Economic Transition, Strategy and the Evolution of Management Accounting Practices: The Case of India

Liberalization of the Indian economy in 1991 increased the intensity of international competition and changed the internal information needs of Indian managers. This paper explores the evolution of a broad range of management accounting practices in 14 firms using a contingency theory framework. Differences in management accounting practices in 1996 are examined in relation to firms experience in and exposure to world markets prior to liberalization and as a function of contemporaneous differences in competitive strategy. We find evidence of changes associated with shifts in the external environment.