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The Diffusion of Management Accounting Practices in Developing Countries: Evidence from Libya

Leftesi, Abdulghani (2008) The Diffusion of Management Accounting Practices in Developing Countries: Evidence from Libya. Doctoral thesis, University of Huddersfield.

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    The transition in Libya from a planned economy to a market economy, which
    commenced in the late 1980s, has resulted in fundamental changes such as the
    restructuring of state-owed enterprises, a noticeable growth in foreign direct
    investment, and an emerging private sector. These changes put immediate pressure
    on accounting practice to change to meet the demands of the new business

    Based on the findings of a questionnaire-based survey, supplemented by interview
    data, this study explores the state of „traditional‟ and „advanced‟ management
    accounting practices (MAPs) of a mix of 81 large and medium size Libyan
    manufacturing companies from different industrial sectors. In addition, drawing off
    the existing literature on new institutional sociology and innovation diffusion
    theories, a model is developed and forms the basis for investigating and evaluating
    the factors that influence the development and change of MAPs in Libyan
    companies. This investigation is underlined with thorough statistical inference
    resulting from applying factor analysis and simple and multiple regression to the
    survey data as appropriate. The data collected from 10 interviews are quantified and
    analysed to provide more insight into MAPs in the responding companies.

    Although the responding companies have reported using most of the MAPs
    surveyed, the adoption rates of theses practices are noticeably lower than the
    adoption rates of MAPs usually found in the management accounting literature. The
    findings also seem to confirm those of recent studies in other countries about the
    popularity of „traditional‟ practices over the much acclaimed „advanced‟ ones.
    However, respondents not only claim to derive higher benefits from „traditional‟
    MAPs than from „advanced‟ MAPs, but they also express their intention to place
    greater emphasis on the former in the future. Thus, this study questions the
    exaggeration in the criticism of traditional MAPs that characterised the obsolescence
    campaign initially led by Kaplan (1986) and Johnson and Kaplan (1987) and the
    acclaimed superiority of the so-called „advanced‟ MAPs.

    While it is surprising to find that none of the environmental factors examined in this
    study (e.g. uncertainty and market competition) seems to have an important impact
    on MAPs diffusion, factors related to attributes of innovation (e.g. the availability of
    resources, the availability of training, top management support and company size) do
    however have a significant positive impact on the diffusion of MAPs in these Libyan
    manufacturing companies. Institutional factors, especially those related to the fashion
    perspective (e.g. use of consultants) and the fad perspective (e.g. being in a joint
    venture with a foreign partner) appear to also be essential in facilitating diffusion.
    This research concludes that the demand side perspective, which dominates the
    literature on innovation diffusion, is not adequate on its own and, therefore, the
    supply side and the institutional environment are also important factors in explaining
    the diffusion of MAPs.

    Finally the main limitations of this study are outlined and opportunities for future
    research are discussed, particularly in relation to this study‟s findings about the need
    to reconsider the usefulness of traditional MAPs and also the need for a multiple
    perspective approach for studying the diffusion of MAPs.

    Item Type: Thesis (Doctoral)
    Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
    Schools: The Business School
    Depositing User: Graham Stone
    Date Deposited: 12 Nov 2009 13:00
    Last Modified: 01 Jan 2011 01:38


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