CHINESE COMPANIES’ CURRENT PLANNING PRACTICE

Robert C. Rickards
Jing Kong
Rolf Ritsert
German Police University
ABSTRACT
Although there are some foundations of internal control management in place in Chinese
enterprises, the accounting concept of “controlling” is fuzzy for most Mainland Chinese
managers. Due to cultural and historical reasons, controlling in China today still is a relatively
weak area both academically and professionally. Curiously, neither investigators inside the
country nor researchers outside it previously have undertaken large-scale, systematic, empirical
study of Chinese companies’ controlling behavior. The dearth of such studies is particularly
surprising given the remarkable growth of business in China during the past thirty years, Chinese
companies’ emphasis on low costs, and the determination of the country’s leadership to see it
move up the value chain during its next phase of economic development – all areas where
controlling should have a major role to play.
This study reports the first responses from a portion of an ongoing, online survey about
current controlling practices in a broad cross-section of Chinese industries. Accordingly, it offers
unique initial insights into such areas as: personnel responsible for controlling and their
qualifications; the kinds of planning practiced and the effort involved; and the coordination
techniques and key performance indicators they use. The study closes with some specific
recommendations based on these responses about how to promote the development of controlling
in Chinese companies.