Research Proposal on Environmental Management Issues in China

Paper Type:  Research proposal
Pages:  5
Wordcount:  1304 Words
Date:  2022-04-15

This research paper will discuss on how management uses management accounting systems to make strategic changes as it aims at exploring the extent to which management accounting influences the development of environmental management and the sustainability of China considering the ongoing tensions between environmental degradation and economic growth.

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Since the introduction of the new technologies for the production of goods and services, businesses have become determined to bring about developments in management accounting theories and practices. This has led to the growing interest in the role of management accounting in strategy changing situations. Management accounting is an organizational mechanism which supports strategic changes; it enables managers to use accounting provisions and information to better equip themselves in making strategic decisions within the organizations. Management Accounting systems play a proactive role in shaping organizational change and environmental management. However, there is little research that has been done in this area; this is because empirical studies have not yet addressed how managers use management control systems to support strategic change. Studies on management control systems and relationships have modeled strategies as determinants of the accounting systems rather than modeling them as consequences of a management accounting system.

Management Accounting plays a significant role in supporting environmental conservation and management (Bennett, Schaltegger & Zvezdov, 2011). It is only unfortunate that convention management accounting cannot fully take care of environmental concerns as well as cope with the continuous changes in business structures and environments. However, the involvement of this mechanism of management accounting firms will be able to control the impacts business have on the environment. Organizations will be able to measure, analyze and trace physical environmental flaws and environmental costs (Burritt, Hahn & Schaltegger,2002). Businesses can count for related environmental costs and their benefits when management accounting mechanisms are applied and helps managers in integrating the information for decisive decision making (Johnson,2004. Jasch,2003.). The practice can bear fruit in China due to its industrialized levels, and the rising concerns for environmental degradation. It is important to note that environmental pollution can have a severe effect on economic development.

The Objective of the Study

The objective of this research is to develop a management accounting system that is formalized to address issues within the development of environmental management. The management accounting system herein will identify, classify, resolve and model factors that influence sustainable development for business environments in China. The study will provide an intensive review on different kinds of literature about the role of management accounting, review the current businesses about effects they have on the environment and outline the conceptual framework outlook for environmental management.


Management accounting, environmental management accounting, China, sustainability and ecosystems

Literature Review

Accounting is used to provide crucial information to internal stakeholders and external stakeholders of organizations. It is subdivided into management accounting and financial accounting. Where management accounting is used to serve as an information tool for internal management of a business, whereas financial accounting provides financial statements that can be used in giving information about given businesses ( Atkinson,1998). Financial accounting in most times is used to give the external stakeholders information about the financial performance of a given firm and is regulated by international and local accounting standards. On providing reports for environmental costs, financial accounting is often limited to reports that can only be identified, e.g., fines and pollution control equipment. This is because environmental costs cannot be presented fully in the financial statements and that they result in errors while trying to find improvement options (Schaltegger, Bennett, Burritt & Jasch,2008).

Practices of Management accounting are usually tailor-made to address some management needs and cultures. It is evident that environmental performance can be managed by accounting systems of management. Management accounting systems should be an integral part of any business to be well equipped with the modern environmental processes ( Atkinson,1998) Nevertheless, conventional accounting managing systems give little attention to environmental costs in firms' operations (Scapens,1990. Bromwich,1990). Some constraints give management accounting managers difficulties when collecting and evaluating environmental costs and these include; poor communication between managers, underestimating environmental costs, allocating environmental costs on overhead accounts and misallocations of costs (Chenhall & Langfield-Smith,1998).

No society wants to live in contaminated environments. Every individual should be entitled to a safer environment as well as be responsible for keeping it clean. Most companies tend to prioritize on making profits than playing a corporate social responsibility for the people and communities around them. It is important to note that human health and a cleaner environment is better than big profit margins. Lately, environmental performance for the organization has become social contracts for firms and the society in which they operate (Gale,2006). The increased pollutions, climate changes, and global warming have raised eyebrows and states are now beginning to demand business performance to the environment. The government of China is key on improving environmental sustainability that it has enforced some laws, and if not followed, or if any firm goes against the wishes of the set regulations then its license is evicted and is the firm seizes its operations (Hicks & Dietmar,2007. Zhu, Sarkis & Lai,2007).

Management accountants and managers should use their skills and expertise to help improve the quality of environmental information; the information will be used for making decisions on investment appraisals, strategic management, and capital budgeting to monitor environmental accountability (Chong & Chong,1997).


The study will be conducted in manufacturing companies in China. Data will be collected by interviews in the lead from developed questionnaires. The nature of data will be both quantitative and qualitative to capture every bit of relevant information in management accounting and environmental management. The survey will be aimed at collecting data for company performance on environmental concerns. The data will be both historical and current from the firms' operations. The study will also evaluate on the various determinants to environmental degradation in China, and some of the impacts the regulations put in place have resulted in the lead to environmental management accounting. The method of analysis will be through the use of Advanced Excel and SPSS.


Hicks, C., & Dietmar, R. (2007). Improving cleaner production through the application of environmental management tools in China. Journal of Cleaner Production, 15(5), 395-408.

Zhu, Q., Sarkis, J., & Lai, K. H. (2007). Green supply chain management: pressures, practices and performance within the Chinese automobile industry. Journal of cleaner production, 15(11-12), 1041-1052.

Bennett, M., Schaltegger, S., & Zvezdov, D. (2011). Environmental management accounting. In Review of management accounting research (pp. 53-84). Palgrave Macmillan, London.

Burritt, R. L., Hahn, T., & Schaltegger, S. (2002). Towards a comprehensive framework for environmental management accounting-Links between business actors and environmental management accounting tools. Australian Accounting Review, 12(27), 39-50.

Chong, V. K., & Chong, K. M. (1997). Strategic choices, environmental uncertainty and SBU performance: a note on the intervening role of management accounting systems. Accounting and Business Research, 27(4), 268-276.

Atkinson, A. A. (1998). Advanced management accounting. Pearson College Division.

Scapens, R. W. (1990). Researching management accounting practice: the role of case study methods. The British Accounting Review, 22(3), 259-281.

Bromwich, M. (1990). The case for strategic management accounting: the role of accounting information for strategy in competitive markets. Accounting, Organizations and Society, 15(1-2), 27-46.

Chenhall, R., & Langfield-Smith, K. (1998). Factors influencing the role of management accounting in the development of performance measures within organizational change programs. Management Accounting Research, 9(4), 361-386.

Chapman, C. S. (2005). Controlling strategy: Management, accounting, and performance measurement. Oxford University Press.

Johnson, S. (2004). Environmental management accounting. Association of.

Jasch, C. (2003). The use of Environmental Management Accounting (EMA) for identifying environmental costs. Journal of Cleaner production, 11(6), 667-676.

Gale, R. (2006). Environmental management accounting as a reflexive modernization strategy in cleaner production. Journal of Cleaner production, 14(14), 1228-1236.

Jasch, C. (2003). The use of Environmental Management Accounting (EMA) for identifying environmental costs. Journal of Cleaner production, 11(6), 667-676.

Schaltegger, S., Bennett, M., Burritt, R. L., & Jasch, C. (Eds.). (2008). Environmental management accounting for cleaner production.

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