ORGANIZATIONAL CAPABILITIES, CONTEMPORARY MANAGEMENT ACCOUNTING PRACTICES AND ORGANIZATIONAL EFFECTIVENESS IN INDIGENOUS MANUFACTURING FIRMS IN NIGERIA

Amidst severe industrial decline, including 767 manufacturing closures in 2023 and a contractionary performance index in early 2026, Nigerian indigenous manufacturers must urgently transition from reactive survivalism to forward-looking strategic frameworks. Grounded in the Resource-Based View and Dynamic Capabilities theories, this study examines the nexus between organizational capabilities (employee capabilities and IT infrastructure), contemporary management accounting practices (CMAPs), and organizational effectiveness. Employing a quantitative, cross-sectional survey design, data was gathered from 285 key management personnel across registered indigenous manufacturing firms in Southwest Nigeria and analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The empirical results reveal that both employee capabilities (EC) and IT infrastructure (ITS) exert a positive and significant direct impact on the utilisation of CMAPs. (β = 0.312, t = 4.689 (β = 0.285, t = 3.926) influence on CMAP adoption. Furthermore, CMAP utilisation significantly drives organizational effectiveness (OE) (β = 0.426, t = 5.633) proving that forward-looking, customer-centric metrics transcend historical cost-tracking. Crucially, CMAPs significantly mediate the relationship between internal capabilities and organizational effectiveness. This demonstrates that internal resources do not automatically improve performance on their own; instead, CMAPs serve as the vital strategic vehicle required to systematically audit, map, and deploy human and technological capital. The study concludes that human talent acts as a strategic catalyst while IT infrastructure serves as an operational enabler. It recommends that firms aggressively invest in professional training, upgrade digital analytics platforms, and adopt a logical hybrid accounting approach where immediate, complete shifts from traditional methods are unfeasible.