Financial performance measures of State‐owned enterprise in China have assumed a more diverse role as a result of reform programmes which have introduced greater degrees of operating management autonomy, market responsibility and profit sharing incentives at the enterprise level. This paper reviews the changing role of accounting performance criteria in meeting the needs of operating managers of State enterprise who have an increased decision‐making autonomy, while also maintaining the needs of government bureaus for financial performance criteria related to economic planning and control at the regional and national levels. Using a case study of a State‐owned department store in Guangzhou, an assessment is made of the conceptual and practical difficulties facing China's policy‐makers in setting accounting ratio performance indicators for State commercial enterprises. An alternative set of primary financial performance indicators for such enterprises is constructed by considering approaches adopted in other socialist countries.
Taylor, D. and Liu, K. (1992), "MANAGEMENT AUTONOMY AND FINANCIAL PERFORMANCE CRITERIA: THE CASE OF STATE COMMERCIAL ENTERPRISE IN CHINA", Asian Review of Accounting, Vol. 1 No. 1, pp. 87-98. https://doi.org/10.1108/eb046315
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