Shahzad Uddin

ACCOUNTING FOR PRIVATISATION IN BANGLADESH: TESTING WORLD BANK CLAIMS

Abstract The World Bank and the IMF have encouraged many less developed countries (LDCs) to pursue privatisation policies. Development economists and World Bank reports claim this facilitates development by improving controls within enterprises and external regulation of financial markets acting on external accounting reports. This paper questions these beliefs. It compares the post-privatisation performance of companies in Bangladesh examined in a World Bank report with the authors’ own research on the same companies. The World Bank report reported that the success of the privatisations established the case for more. In the research reported here, only one of the privatised companies was judged a commercial success, though the unavailability and dubious accuracy of accounting reports prevented any definitive assessment. Above all, the paper questions the narrow criteria adopted by the World Bank report—namely profitability—and the neglect of employment conditions, trade union and individual rights; social returns; and financial transparency and accountability to external constituents. Our evidence suggested that privatisation has not increased returns to society: privatised companies’ contributions to state revenue declined in real terms and as a proportion of value added. Transparent external reports failed to materialise as required by law and there was evidence of untoward transactions affecting minority shareholders, creditors, and tax collecting institutions. Internal controls may have become more commercial but at the cost of declining employment, wages, quality of working life, and employee rights. The World Bank claims rest upon efficiency benefits trickling down to all but the effects of privatisation may have been a redistribution of power and wealth to the new owners. This paper argues that the IMF, the World Bank, and Western capitalist states have not provided the technical infrastructure and organisational capacity to execute their neo-liberal privatisation agenda, which rests on dubious socio-economic assumptions. Our unfavourable evaluation of privatisation in Bangladesh is not unique. It has been happening again and again around the world.

Rationality, traditionalism and the state of corporate governance mechanisms: Illustrations from a less-developed country

Purpose - The purpose of this paper is to provide an account of corporate governance practices in Bangladesh. This paper demonstrates that the traditionalist culture mediates the rationalist/legalist framework of corporate governance in Bangladesh. Design/methodology/approach - A series of semi-structured interviews were conducted. Observations and the personal working experience of one of the researchers, along with documentation, provided rich sources of information for the paper. Findings - The findings show that families have a dominant presence in all aspects of corporate governance. Boards of directors in companies play a significant part in serving the interests of families rather than those of general shareholders. Research limitations/implications - This study focuses on corporate governance practices in a traditional setting and shows how traditional culture and values are in conflict with the rational ideas imported from a different setting. Originality/value - The paper adds to the literature on corporate governance, especially in the context of less-developed countries. It will be of great value to researchers and practitioners seeking to gain a better understanding of corporate governance frameworks in various settings.

Management controls in family-owned businesses (FOBs): A case study of an Indonesian family-owned University

Abstract This paper reports on the results of a case study of management controls in an Indonesian family-owned University. The paper attempts to understand the nature and dynamics of management controls in the operations of the University. Data for the analyses are gathered from multiple sources including document analysis, observations and semi-structured interviews. The findings of the case study showed that culture and social relations are very instrumental in the management of the University [Ansari, S. L., & Bell, J. (1991). Symbolism, collectivism and rationality in organizational control. Accounting, Auditing and Accountability Journal, 4(2), 4–27]. Decisions such as recruitment, rewards, performance evaluation, and resource allocations are often made in cognizance of social and cultural factors. The strong influence of culture and social relations in the organization thus made formal management controls less relevant. These findings have implications for understanding management controls in FOBs especially in the developing world.

Trying to operationalise typologies of the spectacle: A literature review and a case study

Purpose - This paper aims to focus on building an interpretive framework for understanding accounting practices and changes, drawing on the situationist concept of the “spectacle”. Design/methodology/approach - The paper reviews the existing accounting and management literature in light of the concept of the spectacle. The paper presents empirical illustrations of participatory budgeting as a form of the spectacle and the role of donor agencies in local government reforms in Uganda, based on interviews and observations. Findings - It is argued that the transformational – rather than just metaphoric – dimension of the spectacle has the potential to provide a better understanding of accounting practices and their transformations in the context of ever-changing capitalism, and to further contribute to the critical accounting literature. Drawing on Debords work, the paper also extends ones understanding of why donor agencies export ideas, including accounting practices and technologies. Practical implications - The paper further enriches the possibility of critical consciousness and praxis in transforming and shaping the spectacle. By understanding the construction of the spectacle and its transformations, as Boje Originality/review - The paper provides a perspective for the understanding of accounting changes, and it should open up avenues for further research regarding various forms of the spectacle that involve accounting techniques and practices.

Introduction to corporate governance in less developed and emerging economies

Purpose of paper – This paper sets out to introduce the special issue on corporate governance in less developed and emerging economies. It summarises and reflects on themes and findings raised in the papers in the volume. Design/methodology/approach – The findings reported in the paper are based on desk research and review of the papers contained in the volume. Findings – The paper finds that the adoption of appropriate corporate governance systems is becoming a central issue in less developed and emerging economies. Factors such as the 1997 Asian financial crisis, the adoption of international donor led reforms, and the globalisation of capital markets are among the factors that are driving corporate governance reforms in less developed and emerging economies. Research limitations/implications – The pressure from international donors has compelled some less developed and emerging economies to adopt corporate governance models developed in the West with no modification. The paper argues that while it is imperative for less developed and emerging economies to reform their corporate governance systems, it is important that these systems are adapted to suite the specific needs of individual countries. Originality/value of paper – The paper is a summary of studies exploring various corporate governance issues in less developed and emerging economies. The issues addressed in these studies are important to understand corporate governance issues in both the private and public sectors in less developed and emerging economies.

Human rights disasters, corporate accountability and the state: Lessons learned from Rana Plaza

Purpose - – The purpose of this paper is to examine the state-business nexus in responses to human rights violations in businesses and questions the efficacy of the UN guiding principles on human rights in businesses, in particular in the ready-made garments (RMG) industry in Bangladesh. Drawing on Cohen’s notion of “denial” and Black’s (2008) legitimacy and accountability relationships of state and non-state actors, the study seeks to explain why such “soft” global regulations remain inadequate. Design/methodology/approach - – The empirical work for this paper is based on the authors’ participation in two multiple-stakeholder advisory consultation meetings for the RMG sector in Bangladesh and 11 follow-up interviews. This is supplemented by documentary evidence on human rights disasters, responses of the state and non-state actors and human rights reports published in national and international newspapers. Findings - – The paper provides clear evidence that the state-business nexus perpetuates human rights disasters. The study also shows that the Bangladeshi state, ruled by family-led political parties, is more inclined to protect businesses that cause human rights disasters than to ensure human rights in businesses. The economic conditions of the RMG industry and accountability and legitimacy relationships between state and non-state actors have provided the necessary background for RMG owners to continue to violate the safety and security of the workplace and maintain inhumane working conditions. Research limitations/implications - – Complex state politics, including family, kinship and wealthy supporters, and economic circumstances have serious implications for the efficacy of the UN guiding principle on human rights for business. This paper calls for broader political and economic changes, nationally and internationally. Originality/value - – The study highlights the perpetuation of corporate human rights abuses by the state-business nexus, and indicates that human rights issues continue to be ignored through a discourse of denial. This is explained in terms of legitimacy and accountability relationships between state and non-state actors, bounded by complex political and economic conditions.

Public sector reforms, privatisation and regimes of control in a Chinese enterprise

Abstract The Chinese economic reform has recently become a major focus of attention around the world. The underlying rationale for the Chinese governments privatisation and public sector reforms is the view that reformed state enterprises and privately managed firms will demonstrate superior management control and better performance, and hence encourage economic growth and employment. There are very few intensive case studies published in English journals studying whether firms privatised in China have reversed previous losses and introduced better management controls, leading to increased investment, productivity, and overall organizational effectiveness and efficiency. The researchers do not seek to deny the control problems of Chinese SOEs, but question the consequences of the new controls installed during the post-privatisation period. The paper also reveals a declining tendency in employment; altered distributions of wealth – especially to the state – and labour, and a lack of improvements in the accountability of privatised companies. Overall, the paper argues, the aims of reform policies in China, including better control, increased profitability and an improved working life for Chinese people, have not materialized. The paper calls for more research on the above issues in the Chinese context.

Management Accounting Research and Structuration Theory: A Critical Realist Critique

Abstract The article extends the critique of structuration theory from a critical realist perspective, in particular by demonstrating how its theoretical shortcomings are manifest in management accounting research. Examining of one of the most cited structuration-based accounting studies and other more recent structuration-based accounting studies, the article highlights what accounting researchers who have embraced a structuration lens may have ignored. It also demonstrates why accounting researchers could not get a better theoretical purchase out of structuration. We find that a critical realist account provides a far more in-depth account of budgeting changes and is likely to avoid the problems encountered in using a structuration theoretical lens. The article has important implications for accounting researchers as it demonstrates that analytical dualism instead of duality has much better potential to offer deeper understanding of accounting changes.

Social capital, networks and interlocked independent directors: a Mexican case

Purpose – The purpose of this paper is to investigate whether a pattern of interlocking directorates is emerging following reforms in Mexican corporations, and who, if any, are the powerful actors in this network. Drawing on the Bourdieusian notion of social capital, the paper also analyses theoretically the interlocking directorates, networks and powerful actors, and their influences on and potential implications for corporate governance mechanisms. Design/methodology/approach – The data used in the study consisted of 1,442 internal and external board members of the population of 126 Mexican corporations trading on the Mexican Stock Market as of January 2011. Use of social network analysis (SNA) demonstrates individuals’ links with corporations and allows the production of spatial maps to visualise the network structure of interlocking boards. Findings – Using the measures of SNA developed by Freeman (1979 and Bonacich (1972), the authors identify the most powerful and influential directors in the networ...

Introduction: Accounting and Development

This innovative and informative Handbook brings together leading international researchers on accounting and development to review empirical evidence, issues, policies and practices both past and present. The perspectives of the expert contributors reflect the strong growth of research on the topic, as accounting is increasingly recognised as an important factor in development. The book draws commentary and analyses together to inform future research, practice and policy and raises awareness of the actual and potential role of accounting in formulating and executing development policy. With theoretical and empirically focused chapters, this Handbook will appeal to academics and postgraduate students in accounting and development studies, practitioners, policymakers and development partners.