Japanese cost management meets Sri Lankan politics

Abstract

The Sri Lanka Telecommunications company was recently partially privatised and a major Japanese company became responsible for its management. Previously, it was a government department characterised by rule bound, bureaucratic management and political interventions into operational issues. The longitudinal study illustrates how a Japanese manager's charismatic and patrimonial leadership eliminated bureaucratic controls, brought new management controls and reward systems, and achieved some commercial success. However, some employees unsympathetic to the changes allied with politicians frustrated with their exclusion from organisational affairs to get the Japanese manager removed and restore formal bureaucracy. This was achieved not through direct intervention but largely through the politicians' control of the regulatory system. Conflicts between the two competing management control ideologies were profound and violent. The paper traces how modes of production and management accounting and controls in less developed countries are related, and are transformed in an unpredictable and often unexpected fashion due to cultural, economic, and political factors.