Purpose – The purpose of this paper is to evaluate management accounting research in developing countries and formulate suggestions for its progression.

Design/methodology/approach – This is a desk based study of existing literature analysed through a framework of management control transformation in developing countries derived from the authors' research.

Findings – Research is growing, especially on accounting in state-owned and privatised enterprises but more is needed on small and micro enterprises, agriculture, non-governmental organisations, and transnational institutions.

Originality/value – This is the first review of this area and thus should help intending and existing scholars.

Management accounting in less developed countries: what is known and needs knowing

The delivery of public services in developing countries is over‐centralised. One of the reasons for this is the presence of centralised decision‐making apparatus, which distances power from communities. The centralised decision making reduces accountability among public sector employees and is a good recipe for undesirable decisions and mismanagement of performance and resources at the expense of public service quality. The quality of public sector management in developing countries lags behind those of the developed countries due to the ills caused by over‐centralisation. Hence, the public services in developing countries are a drain on the wealth‐producing part of their economy. Reviews the underlying literature and theoretical framework of performance management (PM) as a systems‐based model for cultivating the “achievement culture” in public sector organisations (PSOs). It looks at how the various practical econometric and managerial techniques can integrate with the PM model in an attempt to excel the philosophy of new public management. The paper concludes by looking at the “new” role of management accounting systems in meeting “information needs” of modern public sector managers, as a potential area for further research. The paper proposes that the adoption of the PM model is a universal remedy for improving service quality in PSOs in developing countries.

Performance management model

Until recently management accounting information and detailed cost and profitability data were of limited use to the management of enterprises in the People's Republic of China (P.R.C.) as they had few discretional decision-making responsibilities. The recent move away from central economic planning and the introduction of competitive markets and private ownership of firms has led Chinese enterprises to question whether their existing accounting systems are adequate and to search for alternatives. As the P.R.C. moves toward a free market economy it seems plausible that they at least consider the adoption of the various management accounting concepts used in capitalist societies. One avenue for the dissemination of capitalist style management accounting practices to Chinese enterprises is via participating in a joint venture company with a foreign partner. I hypothesize that the accounting systems employed by the joint venture operation, which are invariably designed by the foreign partner, will have a significant influence on the development of, and content of, management accounting in the Chinese partner. Various explanations of the rate of adoption of capitalist style accounting systems by Chinese firms are developed and tested; these explanations are consistent with theoretical frameworks developed in the institutional isomorphism and diffusion of innovation literatures. Survey results show those Chinese (Sino) enterprises who participated in foreign partnered joint ventures made more changes to their management accounting systems when compared to similar P.R.C. companies who had no collaborative venture operations with foreign firms. These changes involved a move towards the accounting techniques employed by the joint venture.

The diffusion of managerial accounting procedures in the People's Republic of China and the influence of foreign partnered joint ventures

Public sector management accounting in emerging economies: A literature review

Research on Activity-Based Costing and its applications has mainly been focused on organisations in developed countries. Little has been learnt as to whether ABC techniques can be implemented successfully in organisations in developing countries. With the adoption of an innovation action research approach, we have successfully developed an ABC system jointly with a large Chinese manufacturing company, Xu Ji Electric Co. Ltd. (Xu Ji), for the period 2001–2005. The research provides a unique opportunity to examine some key success factors pertinent to ABC implementation within a Chinese organisational and cultural setting. The findings indicate that top management support, which has been identified as an important success factor in ABC literature, is evidently the predominant success factor in this organisation. In addition, Xu Ji's corporate culture of “top–down” instigation of the adoption of a series of management innovations (e.g., Economic-Value Added ® , Balanced Scorecards and Six Sigma) and its hierarchical command and communication structure, coupled with active involvement of a high proportion of dedicated professionals, can be seen as another success factor in achieving a relatively high level of diffusion of this accounting concept within the organisation. This study also reveals a different insight of internal resistance to change, which is contrary to the evidence presented in the existing ABC literature.

The implementation of Activity-Based Costing in China: An innovation action research approach

Management accounting research in China

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Management accounting research in China