Title: Management control systems in multinationals: balancing global standardisation and local customisation

Authors: Andreas Hoffjan, Gonn Weide

Addresses: University of Dortmund, Otto-Hahn-Strasse 6a, 44227 Dortmund, Germany. ' WHU – Otto Beisheim School of Management, Burgplatz 2, 56719 Vallendar, Germany

Abstract: This paper is concerned with the issue of what circumstances affect multinationals in their efforts to standardise their management control systems globally or to customise them by adjusting them to local needs. By analysing the current degree of management control standardisation in multinational enterprises, the paper intends to close this gap in the existing literature. Using contingency theory as a framework, an exploratory cross-sectional field study was conducted, comprising semi-structured interviews with management controllers of large multinationals. The results are diverse. Firstly, increased efforts towards more standardisation have clearly been made in recent years. Secondly, it can be shown that various contextual factors influence the degree of management control standardisation in different ways and with different intensities. These factors include financial accounting standards, cultural differences or internationalisation strategies. Thirdly, management control subsystems are affected with varied intensities. While local control tools and instruments vary substantially between different countries and subsidiaries, the use of strategic financial target figures hardly varies at all between different subsidiaries within one company group.

Keywords: management control systems; MCS; multinational corporations; MNCs; global standardisation; local customisation; financial accounting standards; cultural differences; internationalisation strategies; culture.

DOI: 10.1504/JGBA.2009.023101

Journal for Global Business Advancement, 2009 Vol.2 No.1/2, pp.125 - 141

Published online: 09 Feb 2009 *

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