Perceptions of management control by mainland Chinese, Czech and British managers
This exploratory research inquires into the effect that national culture, among other
cross-national factors has upon perceptions of management control. It studies
differences in control perceptions between mainland Chinese, Czech and British
managers workingfor two Western multi-national companies (MNCs).
Different perceptions can lead to misunderstanding and thence to weak, or break
down in, control. Barriers of national culture and differences in national contexts
pose ever greater challengesfor managers who need to provide or receive assurance
that their business is under effective control. They also have implications for
regulation of internal control of MNCs.
Empirical cross-national research to date into management control is to a large
extent inconsistent, and offers little supportfor theory. Existing theory appears to be
insufficiently grounded in past empirical research to provide a sound foundation for
hypotheses and future nomothetic research. Middle range methodology is put
forward as a way out of this quandary.
Middle range research between objectivist and subjectivist methodologies faces
competing criteria for rigour. Criteria are interpreted for middle range
methodologies and developedfor grounded theory case studies.
The main features of the substantive theory from this grounded theory (Strauss and
Corbin, 1998) case study are that there is no standard perception of management
control. Control perception is therefore unpredictable from a manager's cultural
background Yet, clear patterns in control perceptions emerge between countries of
upbringing; these patterns are distinct from differences between the 2 MNCs. Six
key areas of differences in perception are analysed (external relations, obligations of
responsibility and accountability, internal relations, information, law and
procedures, and systems logic). A number of values and preferences, generally
shared by managers from the same country, appear to underlie these differences in
perception. Differences in control perception are related to national cultures and
other contextualfactors, yet all of these are seen as potentially interdependent.
This substantive theory does not provide a basisfor prediction. It is a skeletal theory
that can be transferred to other situations where researchers and practitioners find it
applicable. It may there give awareness of possible differences in control
perceptions, assist explanation, and contribute to the building of consistent
knowledge and learning. Awareness and understanding of cultural differences in
control perceptions are shown to be useful to ethnocentric or polycentric approaches
to management control. They may also assist reconciliation of cultural differences
for management that adopts a geocentric approach.
Perceptions by the managers from the Czech Republic and mainland China are
generally inconsistent with accountability theory, although not with a systems
approach to management control. The implication is that some management control
theories may be parochial to the cultures in which they have been developed. This
has policy implicationsfor howfar professional guidance and standards on internal
control (COSO, 1994; IIA - UK, 1994; APB, 1995; Turnbull, 1999) can be applied
internationally without recognising the impact of national culture and other crossnational