As an attempt to investigate the adoption, future emphasis and benefits derived from traditional and contemporary western-orientated management accounting practices in Chinese organisations, in particular, in state-owned enterprises and foreign joint ventures located in China, this empirical study was modeled on a similar study undertaken in Australia (Chenhall and Langfield-Smith 1998). It obtained structured information and carried out a comparison between a western capitalist developed country and an eastern socialist developing country (China), which is moving towards a market economy. The effectiveness of the adoption of management accounting practices is influenced by complex contextual factors. Based on cultural, economic, institutional, organisational and innovation theory frameworks established in the research literature, the study therefore explored a wider range of environmental factors which determined the extent to which state-owned enterprises and foreign joint ventures have employed management accounting practices, Thus, the role which joint ventures have played in the diffusion of management accounting practices in China has consequently been evaluated.
A cross-sectional survey involving a postal questionnaire method of data collection was adopted. A total of 179 usable responses were received representing a response rate of 19%. The study also conducted some interviews.
The results of this research indicated that management accounting practices in Chinese organisations have made considerable progress in recent years compared to previous Chinese studies (He 1997; Lin and Wu 1998; Qiao 1997). However, there is a lower usage of management accounting practices by comparison with western countries. A number of environmental factors such as external authorities, social services, advanced production and management techniques, long-standing traditional practices, the attitude of the leadership, the quality of the accounting personnel have influenced the adoption of management accounting practices in stateowned enterprises and joint ventures. This study also confirmed that joint ventures have played an important role in the diffusion of management accounting practices in China because they have in general higher adoption rates and place greater emphasis on recently developed, strategically focused, market oriented and investment appraisal techniques than state-owned enterprises. In addition, the research has reinforced some support for the findings from previous studies (Chenhall and Langfield-Smith 1998; Firth 1996; O'Connor et al. forthcoming). The study also provided some evidence supporting institutional isomorphism theory; for example, joint ventures have adjusted the management accounting systems and practices to suit the Chinese management context.
The distinguishing feature of this study is that it incorporates an empirical investigation and an exploratory study in order to provide new knowledge relating to the adoption of western practices. of management accounting in China and the influence of foreign joint ventures. However, as with other studies, it has a number of limitations that need to be overcome in the future. Also future research directions are highlighted.
