A cultural political economy of accounting in a mill in a traditional Sri Lankan village

What is it about?

This study employs a cultural political economy of management accounting, drawing from political and economic history, modes of production theory in development studies, and cultural anthropology to inform a longitudinal case study of management control in a textile Mill in a traditional Sinhalese village in Sri Lanka. Successive attempts to impose conventional management accounting failed due to workers’ resistance. Management accounting, an embodiment of capitalist MOP and modern industrial culture, took unexpected roles when confronted by a traditional, rural culture based on Kingship obligations. The Mill was founded by the state as a public enterprise. Government interference into operational affairs was considerable and performance was disappointing, leading to pressures for privatisation. Results improved after privatisation, partly because the Mill adopted more commercial budgeting practices. However, problems of cultural asymmetry were inflamed by a coalition of workers and local managers against foreign owners, who fled when financial irregularities were discovered. The government resumed ownership and budgeting practices of previous eras returned though the mill faced likely eventual closure.

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Why is it important?

The study shows how traditional cultures and politics can become intertwined in the management of an enterprise whether state run or privatised, and how management accounting initiatives can be resisted and have unanticipated outcomes.