Privatization, management accounting change, and cultural values in a developing country: Case studies from Bangladesh

In this article, we report on a field study of how privatization programs affected management accounting and control systems in two privatized jute goods manufacturing firms in Bangladesh. The change to the organizations' structures and operations arising from privatization is explained using the notions of leadership styles, external legitimacy, and cultural values and social norms. Our findings revealed that government's privatization programs resulted in wide-ranging changes to financial and administrative junctions of the organizations. These changes included participative management styles, decentralized organizational structures, multidimensional performance measurement systems, worker participation, and a new incentive policy for workers. Leadership styles appeared to have a significant impact on the design and operation of innovative management control systems. This new organizing paradigm is well suited to changing social, economic and cultural conditions in the organizations studied