Rationality, accounting and politics: management control in a Bangladeshi jute mill

What is it about?

This case study of management control in a Bangladesh Jute Mill had bureaucratic rational controls concerning accounting but in practice these were decoupled from operations and existed primarily to gain legitimacy by giving the appearance of rationality. However they were little used by managers as control lay primarily with politicians who often intervened into managerial decisions at the behest of trade unions. The mills were increasingly loss-making and were contributing to a fiscal crisis of the state.

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Why is it important?

The paper illustrates common problems of state-owned enterprises in developing countries where politicians use them to exercise patronage and thereby deflect attention from commercial goals and needs.