growth of the company (Ikhsan, 2003) .Krisis economy sustained from 1997
to the present have triggered changes environment in market so that Consequently companies are
increasingly exposed to
improve their management, improve the quality of products or services, maintain the sharpness of their
instinct to changing consumer needs, able to exploit new markets, entering new business fields and
developing new efforts to innovate (Coryanata, 2011).

The increasing intensity of competition led to senior management of companies delegate authority
kepeda division manager or manager level down to handle the daily affairs of the company (Hoque,
2011). delegation of authority
necessary to facilitate the activities of the management company (Daft, 2002: 397). Assignments to a reliable
manager lead a manager need to design a good accounting management system to provide information

relevant. Accounting management system is an important instrument to support management must follow
the changes so that the information presented is relevant and can be used by management is not just for the short
term but can be used in the long term (Herliansyah et al, 2005). In people's daily life is inseparable from the cultural
ties.
Cultural ties created by
communities concerned, whether in families, organizations, businesses and nations.
Culture distinguishes people from one another to interact and act complete a job. Culture binds
members of the community into a single view of uniformity creates behave or act (Robert and Angelo, 2005).
The decision-makers feel that the design of the system is increasingly important that the planning
management accounting system which is part of the management control system received attention. One of
the tools used by management to help address business competition is a management accounting system

amenities function support

generate information that is relevant and timely for planning, control, decision making and performance
evaluation (Gordon and Miller, 1976) in Susanto and Gudono (2007).

This information allows management to implement strategic and operational activities necessary to
achieve the organization's overall objectives. accounting system management is a surveillance mechanism
which can facilitate monitoring organization by making reports and creating tangible actions on performance
appraisal of
every
component in the organization (Chia, 1995) in Budiarto 2 (2004). information system
accounting management is required to facilitate the control and action
the assessment of the organization.
On basically dimension accounting system Management consists of four
characteristics information that is: broadscope, aggregation, integration, timeslines. result
Mia research and Clarke (1999) states that the use of information systems
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management accounting can help managers and organizations to adopt and implement their plans in response
to the competitive environment. According to Mia and Clarke (1999) several studies in Australia, published in The
Australian Financial Review in 1995 had concluded that the more intense market competition, the performance of
the organization for the better, in Faisal and Prabowo (2006). Previous studies regarding the changes MACS
(Management of Accounting Control System), most discussed changes MACS as

variable dependent
(Libby and Waterhouse, 1996); (Williams and Seaman, 2001); (Williams and Seaman,
2002); (Mia and Clarke, 1999); (Baines and Langfield-Smith, 2003); (Isa, 2007); (Waweru,
2008); (Verbeeten, 2010); (TuanMat, Smith and Djajadikerta, 2010). However, the present study that draws on
research Hoque (2011) regarding the MACS changes are as
variable intervening in the relationship between the intensity of competition and performance

organization.

Previous research from Govindarajan (1984); Mia and Clarke (1999), and Hoque (2011) which states that there is
a positive correlation between the intensity of competition with business unit performance, but research Khandwalla,
(1972) revealed a negative correlation between the profitability of the company and product level, and a network of
market competition.

LITERATURE AND DEVELOPMENT HYPOTHESIS

Contingency theory states all the components of an organization should be a match or fit between one
another. In the accounting management system, contingency theory is based on the general premise that
there is no universal control system which is always appropriate to be applied to the entire organization in
every state (Otley, 1980). This means that the design of the various components of the accounting system
depends on the particular contingencies or it can also be said there is a suspicion that there

Other situational factors that can affect a condition

certain.
The view of the organizational and managerial stated that the organization is a system consisting of
subsystems between the organization and the environment and assert forms of variables, put various
properties of the organization and trying to understand how an organization operates under a variety of
conditions and in special conditions. So that in the end can be directed to achieve the expected
rancanganrancangan organization and appropriate management responses on specific conditions (Marina,
2009 in Utami 2012). Researchers have many contingencies apply theory to analyze and design the control
system (Otley, 1980), especially in the field of management accounting. Some contingency variables used in
research on management accounting systems, among others Cultural Organization, intensity of competition
(Hoque, 2011; Faisal & Prabowo, 2006) and delegation (Abdullah & Adm 2009; Hoque, 2011).

Contingency theory used by researchers because they want to know the level of reliability of a
management accounting system in a variety of conditions. On the basis of the contingency theory also raised
allegations that there are other situational factors that may interact in affecting a particular condition. Starting
from the contingency theory appear likely to lead to differences in
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management accounting information needs that should their delegation and renewal or change of
management accounting system.

Delegation of Authority
According Hasibuan (2007: 68 ), Delegation of authority is to provide partial
work or authorized by delegator ( giving authority) to delegate ( recipient authority) for doing on behalf of
delegator
, According to Stoner (2000: 434) in Kesumnajaya (2010), delegation of authority is the delegation of formal
authority and responsibility to a subordinate to complete certain activities. Delegation of authority is a
consequence of the growing organization. When the boss facing a lot of work that can not be done by one
person, then he needs to do delegation. Delegation is also done so that leaders can develop subordinates to
further strengthen the organization. Based on the opinion of some experts, it can be concluded that the
authority is granting the authority and responsibility to the people appointed by the authority.

Bosses give power to the staff or subordinates so that subordinates can carry out his duties as well as
possible, and to account for things that are delegated to him. Delegation of authority by superiors to
subordinates is necessary to achieve the efficiency of the functions in the organization, because no one any
boss can personally completed or fully implement and oversee all organizational tasks. Delegation of authority
has a huge influence in an organization. Without delegation of authority will lead to delays in achieving the
objectives of the organization activities.

Delegation of authority is the assignment of authority and responsibility answer

to subordinates. With the delegation of authority means that all decisions are not centralized in top
management. The fundamental component in the process of delegation of authority is the determination of the
expected results, the determination of duties and responsibilities clearly to achieve the results that had been
expected and accountability results
which has been achieved. Effectiveness delegation is
The main factor which contrasted successful manager and are not successful.

Management accounting

Management accounting system is a control mechanism of the organization, as well as a pretty effective
tool in providing useful information in order to predict the possible consequences of the activities that can be
done. One of the products produced by the accounting system of management is management accounting
information such as expenses incurred in the operations department, the calculation of production costs,

services, activities. Information management is a resource accounting

The main information for the company. Information management accounting generates very useful information
to help workers, managers, and executives to make decisions better. Simply put management accounting
information
are dominated by information financial, but in The current development of non-
financial information is also very crucial. Meanwhile, according to research conducted in Mutamainah Chia
(2009: 18) mengemukakakan that manjemen accounting system is a monitoring mechanism which can
facilitate monitoring organization by making reports and creating
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actions that significantly affect the performance assessment of each component in an organization as well as
an effective tool in providing information that is useful in predicting the possible consequences of the various
alternatives that can be done.

According to Hansen and Mowen (2000) objectives of management accounting system is as follows:

a. To provide information used in the calculation of the cost of services,

product and other desired destination management.
b. To provide information used in planning, controlling,
and evaluation.
c. To provide information that is useful in decision making.

According Chenhall and Morris (1986) found empirical evidence of characteristics of useful information in the
managerial perception that is comprised of information Broad Scope, Timelines, Aggregation, and information that
has the nature integrasi.Menurut Nazaruddin (1998) general criteria regarding the characteristics of good information
can be described as follows:

a. Information Broad Scope accounting system management is information that the dimension focus, time
horizon and qualifications. Information broad scope
provide information about external factors or internal, economic and non-economic information, estimates
of incidence that may occur in the future, information related to environmental aspects. Organizations that
embrace decentralized system managers need information broad scope as one of the implications and
increased authority, their responsibility as the control system. Organizations that embrace a centralized
system managers only duty of the employer or supervisor ( they are just as executor), so that in this
organization information broad scope tidk are required when compared with today's decentralized
organization. Decentralization will encourage managers to develop competencies in

in
Companies that will push them towards improving performance, for that they need information broad
scope to support their competitiveness. Information Broad Scope also can meet the needs of managers
to certain information, because every manager requires different information between managers each
other majer in accordance with their respective functions.

b. Timelines information is timely information. Punctuality

indicates the interval between the request for information with the desired information presentation and
information delivery frequency. Timely information will affect the ability of managers to respond to any
incident or problem. if the information
This was delivered not in a timely manner will
The information resulting loss in value in influencing the quality of decisions. Information delivered in a
timely manner will also memabantu managers to face the uncertainties that occur within their working
environment. The decentralization of the response of the uncertainty of the environment and the
increasing complexity of conditions administrativ organization. Decentralization in an organization needs
to be supported by the availability of timely information. Timely information needed by managers in
order to respond
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any existing problems and anticipate environmental uncertainty. This is in line with the statement of some
researchers who claim that a high level of decentralization should be supported with timely information.
So from the above description can be concluded that at the decentralized level is high then timely
information will increasingly positive effect on managerial performance, because managers are able to
respond to every incident appropriately.

c. Aggregation of information is the information notice application form or a formal policy is based on the
information that the final analytical results are based on the functional areas (such as marketing,
production, etc.) or based on time (eg monthly, quarterly, etc.). Aggregation of information required by
today's decentralized organizations because it can prevent

overload information. Appropriately aggregated information can provide important input in the
decision-making process, because of the time needed to evaluate be less than the disaggregated
information because it is not organized or information in its raw form. For

organization decentralization, managers require information

corresponds to an area or unit which they have responsibility. The need to reflect the will of information
related to their area of responsibility derived from information that has been aggregated. Clear information
about the area of responsibility of functional managers, can reduce the likelihood of conflict. The existence
of information aggregation lead managers will more quickly respond to any problems
that arise in the area of responsibility and will further increase the responsibility of the manager.
Aggregation of information is also very useful when used to evaluate performance. Based on the
description above can be concluded that if the company

give level
a high authority then aggregated information is necessary, because the aggregation of information
providing information on their area of responsibility so as to reduce the possibility of conflicts and to
avoid managers of
information that overload. In addition to the information
delivered on the characteristics of the aggregation of information is delivered in a more compact form
but still includes the essential things that do not reduce the value of the information itself. Aggregated
information will serve as a useful input in the decision making process because less time is needed to
evaluate them, thus improving the work efficiency of management

d. This integrated information can reflect that there is coordination between

sub-unit segments with each other. This integration information includes aspects such as the provision
targets or activity which is calculated from the interaction between sub-units within the organization. The
complexity and interdependence or linkages sub-units of the other sub-units which will be reflected in
the integration of information. The more segments in the sub-units within the organization, then that is
the integration of information will increasingly dibutuhakan. Information of this integration will be
instrumental in coordinating policies within the organization that have a high degree of decentralization,
in order to achieve harmony in achieving the main objectives of the organization. This integrated
information is also very helpful for managers when the managers are faced to do dicision making which
may also affect other sub-units. The integration of information also indicates the nature of transparency
Galina Dawn Muttaqin 165

information on each manager, for information about the impact of the policy on the other unit is
reflected in the information integration. Their information will lead managers to consider the elements of
integrity in the conduct of job evaluation.

Organizational performance

An organization or company if you want to advance or developing it is required to have qualified

personnel. Qualified employee is an employee whose performance can meet the target or targets set by the
company. To obtain the employees who have good performance will require the application of kinerja.Ukuran
performance can be seen from the side of a certain quantity and quality according to the standards set by the
organization or company forms can be tangible ( can set the measuring instrument or standard)

or intangible (Can not tool set measuring or default), depending on the shape and
implementation process of the job. The performance generated by employees in a company is determined by
several factors and conditions that either it comes from within the employee or from outside of the individual
employee. Mangkuprawira and Hubeis in his book Human Resources Management ( 2007: 153) says that the
performance is a result of a planned process specific job at the time and place of the employee as well as relevant
organizations and Hubeis Mangkuprawira (2007: 160) states that the employee's performance is influenced by
intrinsic and extrinsic factors employee. Intrinsic factors that affect employee performance consists of education,
experience, motivation, health, age, skills, emotional and spiritual. While extrinsic factors that affect employee
performance consists of physical and non-physical environment, leadership, vertical and horizontal
communication, compensation controls in the form of supervision, facilities, training, workload, working
procedures, the system of punishment and so on. Further Mangkuprawira and Hubeis (2007: 155) describes the
following factors: a) Personal factors,

Another definition comes from Murpy and Cleveland in Pasolong (2007: 175) says that, performance is
the quality of task-oriented behavior and work. This means that the performance of employees in an
organization is determined by the attitude and behavior of employees to work
and orientation employee in implementing
the job. Performance by Armstrong and Baron (1998: 159) as quoted by Wibowo (2008: 222) is about doing
the work and results of the work. Performance is the result of work that has a strong relationship with the
organization's strategic objectives, customer satisfaction and contribute to the economy. According
Simanjuntak (2005: 221), the definition of performance is the level of achievement of results on the
implementation of certain tasks. The performance of each person is influenced by many factors
Galina Dawn Muttaqin 166

can be classified pad three groups, namely the competence of the person concerned individual, organizational support,
and management support (Simanjuntak, 2005: 210).
Performance is the product of administrative activities, namely cooperation activities to achieve goals
that management is commonly referred to as management. While the organization is a group of people (two
or more) are more formally united in a partnership to achieve
objectives that have been adopted by. so the performance

the organization is working results obtained within an organization in achieving its intended purpose. According
Keban, said that the performance ( performance) in the organization is defined as the level of achievement of results "The
degree of accomplishment" or performance is the achievement of organizational goals tinkat berkeseimbangan (Keban,
2003: 43). According to Steers understanding organizational performance is the level that indicates how far
the implementation of the tasks can be run in actual and achieve organizational mission (Steers, 2003: 67).
Meanwhile, according to the performance Mahsun is an overview of the level of achievement of the implementation
of an activity / program / policy in achieving the goals, objectives, mission and vision of the organization as stated in strategic
planning an organization (Mahsun, 2006: 25).

Previous discussions about the delegation concluded that the delegation of authority
creating an opportunity for managers to change the MACS be they need (Abernethy & Bouwens 2005).
Another view of (Thompson, 1967) the deployment of decision making authority in decentralized business
units delegation promoting the tendency towards innovation.

This means that with an increase in the delegation of authority, MACS in the company will be amended
so that the management and employees to adopt new skills and innovation that are involved with increased
levels of delegation. Kaplan and Atkinson
(1998) contend that delegated managers need information
reliable about their products and services so that decisions can be made to meet local needs. Consequently,
managers need well-designed MACS where the relevant information is processed and used. This discussion
led to the prediction that increased on the delegation of authority that may be associated with a company's
efforts to change the existing MACs. This idea was formally expressed in the following hypothesis:

H1: Delegation of authority is a positive influence on changes in the system

management accounting.

Changes in accounting management system enables managers to obtain the necessary information to
make economic decisions (Chenhall & Morris, 1986; Mia & Chenhall, 1994). Contingency theory of management
accounting choices indicate that companies tend to work more effectively if they implement and use
accounting management system in accordance with the environmental situation and their social organizations
(Otley, 1980; and Chenhall, 2003). Seaman (2006) in his study showed a significant positive correlation system
change control and management accounting on organizational performance. Likewise in Hoque study (2011)
showed a positive relationship between management accounting system with performance.
Galina Dawn Muttaqin 167

and adjustment so that the resulting information can have a positive impact on the performance of the
company or even rise better. Based on the above hypothesis in this study:

H2: Changes in management accounting system positively affects performance

organization.

Previous research Prendergast (2002) showed that a larger delegation providing incentives for lower-level managers to make better decisions,

which in turn can lead to increased performance of the company. With the delegation of authority, the business unit to focus on timely response to local

customers and other stakeholders, since they do not have to wait for approval from a higher authority to make business decisions. Kaplan and Atkinson

(1998) shows that decentralization managers become more motivated and interested in their work when they are allowed more discretion in carrying out

their duties. Decision-making at the local level to encourage managers to be more aggressive in their acquisitions of local information and more strategic

in their actions, This argument implies that both economic and strategic decisions by the lower-level managers, the better the performance of companies

in Hoque (2011). Other research Salam (2013) menyataka that delegate power to lower-level managers who have influence positively related to

performance, so that the problems facing the company can be resolved. In the above explanation can be said that at the time of the events of uncertain

need for transfer of authority or authorities authorized the bottom level managers to make quick decisions and precise so that the performance of the

company can run well. Based on the above hypothesis in this study: the better the performance of companies in Hoque (2011). Other research Salam

(2013) menyataka that delegate power to lower-level managers who have influence positively related to performance, so that the problems facing the

company can be resolved. In the above explanation can be said that at the time of the events of uncertain need for transfer of authority or authorities

authorized the bottom level managers to make quick decisions and precise so that the performance of the company can run well. Based on the above

hypothesis in this study: the better the performance of companies in Hoque (2011). Other research Salam (2013) menyataka that delegate power to lower-

level managers who have influence positively related to performance, so that the problems facing the company can be resolved. In the above explanation

can be said that at the time of the events of uncertain need for transfer of authority or authorities authorized the bottom level managers to make quick

decisions and precise so that the performance of the company can run well. Based on the above hypothesis in this study: so that the problems facing the

company can be

resolved. In the above explanation can be said that at the time of the events of uncertain need for transfer of authority or authorities authorized the bottom level man

H3: Delegation of authority is a positive influence on organizational performance.

RESEARCH METHODS

1. Population and Sample

In this study, researchers used a sampling technique is purposive sampling. By purposive sampling is a
way of sampling carried pick subjects based on specific criteria set forth researchers. The criteria for selection of
samples in this study are:

1. The company manufactures medium scale up.

2. The manufacturing company located in the district. attack
3. The manager in charge of planning, monitoring and decision makers in the company.

2. Test Data Analysis Outer Model (Measurement

Model)
Variable Delegation of authority is explained by the 8 indicators consisting of D1 through D8 shown by
Figure 4.1. test against outer loading aims to see the correlation between score items or indicators to scores konstruknya.
indicators considered
Galina Dawn Muttaqin 168

reliable if it has a correlation value above 0.7. However, during the development phase correlation of 0.5 would
still be acceptable (Ghozali, 2012). Based on processing in software Smart PLS, Value Outer Loadings Variable
Delegating authority can be described in table 1 as follows:

Table 1.
N use values Outer Loadi n gs variable Pen d elegasian Wew enang
Original Sample Mean of Standard t-Statistic

Indicator P We endelegasian treatment

estim te subsamples Deviation

D1 0820 0799 0089 9199

D2 0813 0797 0079 10 320
D3 0953 0938 0020 46 990
D4 0929 0916 0048 19,340
D5 0912 0893 0051 18 022
D6 0921 0912 0023 39 475
D7 0608 0640 0111 5,475
D8 0919 0893 0029 31 815
Sources: Primary data is processed by Smart PLS, 2018

Results of processing by using Smart PLS can be seen in Table 1, where the value of outer loadings delegation of
indicator variables there are no values less than
0.5 and demonstrate the value outer models or correlation with the overall variable already meet Convergent
validity. It can also be seen in Table 1, where the value of the indicator tstatistik D1 through D8 greater than t-
table (level sigifikansi = 1.96 and sample n = 72). So it can be concluded that the variables of the delegation of
authority has been qualified on the adequacy of the model or discriminant validity

PSAM variable is explained by the 7 indicators consisting of PSAM1 until PSAM7 shown in Table 2. Test
against outer loading aims to see the correlation between score items or indicators to scores konstruknya.
Indicators are considered reliable if the value of correlation above 0.7. However, during the development phase
correlation of 0.5 would still be acceptable (Ghozali, 2012).

table 2
Value oute r Loadings Vari a bell perubaha n SAM
Sample
Original Mean of Standard t-Statistic
Estimate subsamples Deviation
SAM change indicators
PSAM1 0744 0754 0078 9543

PSAM2 0911 0889 0026 35 617

PSAM3 0897 0881 0031 29 227

PSAM4 0827 0834 0074 11 103

PSAM5 0781 0803 0065 11 944

PSAM6 0932 0929 0014 67 454

PSAM7 0935 0931 0018 51 196

Sources: Primary data is processed by Smart PLS, 2018

Galina Dawn Muttaqin 169

Results of processing by using Smart PLS can be seen in Table 2, where the value of outer loadings PSAM
variabl of indicators there are no values less than 0.5 and shows the valueouter models or correlation with the
overall variable already meet Convergent validity. It can also be seen in Table 2 where the value of the indicator
PSAM1 tstatistik until PSAM7 greater than t-table (with a significance level of = 1.96 and sample n =
72). So it can be concluded that the variables change SAM has qualified on the adequacy of the model or Discriminant
validity.

Organizational performance variables described by the seven indicators KO1 statements consisting of up to
KO7 shown by Figure 3 Test against outer loading aims to see the correlation between score items or indicators to scores
konstruknya. Indicators are considered reliable if the value of correlation above 0.7. However, during the development
phase correlation of 0.5 would still be acceptable (Ghozali, 2012).

table 3
Value Outer Loading s variable performance Organization

Original Sample Mean of Standard t-Statistic

estimate subsample s Deviation
Organizational Performance Indicators

KO1 0816 0789 0120 6785

KO2 0868 0862 0040 21 888

KO3 0941 0925 0015 62 188

KO4 0714 0739 0094 7625

KO5 0916 0900 0025 36 779

KO6 0721 0736 0085 8517

KO7 0890 0866 0036 24 775
Sources: Primary data is processed by Smart PLS, 2018

Results of processing by using Smart PLS can be seen in Table 3 where the value outer loadings of
indicators of organizational performance variables there are no values less than 0.5 and shows the valueouter
models or correlation with the overall variable already meet Convergent validity. It can also be seen in Table 3
where the value of the indicator KO1 tstatistik until KO7 greater than t-table (level sigifikansi = 1.96 and sample n
= 72). So it can be concluded that variable of organizational performance has been qualified on the adequacy of
the model or Discriminant validity.

RESULTS AND DISCUSSION

Hypothesis Testing through Test Inner Model

Inner models according Ghozali (2012) is a picture of the relationship between the latent variables are based
on Inner substantive theory models which is sometimes referred to as
inner relations, structural models and substantive theory. examination inner models or structural model was conducted to see
the relationship between the constructs, the significant value and R-square
of the research model. Evaluated by using a structural model R-square to construct dependent (Ghozali,
2012). Limits to reject and accept the hypothesis that
Galina Dawn Muttaqin 170

proposed is ± 1.96, where if the value of t-statistic greater than t-table (1.96) then the hypothesis is accepted,
whereas if the value of t-statistic is smaller than t-table (1.96) then the hypothesis is rejected. The inner models
(Result For Inner Weight) in this study are in Table 4 as follows:

table 4
Result For In ner Weight
original
the mean of Standard
sample t-Statistic
Estimat subsamples deviation
D -> PSAM 0916 0904 0025 36 005
e
PSAM -> KO 0495 0491 0044 11 353

D -> KO 0517 0525 0048 10 842

Sources: Primary data is processed by Smart PLS, 2018

Based on Table 4 shows that the relationship D with 36.005 and significant positive PSAM 1.96. PSAM
relationship with 11.353 and significant positive KO 1.96. KO D positive relationship with 10.842 and significant at
1.96. In assessing models with PLS begins to look R-Square for each variable
ditujukkan latent dependent on
Table 5.

table 5
R-Square
R-square
PSAM 0839
D

KO 0980
Sources: Primary data is processed by Smart PLS, 2018

Description: D
: Delegation of Authority PSAM
: Changes in Management Accounting System KO
: Organizational Performance

Table 5 shows the value R-square SAM changes amounted to 83.9%, and organizational performance of
98.0 and the rest influenced by other factors. It can be concluded the higher R-square, the greater the
independent variables can explain the dependent variable so that the better the structural equation.

The influence of the Delegation of Authority to Change Accounting System

management
Hypothesis 1 stated that the delegation of authority positive effect on SAM change, such as in Table
4. Based on the results no indicators were eliminated, it is because there is no correlation constructs that are
less than
0.5 so that each variable meets the criteria convergent validity ( value AVE). Based on the results of data
processing in Table 4 show that the delegation
Galina Dawn Muttaqin 171

authority positively affects SAM changes the displayed value

original sample estimate for 0916 and the value of T-36.005 statistic is greater than the T-table is 1.96.
Therefore Hypothesis 1 received.
Based on the results in Table 4 delegated authority positively affects SAM changes. Variable delegation
in shape by 8 indicators, namely D1 through D8. Based on the questionnaire showed that the indicator D3
(benefits given to employees.) Has a value of 0.953 loading factor, this shows that the indicator has a strong
influence on the change of SAM. Delegating tasks assigned to the subordinate managers must still be
controlled, so that the delegation provided is not misused certain parties. Delegation of authority creates an
opportunity for managers to change the SAM into which they need (Abernethy & Bouwens 2005). SAM in the
company will be amended so that the management and employees to adopt new skills and innovation that
are involved with increased levels of delegation of authority. Managers who make the assignments need
reliable information about their products and services so that decisions can be made to meet local needs. The
results of this study support previous research Hoque (2011) provides empirical evidence that delegation of
authority to positively influence the change SAM.

Effects of Changes in Management Accounting System on Organizational Performance

Hypothesis 2 states SAM change has a positive effect on organizational performance. Based on the
results no indicators were eliminated, it is because there is no correlation construct that is less than 0.5 so
that each variable meets the criteria convergent validity ( value AVE). Hypothesis 2 described in the table

4. Based on the results of data processing in Table 4 show that SAM changes positively affects the
displayed value KO original sample estimate
for 0495 and the value of T-11.353 statistic is greater than the T-table is 1.96. Therefore Hypothesis 2
received.
Based on the results in Table 4 SAM change has a positive effect on organizational performance.
Variable SAM changes in shape by 7 indicators of SAM1 to the SAM 7. Control is done properly will minimize
errors keungkinan employee in performing the task. Employee performance rises will impact on company
performance. Changes in accounting management system enables managers to obtain the necessary
information to make economic decisions (Chenhall & Morris, 1986; Mia & Chenhall, 1994). At the time managers
need the right information to improve the performance of the company it is necessary to pengelolah system
also provides reliable information, to the reliability of the system so no changes and adjustments needed so
that the resulting information can have a positive impact on the performance of the company or even rise
better. The results of this study support previous research Hoque (2011) provides empirical evidence that
changes in accounting management system positively affect the performance of the organization.

The influence of the Delegation of Authority to the Organizational Performance

Galina Dawn Muttaqin 172

Hypothesis 3 stated that the Delegation of authority is a positive influence on organizational

performance are described in Table 4. Based on the results no indicators were eliminated, it is because there
is no correlation construct that is less than 0.5 so that each variable meets the criteria convergent validity ( value
AVE). Data processing results in Table 4 show that the delegation of authority has a positive effect on
organizational performance displayed by value

original sample estimate for 0517 and the value of T-statistic greater than 10.842 is Ttabel is 1.96. Therefore Hypothesis 3 is
accepted.
Based on the results in Table 4 delegated authority positively affects SAM changes. Variable delegation
of authority in the form of the three indicators, namely D1 through D8. Greater delegation of authority
providing incentives for lower-level managers to make better decisions, which in turn can lead to increased
performance of the company. With the delegation of authority, the business unit to focus on timely response
to local customers

and other stakeholders, since they do not have to wait for approval from a higher authority for
business decisions, Prendergast (2002). The manager of decentralization become more motivated and
interested in their work when they are allowed more discretion in carrying out their duties. Decision-making at
the local level to encourage managers to be more aggressive in the acquisition of their local information and
more strategic in their actions, this argument implies that good economic decisions and positioned by the
lower-level managers, the better the performance of the company Hoque (2011) and Salam (2013) menyataka
that delegate power to lower-level managers who have influence positively related to performance, so that the
problems facing the company can be resolved.
Galina Dawn Muttaqin 173

CONCLUSIONS AND SUGGESTIONS

This study discusses a model that examines the effect of the delegation of authority on organizational
performance with changes in accounting management system as an intervening variable. Based on testing
and discussion, summarized as follows: (1) Delegation of authority is a positive influence on changes in the
SAM. (2) Changes
SAM influential positive to performance organization. (3)
Delegation of authority is a positive influence on organizational performance.
Galina Dawn Muttaqin 174

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