The Institutionalization of Management Accounting Change: An Observation across Societal, Organizational Field, and Organizational Levels

Abstract

The paper undertakes a holistic observation of the change to the management control system in a Chinese SOE. Integrating original institutional economics (OIE) and new-institutional sociology (NIS) perspectives, the longitudinal case study contributes to management accounting change literature by providing contextual evidence for how a loosely coupled Japanese-style quality control system evolved over nearly 20 years, and how such a system has been used dynamically as a mechanism to balance the conflicting, yet intertwined, institutional forces. The study sheds further light on the interactions of dynamic institutions at societal level, such as market openness, government protection, and political constraints, as well as those at organizational field level, including IJV experience and trade unions, and the impact of such interactions on intra-organizational change. The findings show the pathways along which the policies at societal level can possibly affect intra-organizational change, which has policy implications for further SOE reforms in China and other transition economies.