Skip to main content
SpringerLink
Log in

Chinese Enterprises’ Use of Management Accounting Tools

  • Chapter
  • First Online:
Management Accounting in China and Southeast Asia

Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

Abstract

Purpose: To explore Chinese enterprises’ adoption of management accounting tools, the frequency of their use, managers’ satisfaction with them, and the tools’ perceived importance.

Design/methodology/approach: Online survey, personal interviews, correlation, and t-test analyses.

Findings: The management accounting instruments utilized by Chinese enterprises vary widely. Nevertheless, in keeping with the evolutionary theory of management accounting instrument development, more traditional tools enjoy more widespread use than newer ones do. The frequency of a tool’s employment, managers’ satisfaction with it, and their perception of its importance are highly correlated. Yet, a sample subgroup consisting only of tool-users does not differ significantly from all respondents regarding the instruments’ importance.

Research limitations: There being no readily accessible source to ensure random selection of the units of analysis, the study relies on a convenience sample, management accounting tools employed in earlier research, and financial executives’ interview responses. Examination of a random sample, different management accounting instruments, and respondents in other managerial functions conceivably could yield divergent results.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 139.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 179.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 179.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Ahmad K (2014) The adoption of management accounting practices in Malaysian small- and medium-sized enterprises. Asian Soc Sci 10(2):236–249

    Google Scholar 

  • Ahmad K, Zabri SM (2016) Management accounting practices among small and medium enterprises. In: Proceedings of the 28th international business information management association conference, Seville, Spain, pp 3627–3637

    Google Scholar 

  • Al-Omiri M, Drury C (2007) A survey of factors influencing the choice of product costing systems in UK organizations. Manag Account Res 18(4):399–424

    Article  Google Scholar 

  • Ansari SM, Peer CF, Zajac EJ (2010) Made to fit: how practices vary as they diffuse. Acad Manag Rev 35(1):67–92

    Google Scholar 

  • Ashfaq K, Younas S, Muhammad U, Hanif Z (2014) Traditional vs. contemporary management accounting practices and its role and usage across business life cycle stages: evidence from Pakistani financial sector. Int J Acad Res Account Finance Manag Sci 4(4):104–125

    Google Scholar 

  • Bradsher K, Tang A (2018, December 21) As economy slows, Xi’s troubles multiply. The New York Times, International Edition, 1, 9

    Google Scholar 

  • Brewer GA (2008) Employee and organizational performance. In: Perry JL, Hondeghem A (eds) Motivation in public management: the call of public service. Oxford University Press, New York, pp 136–156

    Google Scholar 

  • Broadnax WD, Conway KJ (2001) The social security administration and performance management. In: Forsythe DW (ed) Quicker, better, cheaper: managing performance in American government. Rockefeller Institute Press, Albany, pp 143–175

    Google Scholar 

  • Burns J (2000) The dynamics of accounting change: interplay between new practices, routines, institutions, power and politics. Account Audit Account J 13:566–596

    Article  Google Scholar 

  • Burns J, Scapens RW (2000) Conceptualizing management accounting change: an institutional framework. Manag Account Res 11(1):3–25

    Article  Google Scholar 

  • Burns T, Stalker GM (1961) The management of innovation. Tavistock Publications, London

    Google Scholar 

  • Carruthers BG (1995) Accounting, ambiguity, and the new institutionalism. Acc Organ Soc 20(4):318–328

    Article  Google Scholar 

  • Central Intelligence Agency (CIA) (2013) The world factbook. Washington, DC

    Google Scholar 

  • Central Intelligence Agency (CIA) (2019) China economy – overview. World Factbook. https://theodora.com/wfbcurrent/china/china_economy.html. Accessed 27 February 2019

  • Chan MWL, Rotenberg W (1999) Accounting, accounting education, and economic reform in the People’s Republic of China. Int Stud Manag Org 29(3):37–53. https://doi.org/10.1080/00208825.1999.11656770

    Article  Google Scholar 

  • Chanegrih T (2008) Applying a typology of management accounting change: a research note. Manag Account Res 19(3):278–285

    Article  Google Scholar 

  • Chow CW, Rong-Ruey D, Xiao JZ (2007) Management accounting practices in the People’s Republic of China. In: Chapman CS, Hopwood AG, Shields MD (eds) Handbook of management accounting research. Elsevier, New York, pp 923–967

    Google Scholar 

  • CICPA (Chinese Institute of Certified Public Accountants) (2015) Overview of the accountancy profession in China. Chapter I Overview and milestones Updated on January 20, 2015. http://www.cicpa.org.cn/intro-cicpa/about/201503/W020150302356555022432.pdf. Accessed 27 February 2019

  • Cox C (2010) Balancing decision speed and decision quality: assessing the impact of business intelligence systems in high velocity environments. Dissertation, TUI University, Faculty of the College of business administration, California

    Google Scholar 

  • De la luz Fernández-Alles M, Valle-Cabrera R (2006) Reconciling institutional theory with organizational theories: how neo-institutionalism resolves five paradoxes. J Organ Chang Manag 19(4):503–517

    Article  Google Scholar 

  • De Lancer JP, Holzer M (2002) Promoting the utilization of performance measures in public organizations: an empirical study of factors affecting adoption and implementation. Public Adm Rev 61(6):693–708

    Google Scholar 

  • DeLone WH, McLean ER (1992) Information systems success: the quest for the dependent variable. Inf Syst Res 3(1):60–95

    Article  Google Scholar 

  • DeLone WH, McLean ER (2002) Information systems success revisited. System sciences HICSS. In: Proceedings of the 35th annual Hawaii international conference on system sciences, Hawaii

    Google Scholar 

  • DeLone WH, McLean ER (2003) The DeLone and McLean model of information systems success: a ten-year update. J Manag Inf Syst 19(4):9–30

    Article  Google Scholar 

  • DiMaggio PJ, Powell WW (1983) The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. Am Sociol Rev 48:147–160

    Article  Google Scholar 

  • DiMaggio PJ, Powell WW (eds) (1991) The new institutionalism in organizational analysis. University of Chicago Press, Chicago

    Google Scholar 

  • Du RR, Xiao ZE, Zhou QW, Zhao LX (2008) The determinants and performance effects of management accounting and controls in listed Chinese firms. Account Res 9:39–46

    Google Scholar 

  • Du RR, Xiao ZE, Zhou QW (2009) A review of management accounting research in China. Account Res 9:72–80

    Google Scholar 

  • Firth M (1996) The diffusion of managerial accounting procedures in the People’s Republic of China and the influence of foreign partnered joint ventures. Acc Organ Soc 21(7–8):629–654

    Article  Google Scholar 

  • Fowzia R (2016) Strategic management accounting techniques of manufacturing organizations of Bangladesh with special reference to satisfaction level. DIU J Bus Econ 10(2):123–134

    Google Scholar 

  • Franklin AL (2000) An examination of bureaucratic reactions to institutional controls. Public Perform Manag Rev 24(1):8–21

    Article  Google Scholar 

  • Frezatti F (2007) The ‘economic paradigm’ in management accounting return on equity and the use of various management accounting artifacts in a Brazilian context. Manag Audit J 22(5):514–532

    Article  Google Scholar 

  • Frezatti F, Braga de Aguiar A, Rezende AJ (2006) Relationship between management accounting attributes and user satisfaction. J Account Bus Manag 13:1–24

    Google Scholar 

  • Ghosh BC, Chan YK (1997) Management accounting in Singapore - well in place? Manag Audit J 12(1):16–18

    Article  Google Scholar 

  • Granlund M, Lukka K (1998) It’s a small world of management accounting practices. J Manag Account Res 10:153–179

    Google Scholar 

  • Greenwood R, Hinings CR (1996) Understanding radical organizational change: bringing together the old and the new institutionalism. Acad Manag Rev 21(4):1022–1054

    Article  Google Scholar 

  • Hong E, Sun L (2006) Dynamics of internationalization and outward investment: Chinese corporations’ strategies. China Q 187:610–634

    Article  Google Scholar 

  • Hoon-Halbauer SK, Keow S (1999) Managing relationships within Sino-foreign joint venture. J World Bus 34(4):344–369

    Article  Google Scholar 

  • Hout T, Michael D (2014, September) A Chinese approach to management. Harvard Bus Rev

    Google Scholar 

  • Huang Y (2018, September 29–30) Jack Ma is retiring. Is China’s economy losing steam? The New York Times, International Edition, 8, 10

    Google Scholar 

  • International Federation of Accountants (IFAC) (1998) International management accounting practice statement: management accounting concepts, New York

    Google Scholar 

  • Jaradat ZA, Taha RB, Binti Mat Zin R, Wan Zakaria WZ (2018) The use of management accounting practices in Jordanian small-and-medium-sized enterprises. Acad Account Financ Stud J 22(2):1–19

    Google Scholar 

  • Jennings ET, Haist MP (2006) Putting performance measurement in context. In: Ingraham PW, Lynn LE (eds) The art of governance. Georgetown University Press, Washington, DC, pp 173–194

    Google Scholar 

  • Johnson I (2019, September 28–29) Left out as China boomed. New York Times, 1, 4

    Google Scholar 

  • Joshi PL (2001) The international diffusion of new management accounting practices: the case of India. J Int Account Audit Tax 10:85–109

    Article  Google Scholar 

  • Joshi PL, Al-Mudhaki J, Bremser WG (2003) Corporate budget planning, control and performance evaluation in Bahrain. Manag Audit J 18(9):737–750

    Article  Google Scholar 

  • Joshi PL, Bremser WG, Deshmukh AV, Kumar R (2011) Diffusion of management accounting practices in gulf cooperation council countries. Acc Perspect 10(1):23–53

    Article  Google Scholar 

  • Kamal S (2015) Historical evolution of management accounting. Cost Manag 43(4):13–19

    Google Scholar 

  • Ku E (2012) China issues legislation for internal control framework. https://www.china-briefing.com/news/chinas-internal-control-and-audit-regulatory-framework/. Accessed 25 December 2018

  • Lawrence PR, Lorsch J (1967) Organization and environment. Harvard Business School, Division of Research, Boston

    Google Scholar 

  • Lawrence PR, Nohria N (2002) Driven: how human nature shapes our choices. Jossey-Bass, San Francisco

    Google Scholar 

  • Lee CW (2001) Financial restructuring of state-owned enterprises in China: the case of Shanghai Sunve Pharmaceutical Corporation. Acc Organ Soc 26(7):673–689

    Google Scholar 

  • Lee MT, Raschke RL (2016) Understanding employee motivation and organization performance: arguments for a set-theoretic approach. J Innov Knowl 1(3):162–169

    Article  Google Scholar 

  • Lin WX, Wu A (1998) Investigation on management accounting practices in China. Acc Res 8:12–16

    Google Scholar 

  • Lounsbury M (2008) Institutional rationality and practice variation: new directions in the institutional analysis of practice. Acc Organ Soc 33(4–5):349–361

    Article  Google Scholar 

  • Meng FL, Wang CC, Wang J, Yang GS (1997) Management accounting application: status quo, problems, and improvements. Acc Res 4:37–41

    Google Scholar 

  • Merchant KA, Chow CW, Wu A (1995) Measurement, evaluation and reward of profit center managers: a cross-cultural field study. Acc Organ Soc 20(7–8):619–638

    Article  Google Scholar 

  • Mezias JM, Starbuck WH (2003) Studying the accuracy of managers’ perceptions: a research odyssey. Br J Manag 14(1):3–17

    Article  Google Scholar 

  • MF PRC: Ministry of Finance of the People’s Republic of China (2014) Comprehensive development Chinese characteristics management accounting, accelerate the upgrading of China’s economic transformation. http://kjs.mof.gov.cn/zhengwuxinxi/lingdaojianghua/201411/t20141126_1160667.html. Accessed 25 December 2018

  • Mohamad Z, Wahab KA (2017) The relationship between management accounting practices and performance of the small and medium enterprises in Libya: a proposed conceptual framework. Eur J Bus Manag 9(26):108–115

    Google Scholar 

  • Moynihan DP, Landuyt N (2009) How do public organizations learn? Bridging structural and cultural divides. Public Adm Rev 69(6):1097–1105

    Article  Google Scholar 

  • Moynihan DP, Pandey SJ (2010) The big question for performance management: why do managers use performance information. J Public Adm Res Theory 20(4):849–866

    Article  Google Scholar 

  • N/A (2019) China economic outlook. Focus-Economics. https://www.focus-economics.com/countries/china. Accessed 27 February 2019

  • N/A (n.d.) Chinese economy. http://www.chinaorbit.com/china-economy/china-economy-overview.html. Accessed 27 February 2019

  • Nanjing University International Accounting Department Group (2001a) A judgement and evaluation of the current state of budget management in Chinese firms. Acc Res 4:15–29

    Google Scholar 

  • Nanjing University International Accounting Department Group (2001b) A survey and analysis of the adoption of cost management methods and their effects in Chinese firms. Acc Res 7:46–55

    Google Scholar 

  • Nimtrakoon S (2009) Organization strategy, management techniques and management accounting practices: contingency research in Thailand. Doctoral dissertation, University of Hull

    Google Scholar 

  • Nohria N, Groysberg B, Lee L (2008) Employee motivation: a powerful new model. Harv Bus Rev 86(7–8):78–84

    Google Scholar 

  • O’Connor NG, Chow CW, Wu A (2004) The use of ‘Western’ management accounting/controls in China’s state-owned enterprises during economic transition. Acc Organ Soc 29(3–4):349–375

    Article  Google Scholar 

  • O’Connor NG, Vera-Muñoz SC, Chan F (2011) Competitive forces and the importance of management control systems in emerging-economy firms: the moderating effect of international market orientation. Acc Organ Soc 36(4):246–266

    Article  Google Scholar 

  • Perrow C (1986) Complex organisations: a critical essay. Random House, New York

    Google Scholar 

  • Petter S, McLean E (2009) A meta-analytic assessment of the DeLone and McLean IS success model: an examination of IS success at the individual level. Inf Manag 46(3):159–166

    Article  Google Scholar 

  • Phadoongsitthi M (2003) The role of management accounting in emerging economies: an empirical study of Thailand. Dissertation, University of Maryland, College Park

    Google Scholar 

  • Rickards RC, Ritsert R (2018) Organisational influences on management accounting toolkits in Chinese enterprises: a pilot study. Int J Manag Financ Account 10(1):16–31

    Google Scholar 

  • Rickards RC, Kong J, Ritsert R (2014) Controlling in Chinese companies: a first peek behind the bamboo curtain. Int J Acc Bus Soc 22(2):1–18

    Google Scholar 

  • Rickards RC, Kong J, Ritsert R (2015) Chinese companies’ current planning practices. Int J Bus Acc Finance 2(1):1–19

    Google Scholar 

  • Rigby D, Bilodeau B (2015) Management tools & trends 2015. Bain & Company, London

    Google Scholar 

  • Ritsert R, Rickards RC, Xie B (2015) Organizational influences on management accounting tool usage in Chinese enterprises. Friends Acc 20:2–10

    Google Scholar 

  • Rufino HD (2014) Management accounting practices (MAPs) of small and medium-sized manufacturing enterprises in the city of Tarlac. Rev Integr Bus Econ Res 4(1):55–74

    Google Scholar 

  • Sadeghi M (2018) Management accounting practices in small and medium-sized enterprises regarding the impact of organizational DNA, commercial potential and operational technology. Int J Bus Quant Econ Appl Manag Res 4(8):22–31

    Google Scholar 

  • Scapens RW (1994) Never mind the gap: towards an institutional perspective on accounting practice. Manag Account Res 5(3–4):301–321

    Article  Google Scholar 

  • Shields JF, Shields MD (1998) Antecedents of participative budgeting. Acc Organ Soc 23(1):49–76

    Article  Google Scholar 

  • Skousen CR, Yang J-L (1988) Western management accounting and the economic reforms of China. Acc Organ Soc 13(2):201–206

    Article  Google Scholar 

  • Sulaiman M, Ahmad NNN, Alwi N (2004) Management accounting practices in selected Asian countries. Manag Audit J 19(4):493–508

    Article  Google Scholar 

  • Üç M, Kasa E (2016) The use of managerial accounting as a tool for decision making by manufacturing companies in Albania. J Acc Finance Audit Stud 2(1):44–52

    Google Scholar 

  • Waweru NM, Hoque Z, Uliana E (2004) Management accounting change in South Africa case studies from retail services. Account Audit Account J 17(5):675–704

    Article  Google Scholar 

  • Wu J, Boateng A (2010) Factors influencing changes in Chinese management accounting practices. J Chang Manag 10(3):315–329

    Article  Google Scholar 

  • Wu J, Drury C (2007) An exploratory study on the environmental factors influencing the adoption of MAPs in Chinese SOEs and JVs. J Technol Manag China 2(1):54–70

    Article  Google Scholar 

  • Xiang B (1998) Institutional factors influencing China’s accounting reforms and standards. Account Horiz 12(2):105–119

    Google Scholar 

  • Xie B (2018) Westliche management-accounting-Instrumente in China. Springer Gabler, Wiesbaden

    Google Scholar 

  • Xiong YR, Su WB (2008) Current situation and outlook of management accounting practice development – the survey on application of advanced management accounting methods in China. Acc Res 11:84–89

    Google Scholar 

  • Yalcin S (2012) Adoption and benefits of management accounting practices: an intercountry comparison. Acc Eur 9(1):95–110

    Google Scholar 

  • Yang K, Hsieh JY (2007) Managerial effectiveness of government performance measurement: testing a middle-range model. Public Adm Rev 67(5):861–879

    Article  Google Scholar 

  • Yi M, Tayles M (2009) On the emergence of strategic management accounting: an institutional perspective. Account Bus Res 39(5):473–495

    Article  Google Scholar 

  • Zhang MR (2018) Private sector will continue to play a vital role. China Focus Posted October 16. http://www.cnfocus.com/private-sector-will-continue-to-play-a-vital-role/

  • Zheng X (2012) Management accounting practices in China: current key problems and solutions. Soc Res 29(4):91–98

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Public Business Administration and Public Management, German Police University Münster, Münster, Germany

    Robert C. Rickards & Rolf Ritsert

Authors
  1. Robert C. Rickards
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Rolf Ritsert
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Robert C. Rickards .

Editor information

Editors and Affiliations

  1. German Police University, Münster, Germany

    Robert C. Rickards

  2. German Police University, Münster, Germany

    Rolf Ritsert

  3. Rangsit University, Pathumthani, Thailand

    Kanitsorn Terdpaopong

Appendices

Appendices

1.1 Section 7 t-Tests (All Respondents)

Table 15 t-Test of MAT frequency of use for two samples assuming unequal variances
Full size table
Table 16 t-Test of importance of MAT usage for two samples assuming unequal variances
Full size table
Table 17 t-Test of MAT frequency of use for two samples assuming unequal variances
Full size table
Table 18 t-Test of satisfaction with MAT usage for two samples assuming unequal variances
Full size table
Table 19 t-Test of importance of MAT usage for two samples assuming unequal variances
Full size table

1.2 Section 7 t-Tests (Only Users)

Table 20 t-Test of satisfaction with MAT usage for two samples assuming unequal variances
Full size table
Table 21 t-Test of importance of MAT usage for two samples assuming unequal variances
Full size table
Table 22 t-Test of MAT frequency of use for two samples assuming unequal variances
Full size table
Table 23 t-Test of importance of MAT usage for two samples assuming unequal variances
Full size table
Table 24 t-Test of MAT frequency of use for two samples assuming unequal variances
Full size table
Table 25 t-Test of satisfaction with MAT usage for two samples assuming unequal variances
Full size table
Table 26 t-Test of importance of MAT usage for two samples assuming unequal variances
Full size table

Rights and permissions

Reprints and permissions

Copyright information

© 2021 Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Rickards, R.C., Ritsert, R. (2021). Chinese Enterprises’ Use of Management Accounting Tools. In: Rickards, R.C., Ritsert, R., Terdpaopong, K. (eds) Management Accounting in China and Southeast Asia. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-030-66245-5_2

Download citation

Publish with us

Policies and ethics

Search

Navigation